Wyndham Worldwide Reports Fourth Quarter and Full Year 2012 Earnings

Full Year Adjusted EPS Growth of 30%

Increases Dividend 26%

Increases EPS and EBITDA Guidance for 2013

06 Feb, 2013, 06:30 ET from Wyndham Worldwide Corporation

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

Highlights:

  • Fourth quarter adjusted diluted earnings per share (EPS) was $0.63, compared with $0.47 in the fourth quarter of 2011, an increase of 34%.  Fourth quarter 2012 reported diluted EPS was $0.57, an increase of 54% from the same period in 2011.
  • Free cash flow increased to $796 million for the year ended December 31, 2012, compared with $764 million in 2011.
  • The Company's Board of Directors authorized an increase in the quarterly cash dividend to $0.29 from $0.23 per share, beginning with the dividend that is expected to be declared in the first quarter of 2013.
  • During the quarter, the Company repurchased 2.9 million shares of its common stock for $151 million.  For the full year, the Company spent $623 million to repurchase 12.9 million shares of its common stock.

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

FOURTH QUARTER 2012 OPERATING RESULTS Fourth quarter revenues increased 9% from the prior year period to $1.1 billion. The increase primarily reflects growth in the Company's lodging and vacation ownership businesses.

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

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

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

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

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

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

BUSINESS UNIT RESULTS

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

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

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

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

Vacation Exchange and Rentals (Wyndham Exchange & Rentals) Revenues were $293 million in the fourth quarter of 2012, compared with $291 million in the fourth quarter of 2011.  In constant currency and excluding the impact of acquisitions, revenues were flat.

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

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

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

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

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

Adjusted EBITDA for the fourth quarter of 2012 was $144 million, excluding $2 million of acquisition related restructuring costs, compared with EBITDA of $139 million in the fourth quarter of 2011, a 4% increase.  Such increase was primarily due to the revenue increases and the impact of the Shell acquisition, partially offset by higher general and administrative costs and incremental intersegment licensing fees. 

Other Items

  • During 2013, the Company repurchased an additional 1.1 million shares for $60 million through February 5.  The Company has $447 million remaining on its current share repurchase authorization.
  • Net interest expense in the fourth quarter of 2012 was $33 million, a decrease of $3 million from the fourth quarter of 2011, primarily due to lower interest rates offsetting higher average borrowings. 

  Balance Sheet Information as of December 31, 2012:

  • Cash and cash equivalents of $195 million, compared with $142 million at December 31, 2011
  • Vacation ownership contract receivables, net, of $2.9 billion, compared with $2.8 billion at December 31, 2011
  • Vacation ownership and other inventory of $1.1 billion, unchanged from December 31, 2011
  • Securitized vacation ownership debt of $2.0 billion, compared with $1.9 billion at December 31, 2011
  • Long-term debt of $2.6 billion, compared with $2.2 billion at December 31, 2011. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $631 million, compared with $771 million as of December 31, 2011

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

Outlook

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

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

  • Revenues of $4.925 - $5.100 billion, up from $4.90$5.05 billion
  • EBITDA of $1.140 - $1.165 billion, up from $1.125$1.150 billion
  • EPS of $3.57 - $3.70, up from $3.50 - $3.60
  • Weighted average diluted shares of 140 million, down from 143 million

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

Conference Call Information Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, February 6, 2013 at 8:30 a.m. EST. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EST on February 6, 2013. The conference call may also be accessed by dialing (888) 942-9868 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EST on February 6, 2013, at (888) 473-0137.

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

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

Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements.  Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  The forward-looking statements contained in this press release include statements related to the Company's revenues, earnings, dividends and related financial and operating measures.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Quarterly Report on Form 10-Q, filed with the SEC on October 24, 2012.  Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 

Table 1

(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

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

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

Three Months Ended December 31,

2012

2011

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     223

$                     62

$                     188

$                      (3)

 (e) 

Vacation Exchange and Rentals

293

28

 (b) 

291

38

Vacation Ownership

590

142

 (c) 

527

139

     Total Reportable Segments

1,106

232

1,006

174

Corporate and Other (a)

(12)

(28)

 (d) 

(6)

(26)

     Total Company

$                  1,094

$                   204

$                  1,000

$                   148

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

EBITDA

$                   204

$                   148

Depreciation and amortization

49

45

Interest expense

35

37

Interest income

(2)

(1)

Income before income taxes

122

67

Provision for income taxes

41

11

Net income attributable to Wyndham shareholders

$                     81

$                     56

__________

(a)

Includes the elimination of transactions between segments.  

(b)

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

(c)

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

(d)

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

(e)

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

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

Three Months Ended December 31, 

2012

2011

Adjusted

Adjusted

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     223

$                     62

$                     188

$                     41

Vacation Exchange and Rentals

293

42

291

38

Vacation Ownership

590

144

527

139

     Total Reportable Segments

1,106

248

1,006

218

Corporate and Other

(12)

(30)

(6)

(26)

     Total Company

$                  1,094

$                   218

$                  1,000

$                   192

 

Table 1

(2 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

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

Twelve Months Ended December 31, 

2012

2011

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     890

$                   272

 (b) 

$                     749

$                   157

 (g) 

Vacation Exchange and Rentals

1,422

328

 (c) 

1,444

368

 (h) 

Vacation Ownership

2,269

549

 (d) 

2,077

515

 (i) 

     Total Reportable Segments

4,581

1,149

4,270

1,040

Corporate and Other (a)

(47)

(104)

 (e) 

(16)

(84)

 (e) 

     Total Company

$                  4,534

$                1,045

$                  4,254

$                   956

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

EBITDA

$                1,045

$                   956

Depreciation and amortization

185

178

Interest expense

132

140

 (j) 

Early extinguishment of debt

108

 (f) 

12

 (k) 

Interest income

(8)

(24)

 (l) 

Income before income taxes

628

650

Provision for income taxes

229

233

Net income

399

417

Net loss attributable to noncontrolling interest

1

-

Net income attributable to Wyndham shareholders

$                   400

$                   417

__________

(a)

Includes the elimination of transactions between segments.  

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

Includes (i) a $31 million net benefit resulting from a refund of value added taxes, (ii) $7 million of restructuring costs incurred in connection with a strategic initiative commenced by the Company during 2010 and (iii) a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

(i)

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

(j)

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

(k)

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

(l)

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

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

Twelve Months Ended December 31, 

2012

2011

Adjusted

Adjusted

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     890

$                   271

$                     749

$                   214

Vacation Exchange and Rentals

1,422

340

1,444

348

Vacation Ownership

2,269

552

2,077

514

     Total Reportable Segments

4,581

1,163

4,270

1,076

Corporate and Other

(47)

(109)

(16)

(100)

     Total Company

$                  4,534

$                1,054

$                  4,254

$                   976

 

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

 Three Months Ended 

 Twelve Months Ended 

 December 31, 

 December 31, 

2012

2011

2012

2011

Net revenues

Service and membership fees

$              446

$              434

$           2,005

$           2,012

Vacation ownership interest sales

337

295

1,323

1,150

Franchise fees

134

127

583

522

Consumer financing

110

105

421

415

Other

67

39

202

155

Net revenues

1,094

1,000

4,534

4,254

Expenses

Operating

454

(b)

422

1,842

(b)

1,781

(h)

Cost of vacation ownership interests 

46

37

161

152

Consumer financing interest

21

25

90

92

Marketing and reservation

169

156

723

628

General and administrative(a)

185

170

666

593

(i)

Asset impairments

8

(c)

44

(e)

8

(c)

57

(e)

Restructuring

7

(d)

-

7

(d)

6

(j)

Depreciation and amortization

49

45

185

178

Total expenses

939

899

3,682

3,487

Operating income

155

101

852

767

Other income, net

-

(2)

(8)

(f)

(11)

(k)

Interest expense

35

37

132

140

(l)

Early extinguishment of debt

-

-

108

(g)

12

(m)

Interest income

(2)

(1)

(8)

(24)

(n)

Income before income taxes

122

67

628

650

Provision for income taxes

41

11

229

233

(o)

Net income

81

56

399

417

Net loss attributable to noncontrolling interest

-

-

1

-

Net income attributable to Wyndham shareholders

$                81

$                56

$              400

$              417

Earnings per share

Basic

$             0.58

$             0.37

$             2.80

$             2.57

Diluted

0.57

0.37

2.75

2.51

Weighted average shares outstanding

Basic

139

151

143

162

Diluted

141

154

145

166

__________

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

(i)

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

(j)

Includes (i) $7 million of costs incurred as a result of a strategic initiative commenced by the Company during 2010 and (ii) a $1 million benefit for the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

(k)

Includes $4 million of a gain related to the redemption of a preferred stock investment allocated to the Company in connection with our separation from Cendant.

(l)

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

(m)

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

(n)

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

(o)

Includes a benefit of $13 million related to the reversal of a tax valuation allowance.

 

Table 3

(1 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS

Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)

Number of Rooms 

2012

609,300

608,300

618,100

627,400

 N/A 

2011

609,600

612,900

611,200

613,100

 N/A 

2010

593,300

606,800

605,700

612,700

 N/A 

2009

588,500

590,200

590,900

597,700

 N/A 

RevPAR

2012

$               29.73

$               37.23

$               40.39

$               31.86

$               34.80

2011

$               27.71

$               35.38

$               39.49

$               30.65

$               33.34

2010

$               25.81

$               32.25

$               37.14

$               29.18

$               31.14

2009

$               27.69

$               32.38

$               34.81

$               26.47

$               30.34

Vacation Exchange and Rentals

Average Number of Members (in 000s)

2012

3,684

3,670

3,672

3,670

3,674

2011

3,766

3,755

3,744

3,734

3,750

2010

3,746

3,741

3,766

3,759

3,753

2009

3,789

3,795

3,781

3,765

3,782

Exchange Revenue Per Member

2012

$             204.56

$             177.07

$             171.14

$             165.86

$             179.68

2011

$             205.64

$             178.46

$             172.38

$             161.68

$             179.59

2010

$             201.93

$             172.20

$             173.44

$             162.59

$             177.53

2009

$             194.83

$             174.22

$             173.90

$             163.89

$             176.73

Vacation Rental Transactions (in 000s) (b)

2012

418

325

390

259

1,392

2011

398

328

370

250

1,347

2010

291

297

322

253

1,163

2009

273

231

264

196

964

Average Net Price Per Vacation Rental(b)

2012

$             379.40

$             524.40

$             635.44

$             484.69

$             504.55

2011

$             377.71

$             549.09

$             701.81

$             497.04

$             530.78

2010

$             361.17

$             387.01

$             500.31

$             449.12

$             425.38

2009

$             353.15

$             471.74

$             594.34

$             499.66

$             477.38

Vacation Ownership (c)

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

2012

$           384,000

$           460,000

$           502,000

$           435,000

$        1,781,000

2011

$           319,000

$           412,000

$           455,000

$           409,000

$        1,595,000

2010

$           308,000

$           371,000

$           412,000

$           373,000

$        1,464,000

2009

$           280,000

$           327,000

$           366,000

$           343,000

$        1,315,000

Tours (e)

2012

148,000

186,000

207,000

183,000

724,000

2011

137,000

177,000

197,000

173,000

685,000

2010

123,000

163,000

187,000

160,000

634,000

2009

137,000

164,000

173,000

142,000

617,000

Volume Per Guest (VPG) (e)

2012

$               2,414

$               2,361

$               2,315

$               2,225

$               2,324

2011

$               2,192

$               2,227

$               2,197

$               2,296

$               2,229

2010

$               2,334

$               2,156

$               2,081

$               2,214

$               2,183

2009

$               1,866

$               1,854

$               1,944

$               2,210

$               1,964

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

(a)

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

(b)

Includes the impact of the acquisitions of Hoseasons (March 2010), ResortQuest (September 2010), James Villa Holidays (November 2010), two tuck-in acquisitions (third quarter 2011) and Smoky Mountain Property Management Group (August 2012) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

(c)

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

(d)

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

(e)

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

Table 3

(2 of 3)

Wyndham Worldwide Corporation

ADDITIONAL DATA

Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)

Number of Properties

2012

7,150

7,170

7,260

7,340

 N/A 

2011

7,190

7,220

7,190

7,210

 N/A 

2010

7,090

7,160

7,150

7,210

 N/A 

2009

6,990

7,020

7,040

7,110

 N/A 

Vacation Ownership

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

2012

$             96,000

$           100,000

$           124,000

$             89,000

$           409,000

2011

$             79,000

$             80,000

$             96,000

$             83,000

$           339,000

2010

$             86,000

$             87,000

$             85,000

$             82,000

$           340,000

2009

$           107,000

$           122,000

$           117,000

$           103,000

$           449,000

Sales under WAAM 1.0 (in 000s) (c) 

2012

$             17,000

$             18,000

$               5,000

$             10,000

$             49,000

2011

$             18,000

$             19,000

$             38,000

$             31,000

$           106,000

2010

$               5,000

$             13,000

$             20,000

$             14,000

$             51,000

WAAM 1.0 Commission Revenues (in 000s)

2012

$             12,000

$             11,000

$               4,000

$               6,000

$             33,000

2011

$             10,000

$             11,000

$             23,000

$             21,000

$             65,000

2010

$               3,000

$               8,000

$             12,000

$               9,000

$             31,000

Sales under WAAM 2.0 (in 000s) (d) 

2012

$                      -

$             12,000

$             57,000

$             30,000

$             99,000

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

(a)

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

(b)

Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.

(c)

Represents gross VOI sales under the Company's WAAM 1.0 for which the Company earns commission revenue (WAAM 1.0 Commission Revenues).  The commission revenue earned on these sales is included in service fees and membership revenues on the Consolidated Statements of Income.  The Company implemented this sales model during the first quarter of 2010 and, as such, there is no historical data prior to 2010.

(d)

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

Table 3

(3 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS

GLOSSARY OF TERMS

Lodging

Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, or company owned, (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided or (iii) properties managed under a joint venture.  

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.  

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR.  Comparable RevPAR represents RevPAR of hotels which are included in both periods.

Vacation Exchange and Rentals

Average Number of Members: Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or within the allowed grace period. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with our vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related services and products.

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

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

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

Vacation Ownership

Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including Wyndham Asset Affiliation Model sales, before the net effect 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

$             80

$             88

$             71

$           301

$             58

$             75

$             85

$             66

$           284

Marketing, Reservation and Wyndham Rewards Revenues (a)

68

99

98

80

345

54

75

94

76

299

Hotel Management Reimbursable Revenues (b)

21

22

25

23

91

19

19

21

20

79

Inter-segment Trademark Fees (c)

8

9

9

8

34

1

2

3

4

10

Owned Hotel Revenues

8

8

7

18

41

-

-

-

5

5

Ancillary Revenues (d)

18

15

22

23

78

17

19

19

17

72

Total Lodging

185

233

249

223

890

149

190

222

188

749

Vacation Exchange and Rentals

Exchange Revenues

188

162

157

153

660

194

168

161

150

673

Rental Revenues

159

170

248

125

702

150

180

260

125

715

Ancillary Revenues (e)

14

16

15

15

60

12

13

15

16

56

Total Vacation Exchange and Rentals

361

348

420

293

1,422

356

361

436

291

1,444

Vacation Ownership

Vacation Ownership Interest Sales

271

342

373

337

1,323

222

313

320

295

1,150

Consumer Financing

103

102

106

110

421

102

103

105

105

415

Property Management Fees

110

108

117

125

460

110

108

105

101

424

WAAM 1.0 Commissions

12

11

4

6

33

10

11

23

21

65

Ancillary Revenues (f)

5

7

8

12

32

6

6

6

5

23

Total Vacation Ownership

501

570

608

590

2,269

450

541

559

527

2,077

Total Reportable Segments

$      1,047

$      1,151

$      1,277

$      1,106

$      4,581

$          955

$      1,092

$      1,217

$      1,006

$      4,270

2010

2009

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Lodging

Royalties and Franchise Fees

$             52

$             69

$             82

$             62

$           265

$             57

$             68

$             72

$             57

$           254

Marketing, Reservation and Wyndham Rewards Revenues (a)

50

65

76

60

251

54

66

73

53

246

Hotel Management Reimbursable Revenues (b)

21

20

18

18

77

22

23

21

19

85

Ancillary Revenues (d)

21

24

27

23

95

21

17

17

20

75

Total Lodging

144

178

203

163

688

154

174

183

149

660

Vacation Exchange and Rentals

Exchange Revenues

189

161

163

153

666

185

165

164

154

668

Rental Revenues

105

115

161

114

495

96

109

157

98

460

Ancillary Revenues (e)

6

5

6

15

32

6

6

6

6

24

Total Vacation Exchange and Rentals

300

281

330

282

1,193

287

280

327

258

1,152

Vacation Ownership

Vacation Ownership Interest Sales

217

271

308

276

1,072

239

242

285

287

1,053

Consumer Financing

105

106

107

107

425

109

109

108

109

435

Property Management Fees

100

100

104

101

405

91

94

96

95

376

WAAM 1.0 Commissions (g)

3

8

12

8

31

-

-

-

-

-

Ancillary Revenues (f)

19

20

2

5

46

23

22

19

17

81

Total Vacation Ownership

444

505

533

497

1,979

462

467

508

508

1,945

Total Reportable Segments

$          888

$          964

$      1,066

$          942

$      3,860

$          903

$          921

$      1,018

$          915

$      3,757

(a)

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

(b)

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

(c)

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

(d)

Primarily includes additional services provided to franchisees.

(e)

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

(f)

Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.

(g)

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

 

Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

December 31,

2012

September 30,

2012

June 30,

2012

March 31,

2012

December 31,

2011

Securitized vacation ownership debt (a)

Term notes

$               1,770

$          1,702

$         1,634

$           1,896

$              1,625

Bank conduit facility (b)

190

220

220

104

237

Securitized vacation ownership debt (c)

1,960

1,922

1,854

2,000

1,862

Less: Current portion of securitized vacation ownership debt

218

206

191

206

196

Long-term securitized vacation ownership debt

$               1,742

$          1,716

$         1,663

$           1,794

$              1,666

Debt:

Revolving credit facility (due July 2016) (d)

$                    85

$             270

$              81

$                47

$                 218

Commercial paper(e)

273

-

-

-

-

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

-

-

-

44

36

9.875% senior unsecured notes (due May 2014)

42

42

42

42

243

6.00% senior unsecured notes (due December 2016)

361