EXHIBIT 99.1

 

LOGO

Wyndham Worldwide Reports Fourth Quarter and Full Year 2013 Earnings

Full Year Adjusted Diluted EPS Growth of 19%

Increases Dividend 21%

PARSIPPANY, N.J. (February 7, 2014) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months and year ended December 31, 2013.

Highlights:

 

  Fourth quarter adjusted diluted earnings per share (EPS) was $0.73, an increase of 16% from adjusted diluted EPS of $0.63 in the fourth quarter of 2012. Reported diluted EPS was $0.65 in the fourth quarter of 2013, compared with $0.57 during the same period in 2012.

 

  Fourth quarter adjusted EBITDA increased 10% from the prior-year period.

 

  The Company’s Board of Directors authorized an increase in the quarterly cash dividend to $0.35 from $0.29 per share, beginning with the dividend that is expected to be declared in the first quarter of 2014.

 

  During the quarter, the Company repurchased 1.8 million shares of its common stock for $115 million. For the full year, the Company spent $590 million to repurchase 9.7 million shares of its common stock.

“We finished the year with another strong quarter, marking our fourth consecutive year of double-digit growth in adjusted EPS,” said Stephen P. Holmes, chairman and CEO. “We are excited about our prospects for 2014 as we continue to execute and innovate across our businesses and maintain our capital allocation discipline to enhance value for shareholders.”

FOURTH QUARTER 2013 OPERATING RESULTS

Fourth quarter revenues were $1.2 billion, an increase of 9% from the prior year period. The increase reflects growth in all of the Company’s business segments.

Adjusted net income was $96 million, or $0.73 per diluted share, compared with $89 million, or $0.63 per diluted share for the same period in 2012. The increases reflect stronger operating results in the Company’s lodging and vacation ownership businesses. EPS growth also benefited from the Company’s share repurchase program, which decreased weighted average diluted share count by 7% year-over-year.


Reported net income for the fourth quarter of 2013 was $86 million, or $0.65 per diluted share, compared with $81 million, or $0.57 per diluted share, for the fourth quarter of 2012. Reported net income included several items not included in adjusted net income. The net result of these items unfavorably impacted fourth quarter 2013 net income by $10 million and unfavorably impacted fourth quarter 2012 net income by $8 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

FULL YEAR 2013 OPERATING RESULTS

Revenues for full year 2013 were $5.0 billion, an increase of 10% over the prior-year period. Adjusted net income for the full year 2013 was $515 million, or $3.83 per diluted share, compared with $469 million, or $3.23 per diluted share, for the prior year. The increases reflect stronger operating results across all of the Company’s businesses. EPS growth also benefited from the Company’s share repurchase program, which decreased weighted average diluted share count by 7% compared with 2012.

Reported net income for full year 2013 was $432 million, or $3.21 per diluted share, compared with reported net income of $400 million, or $2.75 per diluted share, for the prior-year period. Reported net income included several items not included in adjusted net income. The net result of these items unfavorably impacted full year 2013 net income by $83 million and unfavorably impacted full year 2012 net income by $69 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $770 million for the year ended December 31, 2013, compared with $796 million for the same period in 2012, reflecting higher capital expenditures. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the year ended December 31, 2013, net cash provided by operating activities was $1,008 million, compared with $1,004 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $245 million in the fourth quarter of 2013, a 10% increase over the fourth quarter of 2012. The increase reflects higher RevPAR, a larger system size and increased hotel management reimbursable fees.

Domestic RevPAR increased 4.7% compared with the fourth quarter of 2012. Total system-wide RevPAR increased 3.8%, reflecting proportionally higher growth of lower RevPAR hotels in China.

Adjusted EBITDA for the fourth quarter of 2013 was $64 million, a 3% increase compared with the fourth quarter of 2012. The increase was primarily due to higher RevPAR and a larger system size, partially offset by the unfavorable timing of marketing expenditures. Adjusted EBITDA excludes a $9 million restructuring charge and $8 million of non-cash asset impairment charges.


As of December 31, 2013, the Company’s hotel system consisted of approximately 7,490 properties and over 645,400 rooms, a 2.9% room increase compared with the fourth quarter of 2012. The development pipeline included over 970 hotels and approximately 114,000 rooms, of which 58% were international and 68% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $305 million in the fourth quarter of 2013, a 4% increase over the fourth quarter of 2012. In constant currency and excluding the impact of acquisitions, revenues increased 1%.

Exchange revenues were $150 million, a decline of 2% from the fourth quarter of 2012. In constant currency, exchange revenues were flat, as a 1.6% increase in average number of members was offset by a 1.8% decline in exchange revenue per member.

Vacation rental revenues were $138 million, a 10% increase over the fourth quarter of 2012. In constant currency and excluding acquisitions, vacation rental revenues were up 4%, reflecting a 4.4% increase in the average net price per vacation rental and flat transaction volume.

Adjusted EBITDA for the fourth quarter of 2013 was $36 million, compared with $42 million for the fourth quarter of 2012, primarily reflecting the impact of seasonality from acquisitions and foreign currency movements.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $658 million in the fourth quarter of 2013, a 12% increase over the fourth quarter of 2012, primarily reflecting higher gross VOI sales.

Gross VOI sales were $488 million in the fourth quarter of 2013, an increase of 12% over the fourth quarter of 2012, primarily reflecting a 6.6% increase in tour flow and a 6.5% increase in volume per guest.

Adjusted EBITDA for the fourth quarter of 2013 was $172 million, a 19% increase compared with the fourth quarter of 2012, primarily due to higher gross VOI sales and a lower loan loss provision.


Other Items

 

    The Company repurchased 1.8 million shares of common stock for $115 million during the fourth quarter of 2013. For the full year, the Company repurchased 9.7 million shares of common stock for $590 million. From January 1 through February 6, 2014, the Company repurchased an additional 0.3 million shares for $24 million. The Company’s remaining share repurchase authorization totals $643 million as of February 6, 2014.

 

    Net interest expense in the fourth quarter of 2013 was $32 million, compared with $33 million in the fourth quarter of 2012, as lower rates associated with recent financings offset higher debt levels.

Balance Sheet Information as of December 31, 2013:

 

    Cash and cash equivalents of $194 million, compared with $195 million at December 31, 2012

 

    Vacation ownership contract receivables, net, of $2.8 billion, compared with $2.9 billion at December 31, 2012

 

    Vacation ownership and other inventory of $1.0 billion, compared with $1.1 billion at December 31, 2012

 

    Securitized vacation ownership debt of $1.9 billion, compared with $2.0 billion at December 31, 2012

 

    Long-term debt of $2.9 billion, compared with $2.6 billion at December 31, 2012. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of December 31, 2013, compared with $0.6 billion as of December 31, 2012

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 2014, the Company provides the following guidance:

 

    Revenues of approximately $5.250 - $5.350 billion

 

    Adjusted EBITDA of approximately $1.215 - $1.240 billion

 

    Adjusted EPS of approximately $4.18 - $4.28 based on a diluted share count of 131 million

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company’s results, outlook and guidance on Friday, February 7, 2014 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 on the website for approximately 90 days beginning at noon EST on February 7, 2014. The conference call may also be accessed by dialing 800-369-2125 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 7, 2014, at 866-415-2340.

The Company will post guidance information on its website following the conference call.

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 and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. 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 adjusted 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 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 approximately 7,490 franchised hotels and over 645,400 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 107,000 vacation properties in over 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 over 190 vacation ownership resorts serving approximately 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 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 Annual Report on Form 10-K, filed with the SEC on February 15, 2013. 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, 2013 and 2012:

 

     Three Months Ended December 31,  
     2013     2012  
     Net Revenues     EBITDA     Net Revenues     EBITDA  

Lodging

   $ 245      $ 47      $ 223      $ 62   

Vacation Exchange and Rentals

     305        36        293        28   

Vacation Ownership

     658        172        590        142   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     1,208        255        1,106        232   

Corporate and Other (a)

     (13     (33     (12     (28
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 1,195      $ 222      $ 1,094      $ 204   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

 

  

           Three Months Ended December 31,  
           2013           2012  

EBITDA

     $ 222        $ 204   

Depreciation and amortization

       56          49   

Interest expense

       34          35   

Interest income

       (2       (2
    

 

 

     

 

 

 

Income before income taxes

       134          122   

Provision for income taxes

       48          41   
    

 

 

     

 

 

 

Net income attributable to Wyndham shareholders

     $ 86        $ 81   
    

 

 

     

 

 

 

 

(a)  Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended December 31, 2013 and 2012 (for a description of adjustments by segment, see Table 7):

 

     Three Months Ended December 31,  
     2013     2012  
     Net Revenues     Adjusted
EBITDA
    Net Revenues     Adjusted
EBITDA
 

Lodging

   $ 245      $ 64      $ 223      $ 62   

Vacation Exchange and Rentals

     305        36        293        42   

Vacation Ownership

     658        172        590        144   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     1,208        272        1,106        248   

Corporate and Other

     (13     (33     (12     (30
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 1,195      $ 239      $ 1,094      $ 218   
  

 

 

   

 

 

   

 

 

   

 

 

 


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, 2013 and 2012:

 

     Twelve Months Ended December 31,  
     2013     2012  
     Net Revenues     EBITDA     Net Revenues     EBITDA  

Lodging

   $ 1,027      $ 279      $ 890      $ 272   

Vacation Exchange and Rentals

     1,526        356        1,422        328   

Vacation Ownership

     2,515        619        2,269        549   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     5,068        1,254        4,581        1,149   

Corporate and Other (a)

     (59     (122     (47     (104
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 5,009      $ 1,132      $ 4,534      $ 1,045   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

 

  

           Twelve Months Ended December 31,  
           2013           2012  

EBITDA

     $ 1,132        $ 1,045   

Depreciation and amortization

       216          185   

Interest expense

       131          132   

Early extinguishment of debt

       111          108   

Interest income

       (9       (8
    

 

 

     

 

 

 

Income before income taxes

       683          628   

Provision for income taxes

       250          229   
    

 

 

     

 

 

 

Net income

       433          399   

Net (income)/loss attributable to noncontrolling interest

       (1       1   
    

 

 

     

 

 

 

Net income attributable to Wyndham shareholders

     $ 432        $ 400   
    

 

 

     

 

 

 

 

(a)  Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the twelve months ended December 31, 2013 and 2012 (for a description of adjustments by segment, see Table 7):

 

     Twelve Months Ended December 31,  
     2013     2012  
     Net Revenues     Adjusted
EBITDA
    Net Revenues     Adjusted
EBITDA
 

Lodging

   $ 1,027      $ 296      $ 890      $ 271   

Vacation Exchange and Rentals

     1,526        356        1,422        340   

Vacation Ownership

     2,515        621        2,269        552   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

     5,068        1,273        4,581        1,163   

Corporate and Other

     (59     (121     (47     (109
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Company

   $ 5,009      $ 1,152      $ 4,534      $ 1,054   
  

 

 

   

 

 

   

 

 

   

 

 

 


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,
 
     2013     2012     2013     2012  

Net revenues

        

Service and membership fees

   $ 496      $ 446      $ 2,329      $ 2,005   

Vacation ownership interest sales

     384        337        1,379        1,323   

Franchise fees

     139        134        599        583   

Consumer financing

     108        110        426        421   

Other

     68        67        276        202   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,195        1,094        5,009        4,534   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

        

Operating

     517        454        2,161        1,842   

Cost of vacation ownership interests

     48        46        155        161   

Consumer financing interest

     18        21        78        90   

Marketing and reservation

     180        169        751        723   

General and administrative

     193        185        720        666   

Asset impairments

     8        8        8        8   

Restructuring

     9        7        10        7   

Depreciation and amortization

     56        49        216        185   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     1,029        939        4,099        3,682   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     166        155        910        852   

Other income, net

     —          —          (6     (8

Interest expense

     34        35        131        132   

Early extinguishment of debt

     —          —          111        108   

Interest income

     (2     (2     (9     (8
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     134        122        683        628   

Provision for income taxes

     48        41        250        229   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     86        81        433        399   

Net (income)/loss attributable to noncontrolling interest

     —          —          (1     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

   $ 86      $ 81      $ 432      $ 400   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

        

Basic

   $ 0.66      $ 0.58      $ 3.25      $ 2.80   

Diluted

     0.65        0.57        3.21        2.75   

Weighted average shares outstanding

        

Basic

     129        139        133        143   

Diluted

     131        141        135        145   

 

Note: For a description of adjustments to Net Income, see Table 8.


Table 3

(1 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS

The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:

 

    Year     Q1     Q2     Q3     Q4     Full Year  

Lodging (a)

           

Number of Rooms

    2013        631,800        635,100        638,300        645,400        N/A   
    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   

RevPAR

    2013      $ 31.05      $ 38.00      $ 41.78      $ 33.07      $ 36.00   
    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   

Vacation Exchange and Rentals

           

Average Number of Members (in 000s)

    2013        3,668        3,686        3,711        3,728        3,698   
    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   

Exchange Revenue Per Member

    2013      $ 210.96      $ 182.42      $ 169.95      $ 161.21      $ 181.02   
    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   

Vacation Rental Transactions (in 000s) (a)

    2013        423        355        433        273        1,483   
    2012        418        325        390        259        1,392   
    2011        398        328        370        250        1,347   
    2010        291        297        322        253        1,163   

Average Net Price Per Vacation Rental (a)

    2013      $ 392.64      $ 540.38      $ 677.81      $ 506.62      $ 532.11   
    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   

Vacation Ownership (a)

           

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

    2013      $ 384,000      $ 481,000      $ 536,000      $ 488,000      $ 1,889,000   
    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   

Tours (c)

    2013        163,000        206,000        225,000        195,000        789,000   
    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   

Volume Per Guest (VPG) (c)

    2013      $ 2,211      $ 2,256      $ 2,278      $ 2,370      $ 2,281   
    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   

 

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

(a)  Includes the impact of acquisitions from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
(b) Includes gross VOI sales under the Company's Wyndham Asset Affiliate Model (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).
(c)  Includes the impact of 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

    2013        7,380        7,410        7,440        7,490        N/A   
    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   

Vacation Ownership

           

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

    2013      $ 84,000      $ 90,000      $ 102,000      $ 73,000      $ 349,000   
    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   

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

    2013      $ 36,000      $ 44,000      $ 51,000      $ 29,000      $ 160,000   
    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)

    2013      $ 24,000      $ 30,000      $ 33,000      $ 20,000      $ 107,000   
    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)

    2013      $ 13,000      $ 1,000      $ —        $ —        $ 14,000   
    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 an acquisition 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.
(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 the Company receives a fee for reservation and/or other services provided and (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 the Company's 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 during the period in connection with customers booking their vacation rental stays through the Company. 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 during the period divided by the number of vacation rental transactions during the period.

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.

Tours: Represents the number of tours taken by guests in our efforts to sell VOIs.

Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. The Company has 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 2010-2013.

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)

 

    2013     2012  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  

Lodging

                   

Royalties and Franchise Fees

  $ 64      $ 79      $ 91      $ 75      $ 309      $ 62      $ 80      $ 88      $ 71      $ 301   

Marketing, Reservation and Wyndham Rewards Revenues (a)

    73        92        118        83        365        68        99        98        80        345   

Hotel Management Reimbursable Revenues (b)

    25        38        37        35        135        21        22        25        23        91   

Inter-segment Trademark Fees

    8        10        11        10        39        8        9        9        8        34   

Owned Hotel Revenues

    26        20        18        19        84        8        8        7        18        41   

Ancillary Revenues (c)

    26        23        22        23        95        18        15        22        23        78   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Lodging

    222        262        297        245        1,027        185        233        249        223        890   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Vacation Exchange and Rentals

                   

Exchange Revenues

    193        168        158        150        669        188        162        157        153        660   

Rental Revenues

    166        192        293        138        789        159        170        248        125        702   

Ancillary Revenues (d)

    15        16        19        17        68        14        16        15        15        60   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Vacation Exchange and Rentals

    374        376        470        305        1,526        361        348        420        293        1,422   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Vacation Ownership

                   

Vacation Ownership Interest Sales

    263        347        384        384        1,379        271        342        373        337        1,323   

Consumer Financing

    105        106        107        108        426        103        102        106        110        421   

Property Management Fees

    146        141        143        137        567        110        108        117        125        460   

WAAM 1.0 Commissions

    24        30        33        20        107        12        11        4        6        33   

Ancillary Revenues (e)

    11        6        10        9        36        5        7        8        12        32   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Vacation Ownership

    549        630        677        658        2,515        501        570        608        590        2,269   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

  $ 1,145      $ 1,268      $ 1,444      $ 1,208      $ 5,068      $ 1,047      $ 1,151      $ 1,277      $ 1,106      $ 4,581   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    2011     2010  
    Q1     Q2     Q3     Q4     Year     Q1     Q2     Q3     Q4     Year  

Lodging

                   

Royalties and Franchise Fees

  $ 58      $ 75      $ 85      $ 66      $ 284      $ 52      $ 69      $ 82      $ 62      $ 265   

Marketing, Reservation and Wyndham Rewards Revenues (a)

    54        75        94        76        299        50        65        76        60        251   

Hotel Management Reimbursable Revenues (b)

    19        19        21        20        79        21        20        18        18        77   

Inter-segment Trademark Fees (f)

    1        2        3        4        10        —          —          —          —          —     

Owned Hotel Revenues

    —          —          —          5        5        —          —          —          —          —     

Ancillary Revenues (c)

    17        19        19        17        72        21        24        27        23        95   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Lodging

    149        190        222        188        749        144        178        203        163        688   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Vacation Exchange and Rentals

                   

Exchange Revenues

    194        168        161        150        673        189        161        163        153        666   

Rental Revenues

    150        180        260        125        715        105        115        161        114        495   

Ancillary Revenues (d)

    12        13        15        16        56        6        5        6        15        32   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Vacation Exchange and Rentals

    356        361        436        291        1,444        300        281        330        282        1,193   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Vacation Ownership

                   

Vacation Ownership Interest Sales

    222        313        320        295        1,150        217        271        308        276        1,072   

Consumer Financing

    102        103        105        105        415        105        106        107        107        425   

Property Management Fees

    110        108        105        101        424        100        100        104        101        405   

WAAM 1.0 Commissions

    10        11        23        21        65        3        8        12        8        31   

Ancillary Revenues (e)

    6        6        6        5        23        19        20        2        5        46   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Vacation Ownership

    450        541        559        527        2,077        444        505        533        497        1,979   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Reportable Segments

  $ 955      $ 1,092      $ 1,217      $ 1,006      $ 4,270      $ 888      $ 964      $ 1,066      $ 942      $ 3,860   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

(a)  Marketing and reservation revenues represent fees the Company receives 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 the Company receives relating to its loyalty program.
(b)  Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During Q2, Q3 and Q4 2013, $1 million, $3 million and $2 million, respectively, of reimbursable revenues, which eliminate in consolidation, were charged to the Company's vacation ownership business.
(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.
(f)  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.


Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

 

     December 31,
2013
     September 30,
2013
     June 30,
2013
     March 31,
2013
     December 31,
2012
 

Securitized vacation ownership debt (a)

              

Term notes

   $ 1,648       $ 1,615       $ 1,569       $ 1,869       $ 1,770   

Bank conduit facility (b)

     262         273         289         125         190   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total securitized vacation ownership debt (c)

     1,910         1,888         1,858         1,994         1,960   

Less: Current portion of securitized vacation ownership debt

     184         186         217         228         218   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Long-term securitized vacation ownership debt

   $ 1,726       $ 1,702       $ 1,641       $ 1,766       $ 1,742   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Debt:

              

Revolving credit facility (due July 2018) (d)

   $ 23       $ 74       $ 41       $ 34       $ 85   

Commercial paper (e)

     210         164         168         202         273   

9.875% senior unsecured notes (f)

     —           —           —           —           42   

6.00% senior unsecured notes (due December 2016)

     318         318         319         319         361   

2.95% senior unsecured notes (due March 2017)

     298         298         298         298         298   

5.75% senior unsecured notes (due February 2018)

     14         14         14         14         248   

2.50% senior unsecured notes (due March 2018)

     447         447         447         447         —     

7.375% senior unsecured notes (due March 2020)

     40         40         40         40         248   

5.625% senior unsecured notes (due March 2021)

     246         246         246         246         246   

4.25% senior unsecured notes (due March 2022) (g)

     643         644         644         644         644   

3.90% senior unsecured notes (due March 2023) (h)

     387         396         397         397         —     

Capital leases

     191         185         184         187         105   

Other

     114         117         133         133         52   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total long-term debt

     2,931         2,943         2,931         2,961         2,602   

Less: Current portion of long-term debt

     49         55         52         254         326   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Long-term debt

   $ 2,882       $ 2,888       $ 2,879       $ 2,707       $ 2,276   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a)  The Company’s vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities (“SPEs”) 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 2015 and borrowing capacity of $650 million. As of December 31, 2013, this facility had a remaining borrowing capacity of $388 million.
(c)  This debt is collateralized by $2,314 million, $2,306 million, $2,414 million, $2,512 million and $2,543 million of underlying vacation ownership contract receivables and related assets as of December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively.
(d)  Represents a $1.5 billion revolving credit facility that expires on July 15, 2018. As of December 31, 2013, the Company had $9 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $210 million, the remaining borrowing capacity was $1.3 billion as of December 31, 2013.
(e)  Represents a $750 million commercial paper program which the Company commenced in October 2012 and a $500 million European commercial paper program which the Company commenced in December 2013. As of December 31, 2013, the programs had a remaining borrowing capacity of $1.0 billion.
(f)  Represents senior unsecured notes issued by the Company during May 2009 and repaid by the Company during March 2013.
(g)  The balance as of December 31, 2013 includes a $2 million adjustment to the carrying value resulting from the fair value hedge derivative.
(h)  The balance as of December 31, 2013 includes a $10 million adjustment to the carrying value resulting from the fair value hedge derivative.


Table 6

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

 

     As of and For the Three Months Ended December 31, 2013

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

       170          37,569          54.5 %     $ 120.69        $ 65.76  

TRYP by Wyndham

       113          16,216          57.4 %     $ 97.16        $ 55.74  

Wingate by Wyndham

       159          14,559          56.0 %     $ 83.38        $ 46.66  

Hawthorn Suites by Wyndham

       91          8,933          59.2 %     $ 69.39        $ 41.10  

Ramada

       834          115,394          50.9 %     $ 80.82        $ 41.13  

Baymont

       329          27,108          46.0 %     $ 62.11        $ 28.60  

Days Inn

       1,817          146,959          44.3 %     $ 62.20        $ 27.54  

Super 8

       2,391          152,648          52.2 %     $ 49.36        $ 25.77  

Howard Johnson

       449          46,777          45.8 %     $ 59.86        $ 27.39  

Travelodge

       432          32,012          44.2 %     $ 63.13        $ 27.91  

Microtel Inns & Suites by Wyndham

       312          22,304          53.7 %     $ 63.53        $ 34.11  

Knights Inn

       380          23,325          40.0 %     $ 43.43        $ 17.37  

Dream

       5          989          74.6 %     $ 249.45        $ 186.05  

Night

       3          630          63.3 %     $ 172.81        $ 109.40  
    

 

 

      

 

 

               

Total Lodging

       7,485          645,423          49.1 %     $ 67.36        $ 33.07  

Vacation Ownership

                       

Wyndham Vacation Ownership resorts

       191          23,506          N/A         N/A          N/A  
    

 

 

      

 

 

               

Total Wyndham Worldwide

       7,676          668,929                
    

 

 

      

 

 

               
     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                
    

 

 

      

 

 

               

 

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, 2013

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

       170          37,569          58.6 %     $ 117.27        $ 68.74  

TRYP by Wyndham

       113          16,216          60.5 %     $ 96.09        $ 58.16  

Wingate by Wyndham

       159          14,559          60.9 %     $ 85.11        $ 51.82  

Hawthorn Suites by Wyndham

       91          8,933          62.6 %     $ 71.46        $ 44.71  

Ramada

       834          115,394          53.0 %     $ 80.19        $ 42.50  

Baymont

       329          27,108          51.3 %     $ 63.14        $ 32.40  

Days Inn

       1,817          146,959          48.8 %     $ 64.34        $ 31.42  

Super 8

       2,391          152,648          56.3 %     $ 52.33        $ 29.45  

Howard Johnson

       449          46,777          47.7 %     $ 62.06        $ 29.58  

Travelodge

       432          32,012          49.5 %     $ 67.10        $ 33.23  

Microtel Inns & Suites by Wyndham

       312          22,304          57.6 %     $ 64.42        $ 37.10  

Knights Inn

       380          23,325          42.0 %     $ 45.04        $ 18.92  

Dream

       5          989          71.8 %     $ 229.77        $ 164.88  

Night

       3          630          62.4 %     $ 152.65        $ 95.18  
    

 

 

      

 

 

               

Total Lodging

       7,485          645,423          52.7 %     $ 68.27        $ 36.00  

Vacation Ownership

                       

Wyndham Vacation Ownership resorts

       191          23,506          N/A         N/A          N/A  
    

 

 

      

 

 

               

Total Wyndham Worldwide

       7,676          668,929                
    

 

 

      

 

 

               
     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                
    

 

 

      

 

 

               

 

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)

 

Three months ended March 31, 2013    Net
Revenues
    Reported
EBITDA
    Legacy
Adjustments (b)
    Acquisition
Costs (c)
     Restructuring
Costs (d)
     Asset
Impairment (e)
     Adjusted
EBITDA
 

Lodging

   $ 222      $ 58      $ —        $ —         $ —         $ —         $ 58   

Vacation Exchange and Rentals

     374        94        —          —           —           —           94   

Vacation Ownership

     549        111        —          2         —           —           113   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Reportable Segments

     1,145        263        —          2         —           —           265   

Corporate and Other (a)

     (12     (29     —          —           —           —           (29
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Company

   $ 1,133      $ 234      $ —        $ 2       $ —         $ —         $ 236   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
Three months ended June 30, 2013                                              

Lodging

   $ 262      $ 78      $ —        $ —         $ —         $ —         $ 78   

Vacation Exchange and Rentals

     376        85        —          —           —           —           85   

Vacation Ownership

     630        161        —          —           —           —           161   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Reportable Segments

     1,268        324        —          —           —           —           324   

Corporate and Other (a)

     (15     (27     —          —           —           —           (27
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Company

   $ 1,253      $ 297      $ —        $ —         $ —         $ —         $ 297   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
Three months ended September 30, 2013                                              

Lodging

   $ 297      $ 95      $ —        $ —         $ —         $ —         $ 95   

Vacation Exchange and Rentals

     470        141        —          —           —           —           141   

Vacation Ownership

     677        176        —          —           —           —           176   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Reportable Segments

     1,444        412        —          —           —           —           412   

Corporate and Other (a)

     (17     (33     (1     —           —           —           (34
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Company

   $ 1,427      $ 379      $ (1   $ —         $ —         $ —         $ 378   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
Three months ended December 31, 2013                                              

Lodging

   $ 245      $ 47      $ —        $ —         $ 9       $ 8       $ 64   

Vacation Exchange and Rentals

     305        36        —          —           —           —           36   

Vacation Ownership

     658        172        —          —           —           —           172   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Reportable Segments

     1,208        255        —          —           9         8         272   

Corporate and Other (a)

     (13     (33     —          —           —           —           (33
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Company

   $ 1,195      $ 222      $ —        $ —         $ 9       $ 8       $ 239   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
Twelve months ended December 31, 2013                                              

Lodging

   $ 1,027      $ 279      $ —        $ —         $ 9       $ 8       $ 296   

Vacation Exchange and Rentals

     1,526        356        —          —           —           —           356   

Vacation Ownership

     2,515        619        —          2         —           —           621   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Reportable Segments

     5,068        1,254        —          2         9         8         1,273   

Corporate and Other (a)

     (59     (122     1        —           —           —           (121
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Company

   $ 5,009      $ 1,132      $ 1      $ 2       $ 9       $ 8       $ 1,152   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

Note: The sum of the quarters may not agree to the twelve months ended December 31, 2013 due to rounding.

(a)  Includes the elimination of transactions between segments.
(b)  Relates to a net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.
(c) Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013).
(d)  Relates to costs incurred as a result of an organizational realignment initiative.
(e) Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark.


Table 7

(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

 

Three months ended March 31, 2012   Net
Revenues
    Reported
EBITDA
    Legacy
Adjustments (b)
    Impairment
Recovery (c)
    Allowance
Reversal (d)
    Acquisition
Costs (e)
    Asset
Impairment (f)
    Restructuring
Costs (g)
    Adjusted
EBITDA
 

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 the Company's 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 acquisition of Shell Vacations Club at the Company's vacation ownership business (September 2012) and several other acquisitions at the Company's vacation rental businesses (December 2012).
(f) Relates to a non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames at the Company's vacation exchange and rentals business.
(g)  Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 at the Company's vacation exchange and rentals business and restructuring associated with the Shell acquisition.


Table 8

(1 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

     Three Months Ended December 31, 2013  
     As Reported     Restructuring
Costs (a)
    Asset
Impairment (b)
    As Adjusted
non-GAAP
 

Net revenues

        

Service and membership fees

   $ 496          $ 496   

Vacation ownership interest sales

     384            384   

Franchise fees

     139            139   

Consumer financing

     108            108   

Other

     68            68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,195        —          —          1,195   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

        

Operating

     517            517   

Cost of vacation ownership interests

     48            48   

Consumer financing interest

     18            18   

Marketing and reservation

     180            180   

General and administrative

     193            193   

Asset impairments

     8          (8     —     

Restructuring

     9        (9       —     

Depreciation and amortization

     56            56   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     1,029        (9     (8     1,012   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     166        9        8        183   

Interest expense

     34            34   

Interest income

     (2         (2
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     134        9        8        151   

Provision for income taxes

     48        4 (c)      3 (c)      55   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

   $ 86      $ 5      $ 5      $ 96   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

        

Basic

   $ 0.66      $ 0.04      $ 0.04      $ 0.74   

Diluted

     0.65        0.04        0.04        0.73   

Weighted average shares outstanding

        

Basic

     129        129        129        129   

Diluted

     131        131        131        131   

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

(a)  Relates to costs incurred as a result of an organizational realignment initiative at the Company's lodging business.
(b)  Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark at the Company's lodging business.
(c)  Relates to the tax effect of the adjustment.


Table 8

(2 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

     Twelve Months Ended December 31, 2013  
     As
Reported
    Legacy
Adjustments
    Acquisition
Costs (c)
    Early
Extinguishment
of Debt (d)
    Restructuring
Costs (e)
    Asset
Impairment (f)
    As
Adjusted
non-GAAP
 

Net revenues

              

Service and membership fees

   $ 2,329                $ 2,329   

Vacation ownership interest sales

     1,379                  1,379   

Franchise fees

     599                  599   

Consumer financing

     426                  426   

Other

     276                  276   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     5,009        —          —          —          —          —          5,009   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

              

Operating

     2,161          (2           2,159   

Cost of vacation ownership interests

     155                  155   

Consumer financing interest

     78                  78   

Marketing and reservation

     751                  751   

General and administrative

     720        (1 )(a)              719   

Asset impairments

     8                (8     —     

Restructuring

     10              (9       1   

Depreciation and amortization

     216                  216   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     4,099        (1     (2     —          (9     (8     4,079   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     910        1        2        —          9        8        930   

Other income, net

     (6               (6

Interest expense

     131                  131   

Early extinguishment of debt

     111            (111         —     

Interest income

     (9               (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     683        1        2        111        9        8        814   

Provision for income taxes

     250        (2 )(b)      1 (g)      42 (g)      4 (g)      3 (g)      298   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     433        3        1        69        5        5        516   

Net income attributable to noncontrolling interest

     (1     —          —          —          —          —          (1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Wyndham shareholders

   $ 432      $ 3      $ 1      $ 69      $ 5      $ 5      $ 515   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

              

Basic

   $ 3.25      $ 0.02      $ 0.01      $ 0.51      $ 0.04      $ 0.04      $ 3.87   

Diluted

     3.21        0.02        0.01        0.51        0.04        0.04        3.83   

Weighted average shares outstanding

              

Basic

     133        133        133        133        133        133        133   

Diluted

     135        135        135        135        135        135        135   

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

 

(a) Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.
(b)  Relates to a state tax accrual for legacy tax matters.
(c)  Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013) at the Company's vacation ownership business.
(d)  Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior unsecured notes and the remaining portion of the 9.875% senior unsecured notes.
(e) Relates to costs incurred as a result of an organizational realignment initiative at the Company's lodging business.
(f) Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark at the Company's lodging business.
(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, 2012  
     As Reported     Legacy
Adjustments (a)
    Acquisition
Costs (b)
    Asset
Impairment (c)
    Restructuring
Costs (d)
    As Adjusted
non-GAAP
 

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         453   

Cost of vacation ownership interests

     46                46   

Consumer financing interest

     21                21   

Marketing and reservation

     169                169   

General and administrative

     185        2              187   

Asset impairments

     8            (8       —     

Restructuring

     7              (7     —     

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        —          —          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   

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

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 the Company's separation from Cendant.
(b)  Relates to the costs incurred in connection with the acquisitions of several vacation rental businesses (December 2012).
(c)  Relates to the non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames at the Company's vacation exchange and rental business.
(d)  Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 at the Company's vacation exchange and rentals business and restructuring associated with the Shell acquisition.
(e)  Relates to the tax effect of the adjustment.


Table 8

(4 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

     Twelve Months Ended December 31, 2012  
     As Reported     Legacy
Adjustments (a)
    Reversal /
Recovery (b)
    Acquisition
Costs (c)
    Early
Extinguishment
of Debt (d)
    Asset
Impairment (e)
    Restructuring
Costs (f)
    As Adjusted
non-GAAP
 

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           1,840   

Cost of vacation ownership interests

     161                    161   

Consumer financing interest

     90                    90   

Marketing and reservation

     723                    723   

General and administrative

     666        5                  671   

Asset impairments

     8                (8       —     

Restructuring

     7                  (7     —     

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                (5

Interest expense

     132                    132   

Early extinguishment of debt

     108              (108         —     

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   

 

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

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 the Company's separation from Cendant.
(b)  Includes $2 million related to the 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 acquisition of Shell Vacations Club at the Company's vacation ownership business (September 2012) and several other acquisitions at the Company's vacation rental businesses (December 2012).
(d)  Represents costs incurred for the early repurchase of a portion of the Company's 9.875% and 6.00% senior unsecured notes.
(e)  Relates to the non-cash impairment charge for the write-down of the ResortQuest and Steamboat Resorts tradenames at the Company's vacation exchange and rentals business.
(f) Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 at the Company's vacation exchange and rentals business and restructuring associated with the Shell acquisition.
(g)  Relates to the tax effect of the adjustment.


Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)

FREE CASH FLOW

The Company defines free cash flow to be net cash provided by operating activities less property and equipment additions which it also refers to as capital expenditures. Prior to the fourth quarter 2012, the Company had previously included development advances within its calculation of free cash flow.

We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.

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,              
     2013           2012              

Net cash provided by operating activities

   $ 1,008        $ 1,004       

Less: Property and equipment additions

     (238       (208    
  

 

 

     

 

 

     

Free cash flow

   $ 770        $ 796       
  

 

 

     

 

 

     

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

                              

2013

   Q1     Q2     Q3     Q4     Full Year  

Gross VOI sales (a)

   $ 384      $     481      $ 536      $     488      $ 1,889   

Less: Sales under WAAM 1.0

     (36     (44     (51     (29     (160
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross VOI sales, net of WAAM 1.0 sales

     347        437        486        459        1,729   

Less: Loan loss provision

     (84     (90     (102     (73     (349

Less: Impact of percentage-of-completion accounting

     —          —          —          (1     (1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Vacation ownership interest sales (a)

   $ 263      $ 347      $ 384      $ 384      $ 1,379   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

2012

                              

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   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Note: Amounts may not add due to rounding.

 

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

 

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  

2013

   $ 24      $ 18      $ 22      $ 25      $ 89   

2012

   $ 27      $ 20      $ 22      $ 28      $ 97   

2011

   $ 18      $ 18      $ 21      $ 11      $ 68   

2010

   $ 20      $ 20      $ 23      $ 17      $ 80