Wyndham Worldwide Reports First Quarter 2012 Earnings First Quarter Adjusted EPS Growth of 36%

Increases 2012 EPS Guidance

Share Repurchase Authorization Increased

PARSIPPANY, N.J., April 25, 2012 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2012. 

Highlights:

  • First quarter adjusted diluted earnings per share (EPS) was $0.60, compared with $0.44 in the first quarter of 2011, an increase of 36%.  First quarter 2012 reported diluted EPS was $0.21, a decrease of 49% from the same period in 2011, reflecting early extinguishment charges related to $650 million of debt tender offers.
  • First quarter Adjusted EBITDA increased 8% to $220 million.
  • Free cash flow increased to $193 million for the quarter ended March 31, 2012, compared with $185 million from the same period in 2011.
  • During the quarter, the Company repurchased 3.6 million shares of its common stock for $150 million at an average price of $42.05.
  • The Company announced today that its Board of Directors approved a $750 million increase to the share repurchase authorization.

"First quarter results were strong, reflecting the power of our fee-for-service business model across economic cycles, continuing innovation throughout the Company, robust free cash flow and disciplined capital allocation," said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide.  "Furthermore, consumers are traveling.  Our Vacation Ownership and Hotel businesses are showing great momentum and our Exchange and Rentals business proved resilient despite the difficult economic climate in Europe.  As always, we will continue to focus on driving operational improvements in 2012 and beyond."

FIRST QUARTER 2012 OPERATING RESULTS
First quarter revenues were $1.0 billion, an increase of 9% from the prior year period. The increase reflects growth in all of our business units led by the Company's Lodging and Vacation Ownership businesses.

For the first quarter of 2012, adjusted net income was $90 million, or $0.60 per diluted share, compared with $79 million, or $0.44 per diluted share for the same period in 2011.  The increase in adjusted net income primarily reflects stronger operating results in our Lodging and Vacation Ownership businesses.  Adjusted net income for the first quarter of 2012 excludes a $62 million early extinguishment charge related to $650 million of debt tender offers and $4 million of benefits related to legacy and other adjustments.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Including the early extinguishment charge and legacy benefits, reported net income for the first quarter of 2012 was $32 million, or $0.21 per diluted share, compared with net income of $72 million, or $0.41 per diluted share, for the first quarter of 2011.

Free cash flow increased 4% to $193 million for the quarter ended March 31, 2012, compared with $185 million during the same period in 2011. The growth in free cash flow primarily reflects reduced capital expenditures.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances.  For the quarter ended March 31, 2012, cash provided by operating activities was $228 million, compared with $229 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)
Revenues were $185 million in the first quarter of 2012, an increase of 24%, compared with the first quarter of 2011.  The increase reflects domestic RevPAR gains of 9%, as part of a total system RevPAR improvement of 7%, revenues associated with the recently opened Wyndham Grand hotel in Orlando, and higher inter-segment licensing fees for use of the Wyndham brand trade name.  The revenue increase also includes $10 million of reclassifications, primarily related to certain reservation fees, which had no impact on Adjusted EBITDA.

Adjusted EBITDA was $49 million, an increase of 23% compared with the first quarter of 2011, largely reflecting the revenue increases discussed above, partially offset by the operating costs associated with the recently opened Wyndham Grand hotel and higher marketing costs.  Excluding the higher inter-segment licensing fees, Adjusted EBITDA increased by 13%.

As of March 31, 2012, the Company's hotel system consisted of over 7,150 properties and approximately 609,300 rooms. The development pipeline included approximately 840 hotels and 108,200 rooms, of which 56% were new construction and 55% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $361 million in the first quarter of 2012, compared to $356 million in the first quarter of 2011.  In constant currency and excluding the impact of acquisitions, revenues were flat.

Exchange revenues were $188 million, a decrease of 3% compared with the first quarter of 2011, primarily due to a 2% decline in the average number of members resulting from the non-renewal of an affiliation agreement.  In constant currency, exchange revenues were down 2% and exchange revenue per member was flat.

Vacation rental revenues were $159 million, a 6% increase compared with the first quarter of 2011. Excluding the impact of foreign currency and acquisitions, vacation rental revenues were up 3% primarily due to a 2% increase in vacation rental transactions.  Average net price per vacation rental remained flat.

Adjusted EBITDA for the first quarter of 2012 was $93 million, flat compared with the prior-year period.  Excluding the impact of foreign currency and acquisitions, Adjusted EBITDA declined by 2%, reflecting the continued economic challenges in Europe.

Vacation Ownership (Wyndham Vacation Ownership)
Revenues were $501 million in the first quarter of 2012, an 11% increase over the first quarter of 2011, primarily reflecting increased vacation ownership interest (VOI) sales. 

Gross VOI sales were $384 million in the first quarter of 2012, up 20% from the first quarter of 2011, primarily reflecting a 10% increase in volume per guest and an 8% increase in tour flow.

Adjusted EBITDA for the first quarter of 2012 was $103 million, a 7% increase compared with the first quarter of 2011.  Excluding the higher inter-segment licensing fee paid for the use of the Wyndham brand trade name, Adjusted EBITDA increased by 11%, reflecting contributions from increased VOI sales.

Other Items

  • The Board of Directors approved a $750 million increase in the Company's share repurchase program.
  • The Company repurchased approximately 3.6 million shares of common stock for $150 million during the first quarter of 2012 at an average price of $42.05, and an additional 850,000 shares for $40 million at an average price of $46.85 through April 24, 2012.  The Company has $940 million remaining on its current share repurchase authorization, including the $750 million increase mentioned above.
  • Net interest expense in the first quarter of 2012 was $31 million, compared to $30 million in the first quarter of 2011.
  • During the quarter, the Company purchased $207 million of our 9.875% 2014 senior notes and $443 million of our 6.0% 2016 senior notes.  We also issued $300 million of 5 year notes at 2.95% and $650 million of 10 year notes at 4.25%.  A portion of the proceeds was used to reduce revolver borrowings by approximately $170 million.   

Balance Sheet Information as of March 31, 2012:

  • Cash and cash equivalents of approximately $240 million, compared with $142 million at December 31, 2011
  • Vacation ownership contract receivables, net, of $2.8 billion, unchanged from December 31, 2011
  • Vacation ownership and other inventory of approximately $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 $2.3 billion, compared with $2.2 billion at December 31, 2011. The remaining borrowing capacity on the revolving credit facility was $942 million, compared with $771 million as of December 31, 2011

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

Outlook

For the full year 2012, the Company:

  • Reiterates Revenues of approximately $4.425$4.6 billion
  • Reiterates Adjusted EBITDA of approximately $1.030$1.055 billion
  • Raises Adjusted EPS Guidance to $3.00 - $3.15 from $2.85 - $3.00
  • Reduces diluted shares to 149 million from 153 million

The guidance reflects assumptions used for internal planning purposes. Guidance may exclude non-recurring or special items, which may have a positive or negative impact on reported results. If economic conditions change materially from current levels, these assumptions and our guidance may change materially.

Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, April 25, 2012 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EDT on April 25, 2012. The conference call may also be accessed by dialing (800) 369-2052 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on April 25, 2012, at (800) 839-5569.

Presentation of Financial Information
Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release.  It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and EPS to the most directly comparable GAAP measure because certain items cannot be reasonably estimated or predicted at this time.  Any such items could be significant to our reported results.

About Wyndham Worldwide Corporation
As one of the world's largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses over 7,150 hotels with approximately 609,300 rooms worldwide. Wyndham Exchange & Rentals offers leisure travelers, including its 3.7 million members, access to approximately 100,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of over 160 vacation ownership resorts serving over 813,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs approximately 27,800 employees globally.

For more information about Wyndham Worldwide, 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, share repurchases 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 17, 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.

 










Table 1











Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)






















In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA," which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company's Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for the Company's industry segments which, when considered with GAAP measures, the Company believes gives a more complete understanding of its operating performance. The Company's presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.


The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income attributable to Wyndham Worldwide for the three months ended March 31, 2012 and 2011:



Three Months Ended March 31,



2012


2011



 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$            185


$          49


$         149


$          27

 (e) 

Vacation Exchange and Rentals

361


95

 (c)

356


93


Vacation Ownership

501


103


450


97

 (f) 

     Total Reportable Segments

1,047


247


955


217


Corporate and Other (a) (b)

(11)


(21)


(3)


(14)


     Total Company

$        1,036


$         226


$         952


$        203











Reconciliation of EBITDA to Net Income attributable to Wyndham Worldwide


















EBITDA



$         226




$       203


Depreciation and amortization



45




45


Interest expense



33




32


Early extinguishment of debt



106

 (d) 



12

 (g) 

Interest income



(2)




(2)


Income before income taxes



44




116


Provision for income taxes



13




44


Net income



31




72


Net loss attributable to noncontrolling interest



1




-


Net income attributable to Wyndham Worldwide



$         32




$       72











__________









(a)  Includes the elimination of transactions between segments.  

(b)  Includes $4 million and $11 million of a net benefit during the three months ended March 31, 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(c)  Includes a $2 million benefit related to the reversal of an allowance associated with a previously divested asset.

(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)  Includes a non-cash impairment charge of $13 million to reduce the value of an international joint venture.

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

(g)  Represents costs incurred for the early repurchase of a portion of the Company's convertible notes. 



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













Three Months Ended March 31,




2012


2011






Adjusted




Adjusted




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$                     185


$                     49


$                     149


$                     40


Vacation Exchange and Rentals

361


93


356


93


Vacation Ownership

501


103


450


96


     Total Reportable Segments

1,047


245


955


229


Corporate and Other

(11)


(25)


(3)


(25)


     Total Company

$                  1,036


$                   220


$                     952


$                   204






















 

 

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)


















 Three Months Ended 





 March 31, 





2012


2011


Net revenues







Service and membership fees


$          504


$          495



Vacation ownership interest sales


271


222



Franchise fees


118


101



Consumer financing


103


102



Other


40


32


Net revenues


1,036


952









Expenses







Operating


442


411



Cost of vacation ownership interests 


28


32



Consumer financing interest


23


23



Marketing and reservation


167


137



General and administrative(a)


153


140



Asset impairments


-


13

(b)


Restructuring


-


(1)

(c)


Depreciation and amortization


45


45


Total expenses


858


800









Operating income


178


152


Other income, net


(3)

(d)

(6)

(e)

Interest expense


33


32


Early extinguishment of debt


106

(f)

12

(g)

Interest income


(2)


(2)









Income before income taxes


44


116


Provision for income taxes


13


44









Net income


31


72


Net loss attributable to noncontrolling interest


1


-









Net income attributable to Wyndham Worldwide


$            32


$            72









Earnings per share







Basic


$         0.22


$         0.42



Diluted


0.21


0.41









Weighted average shares outstanding







Basic


146


173



Diluted


149


179


__________






(a)  Includes $4 million and $7 million of a net benefit during the three months ended March 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)  Represents a non-cash impairment charge related to a write-down of an international joint venture at the Company's lodging business.

(c)  Relates to the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

(d)  Includes a $2 million benefit related to the reversal of an allowance associated with a previously divested asset at the Company's vacation exchange and rentals business.

(e)  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.

(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)  Represents costs incurred for the early repurchase of a portion of the Company's convertible notes. 








 

 











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

 N/A 

 N/A 

 N/A 

 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

 N/A 

 N/A 

 N/A 

 N/A 






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

 N/A 

 N/A 

 N/A 

 N/A 






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

 N/A 

 N/A 

 N/A 

 N/A 






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

 N/A 

 N/A 

 N/A 

 N/A 






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

 N/A 

 N/A 

 N/A 

 N/A 






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








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

2012

$  384,000

 N/A 

 N/A 

 N/A 

 N/A 






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 (d)

2012

148,000

 N/A 

 N/A 

 N/A 

 N/A 






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) (d)

2012

$       2,414

 N/A 

 N/A 

 N/A 

 N/A 






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) and two tuck-in acquisitions (third quarter 2011) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

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

(d)  Includes the impact of WAAM related tours beginning in the first quarter of 2010.






















Table 3











(2 of 3)












Wyndham Worldwide Corporation

ADDITIONAL DATA




























Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Properties

2012

7,150

 N/A 

 N/A 

 N/A 

 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

 N/A 

 N/A 

 N/A 

 N/A 






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 (in 000s) (c) 

2012

$       17,000

 N/A 

 N/A 

 N/A 

 N/A 






2011

$       18,000

$      19,000

$       38,000

$        31,000

$           106,000






2010

$         5,000

$      13,000

$       20,000

$        14,000

$             51,000













WAAM Commission Revenues (in 000s)

2012

$      12,000

 N/A 

 N/A 

 N/A 

 N/A 






2011

$      10,000

$     11,000

$       23,000

$       21,000

$             65,000






2010

$        3,000

$       8,000

$       12,000

$         9,000

$             31,000












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




(a)  Includes the impact of the 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 for which the Company earns commission revenue (WAAM Commission Revenues). The commission revenue earned on these sales is included in service fees and membership revenues on the Consolidated Statements of Income. The Company implemented this sales model during the first quarter of 2010 and, as such, there is no historical data prior to 2010.











































Table 3











(3 of 3)












Wyndham Worldwide Corporation

OPERATING STATISTICS


GLOSSARY OF TERMS












Lodging





















Number of Rooms:  Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, 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 pay annual membership dues. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with our vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related services and products.



Exchange Revenue Per Member:  Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.  












Vacation Rental Transactions:  Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. One rental transaction is recorded for each standard one-week rental.












Average Net Price Per Vacation Rental:  Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees divided by the number of vacation rental transactions.












Vacation Ownership




















Gross Vacation Ownership Interest Sales:  Represents sales of vacation ownership interest (VOIs), including Wyndham Asset Affiliation Model sales, before the net effect of percentage-of-completion accounting and loan loss provisions.  See Table 9 for a reconciliation of Gross VOI sales to Vacation Ownership Interest Sales.  We believe that Gross VOI sales provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the sales volume of this business during a given reporting period. 



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












Volume per Guest (VPG):  Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 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

 N/A 

 N/A 

 N/A 

 N/A 


$   58

$    75

$     85

$     66

$   284


Marketing, Reservation and Wyndham Rewards Revenues (a)

68

 N/A 

 N/A 

 N/A 

 N/A 


54

75

94

76

299


Hotel Management Reimbursable Revenues (b)

21

 N/A 

 N/A 

 N/A 

 N/A 


19

19

21

20

79


Inter-segment Trademark Fees (c)


8

 N/A 

 N/A 

 N/A 

 N/A 


1

2

3

4

10


Owned Hotel Revenues


8

 N/A 

 N/A 

 N/A 

 N/A 


-

-

-

5

5


Ancillary Revenues (d)


18

 N/A 

 N/A 

 N/A 

 N/A 


17

19

19

17

72


Total Lodging


185

 N/A 

 N/A 

 N/A 

 N/A 


149

190

222

188

749















Vacation Exchange and Rentals














Exchange Revenues


188

 N/A 

 N/A 

 N/A 

 N/A 


194

168

161

150

673


Rental Revenues


159

 N/A 

 N/A 

 N/A 

 N/A 


150

180

260

125

715


Ancillary Revenues (e)


14

 N/A 

 N/A 

 N/A 

 N/A 


12

13

15

16

56


Total Vacation Exchange and Rentals

361

 N/A 

 N/A 

 N/A 

 N/A 


356

361

436

291

1,444















Vacation Ownership














Vacation Ownership Interest Sales

271

 N/A 

 N/A 

 N/A 

 N/A 


222

313

320

295

1,150


Consumer Financing


103

 N/A 

 N/A 

 N/A 

 N/A 


102

103

105

105

415


Property Management Fees


110

 N/A 

 N/A 

 N/A 

 N/A 


110

108

105

101

424


WAAM Commissions


12

 N/A 

 N/A 

 N/A 

 N/A 


10

11

23

21

65


Ancillary Revenues (f)


5

 N/A 

 N/A 

 N/A 

 N/A 


6

6

6

5

23


Total Vacation Ownership


501

 N/A 

 N/A 

 N/A 

 N/A 


450

541

559

527

2,077

Total Reportable Segments


$   1,047

 N/A 

 N/A 

 N/A 

 N/A 


$   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 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





























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









(a)  Marketing and reservation revenues represent fees we receive from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific reservation system. These fees are typically based on a percentage of the gross room revenues of each hotel. Wyndham Rewards revenues represent fees we receive relating to our loyalty program.

(b)  Primarily represents payroll costs in our hotel management business that we pay on behalf of property owners and for which we are reimbursed by the property owners.

(c)  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 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)








































March 31,

2012


December 31,

2011


September 30,

2011


June 30,

2011


March 31,

2011

















Securitized vacation ownership debt (a)











Term notes


$        1,896


$                 1,625


$           1,512


$     1,446


$        1,666

Bank conduit facility (b)


104


237


218


242


148

Securitized vacation ownership debt (c)


2,000


1,862


1,730


1,688


1,814

Less: Current portion of securitized vacation ownership debt


206


196


179


190


216

Long-term securitized vacation ownership debt


$         1,794


$                 1,666


$           1,551


$     1,498


$         1,598

















Debt:











Revolving credit facility (due July 2016) (d)


$              47


$                    218


$              169


$        107


$                5

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


44


36


27


32


41

9.875% senior unsecured notes (due May 2014) (f)


42


243


243


242


241

6.00% senior unsecured notes (due December 2016) (g)


362


811


812


803


797

2.95% senior unsecured notes (due March 2017) (h)


298


-


-


-


-

5.75% senior unsecured notes (due February 2018) (i)


247


247


247


247


247

7.375% senior unsecured notes (due March 2020) (j)


248


247


247


247


247

5.625% senior unsecured notes (due March 2021) (k)


245


245


245


245


245

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


643


-


-


-


-

Vacation rentals capital leases


103


102


108


120


120

Other


1


4


1


1


28

Total debt


2,280


2,153


2,099


2,044


1,971

Less: Current portion of debt


54


46


37


43


12

Long-term debt


$            2,226


$                 2,107


$           2,062


$     2,001


$            1,959

__________















(a)  The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPE") that are consolidated within our financial statements.  These bankruptcy-remote SPEs are legally separate from the Company.  The receivables held by the bankruptcy-remote SPEs are not available to the Company's creditors and legally are not the Company's assets.  Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.

(b)  Represents a non-recourse vacation ownership bank conduit facility with a term through June 2013 and borrowing capacity of $600 million.  As of March 31, 2012, this facility had remaining borrowing capacity of $496 million.

(c)  This debt is collateralized by  $2,622 million, $2,638 million, $2,502 million, $2,672 million and $2,778 million of underlying vacation ownership contract receivables and related assets as of March 31, 2012, December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively.

(d)  Represents a $1.0 billion revolving credit facility that expires on July 15, 2016.  As of March 31, 2012, the Company had $11 million of outstanding letters of credit and a remaining borrowing capacity of $942 million.  

(e)  Represents convertible notes issued by the Company during May 2009.  The balance at March 31, 2012 represents $12 million aggregate principal plus a $32 million liability related to a bifurcated conversion feature. 

(f)  Represents senior unsecured notes issued by the Company during May 2009.  The balance as of March 31, 2012 represents $43 million aggregate principal less $1 million of unamortized discount.

(g)  Represents senior unsecured notes issued by the Company during December 2006.  The balance as of March 31, 2012 represents $357 million aggregate principal less $1 million of unamortized discount, plus $6 million of unamortized gains from the settlement of a derivative.

(h)  Represents senior unsecured notes issued by the Company during March 2012.  The balance as of March 31, 2012 represents $300 million aggregate principal less $2 million of unamortized discount.

(i)  Represents senior unsecured notes issued by the Company during September 2010.  The balance as of  March 31, 2012 represents $250 million aggregate principal less $3 million of unamortized discount.

(j)  Represents senior unsecured notes issued by the Company during February 2010.  The balance as of March 31, 2012 represents $250 million aggregate principal less $2 million of unamortized discount.

(k)  Represents senior unsecured notes issued by the Company during March 2011.  The balance as of March 31, 2012 represents $250 million aggregate principal less $5 million of unamortized discount.

(l)  Represents senior unsecured notes issued by the Company during March 2012.  The balance as of March 31, 2012 represents $650 million aggregate principal less $7 million of unamortized discount.























Table 6








Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Three Months Ended March 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

98

25,901

55.7%

$111.04

$61.87








TRYP by Wyndham

90

12,904

51.2%

$96.12

$49.25








Wingate by Wyndham

161

14,750

57.7%

$80.22

$46.26








Hawthorn Suites by Wyndham

78

7,400

59.3%

$73.85

$43.83








Ramada 

843

114,251

47.6%

$75.97

$36.19








Baymont

255

21,425

44.6%

$60.44

$26.98








Days Inn 

1,834

148,235

42.6%

$59.00

$25.12








Super 8 

2,253

142,686

47.2%

$50.56

$23.89








Howard Johnson 

440

44,090

44.3%

$58.98

$26.10








Travelodge 

434

32,602

42.8%

$61.39

$26.27








Microtel Inns & Suites

310

22,086

49.1%

$58.37

$28.69








Knights Inn 

350

21,867

36.5%

$40.23

$14.69








Dream

5

990

75.2%

$194.51

$146.20








Night

1

72

90.6%

$203.86

$184.77









Total Lodging

7,152

609,259

46.2%

$64.41

$29.73








Vacation Ownership






Wyndham Vacation Ownership resorts

165

20,764

N/A

N/A

N/A









Total Wyndham Worldwide

7,317

630,023




















As of and For the Three Months Ended March 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

94

25,521

53.3%

$106.57

$56.84








Tryp by Wyndham

92

13,420

48.3%

$111.27

$53.75








Wingate by Wyndham

165

15,134

55.8%

$78.31

$43.68








Hawthorn Suites by Wyndham

75

7,028

57.6%

$74.22

$42.73








Ramada 

888

117,278

45.4%

$73.37

$33.30








Baymont

261

21,886

41.2%

$59.02

$24.33








Days Inn 

1,877

150,214

40.5%

$58.19

$23.58








Super 8 

2,185

137,260

43.9%

$51.41

$22.56








Howard Johnson 

464

46,080

41.1%

$57.28

$23.56








Travelodge 

434

31,920

40.8%

$59.70

$24.34








Microtel Inns & Suites

316

22,528

46.3%

$55.03

$25.46








Knights Inn 

339

20,679

33.7%

$40.75

$13.74








Dream

3

566

73.1%

$177.95

$130.02








Night

1

72

93.8%

$298.78

$280.20









Total Lodging

7,194

609,586

43.5%

$63.66

$27.71








Vacation Ownership






Wyndham Vacation Ownership resorts

162

20,736

N/A

N/A

N/A









Total Wyndham Worldwide

7,356

630,322




_______________






NOTE:  A glossary of terms is included in Table 3 (3 of 3); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.








 









Table 7









(1 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATION

(In millions)
























Reported

Legacy

Allowance

Adjusted

Three months ended March 31, 2012

Net Revenues


EBITDA

Adjustments (b)

Reversal (c)

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



















________________








(a)  Includes the elimination of transactions between segments.




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

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










 














Table 7














(2 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATION

(In millions)


































Reported

Legacy

Asset 

Restructuring

VAT 

CTA

Adjusted

Three months ended March 31, 2011


Net Revenues


EBITDA

Adjustments (b)

Impairments

Costs

Adjustments (e)

Writeoff (f)

EBITDA

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

-

-


-