Wyndham Worldwide Reports Second Quarter 2013 Earnings

Second Quarter Adjusted EPS Up 13% Year-Over-Year

Share Repurchase Authorization Increased

Raised Full Year EPS Guidance

24 Jul, 2013, 06:30 ET from Wyndham Worldwide Corporation

PARSIPPANY, N.J., July 24, 2013 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2013. 

Highlights:

  • Second quarter diluted earnings per share (EPS) was $0.98 on both a reported and adjusted basis, an increase of 13% from adjusted diluted EPS of $0.87 in the second quarter of 2012.  Reported diluted EPS was $0.88 in the second quarter of 2012.
  • Revenues increased 10% from the prior-year period.
  • Free cash flow increased 15% for the six months ended June 30, 2013, compared with the same period in 2012.  Net cash provided by operating activities increased 17% over the same period.
  • During the quarter, the Company repurchased 2.9 million shares of its common stock for $175 million.
  • The Company announced today that its Board of Directors approved a $750 million increase in the share repurchase authorization, bringing the available authorization to $874 million.
  • On July 23, 2013, the Company completed a term securitization transaction involving the issuance of $325 million of asset-backed notes with a 2.68% weighted average coupon and a 98% advance rate.

"We once again delivered strong results this quarter, reflecting great operating momentum and disciplined capital allocation," said Stephen P. Holmes, chairman and CEO.  "This winning combination, along with continued innovation and a commitment to customer service, has enabled us to achieve outstanding results for our shareholders during our seven years as a public company, which is an anniversary we mark next week.  The decision by our Board of Directors to increase our share repurchase authorization is evidence of our confidence that this powerful formula will continue to deliver and create value."

SECOND QUARTER 2013 OPERATING RESULTS

Second quarter revenues were $1.3 billion, an increase of 10% from the prior year period.  The increase reflects strong growth across all of the Company's business segments.

Second quarter net income was $133 million, or $0.98 per diluted share, compared with $128 million, or $0.87 per adjusted diluted share for the same period in 2012.  Reported diluted EPS was $0.88 in the second quarter of 2012.  The increase in net income reflects stronger operating results in all of the Company's segments.  EPS also benefited from the Company's share repurchase program.

Free cash flow was $654 million for the six months ended June 30, 2013, compared with $569 million for the same period in 2012, a 15% increase.  The growth of free cash flow largely reflects favorable working capital timing.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures.  For the six months ended June 30, 2013, net cash provided by operating activities was $758 million, compared with $647 million in the prior year period. 

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group) Revenues were $262 million in the second quarter of 2013, a 12% increase over the second quarter of 2012.  The increase reflects higher hotel management reimbursable fees and revenues associated with the Company's owned hotels. 

Domestic RevPAR increased 5.3% compared with the second quarter of 2012.  Total system-wide RevPAR increased 2.1%, reflecting proportionally higher growth of lower RevPAR hotels in China. 

Adjusted EBITDA for the second quarter of 2013 was $78 million, a 5% increase compared with the second quarter of 2012.  The increase was primarily due to higher royalties and ancillary fees.

As of June 30, 2013, the Company's hotel system consisted of approximately 7,410 properties and over 635,100 rooms, a 4.4% room increase compared with the second quarter of 2012.  The development pipeline included over 940 hotels and approximately 112,000 rooms, of which 57% were international and 62% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals) Revenues were $376 million in the second quarter of 2013, an 8% increase over the second quarter of 2012.  In constant currency and excluding the impact of acquisitions, revenues increased 4%.

Exchange revenues were $168 million, an increase of 4% compared with the second quarter of 2012.  Exchange revenue per member increased 3.0%, while the average number of members remained flat. 

Vacation rental revenues were $192 million, a 13% increase compared with the second quarter of 2012.  Excluding acquisitions, vacation rental revenues were up 5%, reflecting a 4.0% increase in the average net price per vacation rental and a 1.2% increase in transaction volume.  

EBITDA for the second quarter of 2013 was $85 million, a 4% increase over the second quarter of 2012. 

Vacation Ownership (Wyndham Vacation Ownership) Revenues were $630 million in the second quarter of 2013, an 11% increase over the second quarter of 2012, primarily reflecting higher gross VOI sales and the acquisition of Shell Vacations Club. 

Gross VOI sales were $481 million in the second quarter of 2013, an increase of 5% over the second quarter of 2012, primarily reflecting a 10.8% increase in tour flow offset by a 4.4% decrease in volume per guest.  Excluding Shell Vacations Club, volume per guest decreased 2.7%.

EBITDA for the second quarter of 2013 was $161 million, a 7% increase compared with the second quarter of 2012.  The increase was primarily due to higher gross VOI sales, a lower loan loss provision and lower operating costs.

Other Items

  • The Company repurchased 2.9 million shares of common stock for $175 million during the second quarter of 2013.  From July 1 through July 23, 2013, the Company repurchased an additional 1.2 million shares for $68 million.  The Company's new share repurchase authorization totals $874 million.
  • Net interest expense in the second quarter of 2013 was $32 million, compared with $30 million in the second quarter of 2012, due to higher debt levels.
  • On July 23, 2013, the Company completed a term securitization transaction involving the issuance of $325 million of asset-backed notes. Sierra Timeshare 2013-2 Receivables Funding LLC issued $226 million of A rated notes, $62 million of BBB rated notes and $37 million of BB rated notes.  The notes had a 2.68% weighted average coupon and a 98% advance rate.

Balance Sheet Information as of June 30, 2013:

  • Cash and cash equivalents of $342 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 June 30, 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 2013, the Company expects:

  • Revenues of approximately $4.925 - $5.100 billion
  • Adjusted EBITDA of approximately $1.140 - $1.165 billion
  • Adjusted EPS of approximately $3.66 - $3.76 based on a diluted share count of 136 million, from $3.60 - $3.70 based on a diluted share count of 138 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, the Company's assumptions and guidance may change materially.

Conference Call Information Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, July 24, 2013 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 July 24, 2013. 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 EDT on July 24, 2013, at 866-430-8799.

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 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 7,410 franchised hotels and over 635,100 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 106,000 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 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.

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 June 30, 2013 and 2012:         

Three Months Ended June 30,

2013

2012

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     262

$               78

$                     233

$                        75

 (b) 

Vacation Exchange and Rentals

376

85

348

82

Vacation Ownership

630

161

570

150

     Total Reportable Segments

1,268

324

1,151

307

Corporate and Other (a)

(15)

(27)

(12)

(25)

     Total Company

$                  1,253

$             297

$                  1,139

$                      282

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

EBITDA

$             297

$                      282

Depreciation and amortization

54

46

Interest expense

34

32

Interest income

(2)

(2)

Income before income taxes

211

206

Provision for income taxes

78

78

Net income attributable to Wyndham shareholders

$             133

$                      128

(a)

Includes the elimination of transactions between segments.  

(b)

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

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended June 30, 2013 and 2012 (for a

description of adjustments by segment, see Table 7):

 

Three Months Ended June 30, 

2013

2012

Adjusted

Adjusted

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     262

$               78

$                     233

$                        74

Vacation Exchange and Rentals

376

85

348

82

Vacation Ownership

630

161

570

150

     Total Reportable Segments

1,268

324

1,151

306

Corporate and Other

(15)

(27)

(12)

(25)

     Total Company

$                  1,253

$             297

$                  1,139

$                      281

 

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 six months ended June 30, 2013 and 2012:

Six Months Ended June 30, 

2013

2012

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     485

$                   137

$                     418

$                   123

 (d) 

Vacation Exchange and Rentals

750

179

709

177

 (e) 

Vacation Ownership

1,179

272

 (b) 

1,071

253

     Total Reportable Segments

2,414

588

2,198

553

Corporate and Other (a)

(27)

(57)

(23)

(46)

 (f) 

     Total Company

$                  2,387

$                   531

$                  2,175

$                   507

Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders

EBITDA

$                   531

$                   507

Depreciation and amortization

106

91

Interest expense

66

65

Early extinguishment of debt

111

 (c) 

106

 (g) 

Interest income

(4)

(5)

Income before income taxes

252

250

Provision for income taxes

92

91

Net income

160

159

Net loss attributable to noncontrolling interest

-

1

Net income attributable to Wyndham shareholders

$                   160

$                   160

(a)

Includes the elimination of transactions between segments.  

(b)

Includes $2 million of costs incurred in connection with the acquisition of a WAAM 2.0 property (January 2013).

(c)

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 its 9.875% senior unsecured notes.

(d)

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

(e)

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

(f)

Includes $4 million of a net benefit during the six months ended June 30, 2012, related to the resolution of and adjustment to certain contingent liabilities

and assets resulting from our separation from Cendant.

(g)

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

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the six months ended June 30, 2013 and 2012 (for a

description of adjustments by segment, see Table 7):

Six Months Ended June 30, 

2013

2012

Adjusted

Adjusted

 Net Revenues 

 EBITDA 

 Net Revenues 

 EBITDA 

Lodging

$                     485

$                   137

$                     418

$                   122

Vacation Exchange and Rentals

750

179

709

175

Vacation Ownership

1,179

274

1,071

253

     Total Reportable Segments

2,414

590

2,198

550

Corporate and Other

(27)

(57)

(23)

(50)

     Total Company

$                  2,387

$                   533

$                  2,175

$                   500

 

 

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

 Three Months Ended 

 Six Months Ended 

 June 30, 

 June 30, 

2013

2012

2013

2012

Net revenues

Service and membership fees

$          583

$          489

$       1,152

$          993

Vacation ownership interest sales

347

342

611

613

Franchise fees

152

163

274

281

Consumer financing

106

102

211

205

Other

65

43

139

83

Net revenues

1,253

1,139

2,387

2,175

Expenses

Operating

548

451

1,056

(a)

895

Cost of vacation ownership interests 

32

42

64

70

Consumer financing interest

20

23

40

46

Marketing and reservation

181

190

357

356

General and administrative

177

156

342

310

(d)

Depreciation and amortization

54

46

106

91

Total expenses

1,012

908

1,965

1,768

Operating income

241

231

422

407

Other income, net

(2)

(5)

(c)

(3)

(9)

(c) (e)

Interest expense

34

32

66

65

Early extinguishment of debt

-

-

111

(b)

106

(f)

Interest income

(2)

(2)

(4)

(5)

Income before income taxes

211

206

252

250

Provision for income taxes

78

78

92

91

Net income

133

128

160

159

Net loss attributable to noncontrolling interest

-

-

-

1

Net income attributable to Wyndham shareholders

$          133

$          128

$          160

$          160

Earnings per share

Basic

$         0.99

$         0.89

$         1.18

$         1.10

Diluted

0.98

0.88

1.17

1.08

Weighted average shares outstanding

Basic

135

144

136

145

Diluted

136

147

137

148

__________

(a)

Includes $2 million of costs incurred in connection with the acquisition of a WAAM 2.0 property (January 2013).

(b)

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 its 9.875% senior unsecured notes.

(c)

Includes a $1 million benefit from the recovery of a previously recorded impairment charge at the Company's lodging

business.

(d)

Includes $4 million of a net benefit during the six months ended June 30, 2012 related to the resolution of and

adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(e)

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.

(f)

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

notes. 

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

 N/A 

 N/A 

 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

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

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) (b)

2013

423

355

 N/A 

 N/A 

 N/A 

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(b)

2013

$             392.64

$             540.38

 N/A 

 N/A 

 N/A 

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 (c)

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

2013

$           384,000

$           481,000

 N/A 

 N/A 

 N/A 

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 (e)

2013

163,000

206,000

 N/A 

 N/A 

 N/A 

2012

148,000

186,000

207,000

183,000

724,000

2011

137,000

177,000

197,000

173,000

685,000

2010

0

163,000

187,000

160,000

634,000

Volume Per Guest (VPG) (e)

2013

$               2,211

$               2,256

 N/A 

 N/A 

 N/A 

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 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), Smoky Mountain Property Management

Group (August 2012), Oceana Resorts (December 2012) and four tuck-in acquisitions (Q3 2011, Q4 2012 and Q1 2013) from their 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) 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 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

 N/A 

 N/A 

 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

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

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.

(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 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 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 during the period 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 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 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 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

 N/A 

 N/A 

 N/A 

$             62

$             80

$             88

$             71

$           301

Marketing, Reservation and Wyndham Rewards Revenues (a)

73

92

 N/A 

 N/A 

 N/A 

68

99

98

80

345

Hotel Management Reimbursable Revenues (b)

25

38

 N/A 

 N/A 

 N/A 

21

22

25

23

91

Inter-segment Trademark Fees

8

10

 N/A 

 N/A 

 N/A 

8

9

9

8

34

Owned Hotel Revenues

26

20

 N/A 

 N/A 

 N/A 

8

8

7

18

41

Ancillary Revenues (d)

26

23

 N/A 

 N/A 

 N/A 

18

15

22

23

78

Total Lodging

222

262

 N/A 

 N/A 

 N/A 

185

233

249

223

890

Vacation Exchange and Rentals

Exchange Revenues

193

168

 N/A 

 N/A 

 N/A 

188

162

157

153

660

Rental Revenues

166

192

 N/A 

 N/A 

 N/A 

159

170

248

125

702

Ancillary Revenues (e)

15

16

 N/A 

 N/A 

 N/A 

14

16

15

15

60

Total Vacation Exchange and Rentals

374

376

 N/A 

 N/A 

 N/A 

361

348

420

293

1,422

Vacation Ownership

Vacation Ownership Interest Sales

263

347

 N/A 

 N/A 

 N/A 

271

342

373

337

1,323

Consumer Financing

105

106

 N/A 

 N/A 

 N/A 

103

102

106

110

421

Property Management Fees

146

141

 N/A 

 N/A 

 N/A 

110

108

117

125

460

WAAM 1.0 Commissions

24

30

 N/A 

 N/A 

 N/A 

12

11

4

6

33

Ancillary Revenues (f)

11

6

 N/A 

 N/A 

 N/A 

5

7

8

12

32

Total Vacation Ownership

549

630

 N/A 

 N/A 

 N/A 

501

570

608

590

2,269

Total Reportable Segments

$      1,145

$      1,268

 N/A 

 N/A 

 N/A 

$      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 (c)

1

2

3

4

10

-

-

-

-

-

Owned Hotel Revenues

-

-

-

5

5

-

-

-

-

-

Ancillary Revenues (d)

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 (e)

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 (f)

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

(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.

 

Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

June 30,

2013

March 31,

2013

December 31,

2012

September 30,

2012

June 30,

2012

Securitized vacation ownership debt (a)

Term notes

$         1,569

$           1,869

$               1,770

$          1,702

$         1,634

Bank conduit facility (b)

289

125

190

220

220

Securitized vacation ownership debt (c)

1,858

1,994

1,960

1,922

1,854

Less: Current portion of securitized vacation ownership debt

217

228

218

206

191

Long-term securitized vacation ownership debt

$         1,641

$           1,766

$               1,742

$          1,716

$         1,663

Debt:

Revolving credit facility (due July 2018) (d)

$              41

$                34

$                    85

$             270

$              81

Commercial paper(e)

168

202

273

-

-

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

-

-

42

42

42

6.00% senior unsecured notes (due December 2016)

319

319

361

361

362

2.95% senior unsecured notes (due March 2017)

298

298

298

298

298

5.75% senior unsecured notes (due February 2018)

14

14

248

248

248

2.50% senior unsecured notes (due March 2018)

447

447

-

-

-

7.375% senior unsecured notes (due March 2020)

40

40

248

248

248

5.625% senior unsecured notes (due March 2021)

246

246

246

246

245

4.25% senior unsecured notes (due March 2022)

644

644

644

644

644

3.90% senior unsecured notes (due March 2023)

397

397

-

-

-

Capital leases

184

187

105

104

95

Other

133

133

52

68

3

Total debt

2,931

2,961

2,602

2,529

2,266

Less: Current portion of debt

52

254

326

64

11

Long-term debt

$         2,879

$           2,707

$               2,276

$          2,465

$         2,255

(a)

The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPE") that are consolidated within our

financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the

Company's creditors and legally are not the Company's assets. Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.

(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2014 and borrowing capacity of $650 million. As of June 30, 2013, this

facility had a remaining borrowing capacity of $361 million.

(c)

This debt is collateralized by $2,414 million, $2,512 million, $2,543 million, $2,517 million and $2,490 million of underlying vacation ownership contract receivables and

related assets as of June 30, 2013, March 31, 2013, December 31, 2012, September 30, 2012 and June 30, 2012, respectively.

(d)

Represents a $1.5 billion revolving credit facility that expires on July 15, 2018. As of June 30, 2013, the Company had $11 million of outstanding letters of credit and a

remaining borrowing capacity of $1.4 billion. After considering outstanding commercial paper borrowings of $168 million, the remaining borrowing capacity was $1.3

billion as of June 30, 2013.

(e)

Represents a $750 million commercial paper program which the Company commenced in October 2012. As of June 30, 2013, the program had a remaining borrowing

capacity of $582 million.  

(f)

Represents senior unsecured notes issued by the Company during May 2009 and repaid by the Company during March 2013.

 

Table 6

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

As of and For the Three Months Ended June 30, 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

136

32,400

63.5%

$118.31

$75.10

     TRYP by Wyndham

103

14,344

64.6%

$95.59

$61.75

     Wingate by Wyndham

158

14,493

65.0%

$86.67

$56.34

     Hawthorn Suites by Wyndham

91

9,118

67.6%

$72.51

$49.02

     Ramada 

837

114,691

54.4%

$80.42

$43.78

     Baymont

325

26,860

55.6%

$63.70

$35.42

     Days Inn 

1,833

148,411

51.7%

$64.78

$33.46

     Super 8 

2,356

150,467

59.0%

$52.70

$31.08

     Howard Johnson 

446

45,089

48.2%

$62.57

$30.18

     Travelodge 

437

32,607

51.9%

$66.48

$34.50

     Microtel Inns & Suites by Wyndham

310

22,080

60.7%

$64.85

$39.34

     Knights Inn 

374

22,963

42.5%

$45.08

$19.17

     Dream

5

990

75.5%

$262.46

$198.18

     Night

3

630

61.5%

$169.06

$103.91

Total Lodging

7,414

635,143

55.2%

$68.78

$38.00

Vacation Ownership

     Wyndham Vacation Ownership resorts

190

23,410

N/A

N/A

N/A

Total Wyndham Worldwide

7,604

658,553

As of and For the Three Months Ended June 30, 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

101

25,360

63.2%

$111.54

$70.48

     TRYP by Wyndham

89

12,824

66.9%

$102.26

$68.37

     Wingate by Wyndham

161

14,796

65.6%

$84.70

$55.60

     Hawthorn Suites by Wyndham

77

7,355

65.3%

$75.89

$49.56

     Ramada 

841

113,275

55.5%

$79.17

$43.93

     Baymont

257

21,655

55.0%

$64.24

$35.36

     Days Inn 

1,825

146,261

51.4%

$63.92

$32.86

     Super 8 

2,275

144,570

57.8%

$53.07

$30.65

     Howard Johnson 

445

44,441

49.4%

$62.32

$30.79

     Travelodge 

433

32,159

50.7%

$66.41

$33.66

     Microtel Inns & Suites by Wyndham

308

21,967

58.0%

$62.40

$36.18

     Knights Inn 

353

22,255

42.5%

$43.11

$18.30

     Dream

5

990

73.1%

$221.34

$161.88

     Night

2

422

86.6%

$210.05

$181.94

Total Lodging

7,172

608,330

54.9%

$67.81

$37.23

Vacation Ownership

     Wyndham Vacation Ownership resorts

165

20,938

N/A

N/A

N/A

Total Wyndham Worldwide

7,337

629,268

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 Six Months Ended June 30, 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

136

32,400

60.2%

$115.98

$69.80

     TRYP by Wyndham

103

14,344

59.3%

$96.39

$57.15

     Wingate by Wyndham

158

14,493

61.0%

$85.05

$51.88

     Hawthorn Suites by Wyndham

91

9,118

63.1%

$71.57

$45.19

     Ramada 

837

114,691

51.5%

$79.58

$41.01

     Baymont

325

26,860

50.7%

$62.15

$31.50

     Days Inn 

1,833

148,411

47.3%

$63.27

$29.91

     Super 8 

2,356

150,467

54.4%

$51.38

$27.96

     Howard Johnson 

446

45,089

45.6%

$61.78

$28.17

     Travelodge 

437

32,607

47.8%

$64.89

$31.02

     Microtel Inns & Suites by Wyndham

310

22,080

56.4%

$63.01

$35.56

     Knights Inn 

374

22,963

40.4%

$43.34

$17.53

     Dream

5

990

68.5%

$220.79

$151.31

     Night

3

630

57.5%

$146.22

$84.14

Total Lodging

7,414

635,143

51.3%

$67.35

$34.55

Vacation Ownership

     Wyndham Vacation Ownership resorts

190

23,410

N/A

N/A

N/A

Total Wyndham Worldwide

7,604

658,553

As of and For the Six Months Ended June 30, 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

101

25,360

59.4%

$111.30

$66.15

     TRYP by Wyndham

89

12,824

59.0%

$99.57

$58.73

     Wingate by Wyndham

161

14,796

61.6%

$82.60

$50.91

     Hawthorn Suites by Wyndham

77

7,355

62.4%

$74.93

$46.74

     Ramada 

841

113,275

51.6%

$77.70

$40.06

     Baymont

257

21,655

49.9%

$62.54

$31.18

     Days Inn 

1,825

146,261

46.9%

$61.67

$28.95

     Super 8 

2,275

144,570

52.5%

$51.94

$27.28

     Howard Johnson 

445

44,441

46.8%

$60.72

$28.42

     Travelodge 

433

32,159

46.7%

$64.10

$29.95

     Microtel Inns & Suites by Wyndham

308

21,967

53.5%

$60.54

$32.41

     Knights Inn 

353

22,255

39.5%

$41.79

$16.51

     Dream

5

990

74.1%

$207.74

$154.04

     Night

2

422

87.4%

$208.83

$182.48

Total Lodging

7,172

608,330

50.5%

$66.25

$33.47

Vacation Ownership

     Wyndham Vacation Ownership resorts

165

20,938

N/A

N/A

N/A

Total Wyndham Worldwide

7,337

629,268

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)

Reported

Acquisition 

Adjusted

Three months ended March 31, 2013

Net Revenues

EBITDA

Costs (b)

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

(a)

Includes the elimination of transactions between segments.

(b)

Relates to costs incurred in connection with the acquisition of a WAAM 2.0 property (January 2013).

 

Table 7

(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

Reported

Legacy

Impairment

Allowance

Acquisition 

Asset

Restructuring 

Adjusted

Three months ended March 31, 2012

Net Revenues

EBITDA

Adjustments (b)

Recovery (c)

Reversal (d)

Costs (e)

Impairment (f)

Costs (g)

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 our separation from Cendant.

(c)

Relates to the recovery of a previously recorded impairment charge.

(d)

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

(e)

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

(f)

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

(g)

Relates to costs incurred as a result of organizational realignment initiatives commenced during 2012 at the Company's vacation exchange and rentals business and restructuring associated with the Shell acquisition.

 

Table 8

(1 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

Six Months Ended June 30, 2013

Legacy Adjustments

Acquisition Costs

Early Extinguishment of Debt

As Adjusted non-GAAP

 As Reported 

Net revenues

     Service and membership fees

$                   1,152

$                1,152

     Vacation ownership interest sales

611

611

     Franchise fees

274

274

     Consumer financing

211

211

     Other

139

139

Net revenues

2,387

-

-

-

2,387

Expenses

     Operating

1,056

(2)

 (b) 

1,054

     Cost of vacation ownership interests 

64

64

     Consumer financing interest

40

40

     Marketing and reservation

357

357

     General and administrative

342

342

     Depreciation and amortization

106

106

Total expenses

1,965

-

(2)

-

1,963

Operating income

422

-

2

-

424

Other income, net

(3)

(3)

Interest expense

66

66

Early extinguishment of debt

111

(111)

 (c) 

-

Interest income

(4)

(4)

Income before income taxes

252

-

2

111

365

Provision for income taxes

92

(1)

 (a) 

1

 (d) 

42

 (d) 

134

Net income attributable to Wyndham shareholders

$                      160

$                          1

$                      1

$                      69

$                   231

Earnings per share

     Basic

$                     1.18

$                     0.01

$                 0.01

$                   0.51

$                  1.71

     Diluted

1.17

0.01

0.01

0.50

1.69

Weighted average shares outstanding

     Basic

136

136

136

136

136

     Diluted

137

137

137

137

137

__________

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 a state tax payment for legacy tax matters.

(b)  Relates to costs incurred in connection with the acquisition of a WAAM 2.0 property (January 2013).

(c)  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. 

(d)  Relates to the tax effect of the adjustment.

 

Table 8

(2 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

Three Months Ended June 30, 2012

Impairment

Recovery

As Adjusted

non-GAAP

 As Reported 

Net revenues

     Service fees and membership

$                      489

$                   489

     Vacation ownership interest sales

342

342

     Franchise fees

163

163

     Consumer financing

102

102

     Other

43

43

Net revenues

1,139

-

1,139

Expenses

     Operating

451

451

     Cost of vacation ownership interests 

42

42

     Consumer financing interest

23

23

     Marketing and reservation

190

190

     General and administrative

156

156

     Depreciation and amortization

46

46

Total expenses

908

-

908

Operating income

231

-

231

Other income, net

(5)

1

 (a) 

(4)

Interest expense

32

32

Interest income

(2)

(2)

Income before income taxes

206

(1)

205

Provision for income taxes

78

(1)

 (b) 

77

Net income attributable to Wyndham shareholders

$                      128

$                        -

$                   128

Earnings per share

     Basic

$                     0.89

$                        -

$                  0.89

     Diluted

0.88

-

0.87

Weighted average shares outstanding

     Basic

144

144

144

     Diluted

147

147

147

__________

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 recovery of a previously recorded impairment charge.

(b)  Relates to the tax effect of the adjustment.

Table 8

(3 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

Six Months Ended June 30, 2012

Impairment Recovery

Legacy Adjustments

Allowance Reversal

Early Extinguishment of Debt

As Adjusted non-GAAP

 As Reported 

Net revenues

     Service fees and membership

$                      993

$                 993

     Vacation ownership interest sales

613

613

     Franchise fees

281

281

     Consumer financing

205

205

     Other

83

83

Net revenues

2,175

-

-

-

-

2,175

Expenses

     Operating

895

895

     Cost of vacation ownership interests 

70

70

     Consumer financing interest

46

46

     Marketing and reservation

356

356

     General and administrative

310

4

 (b) 

314

     Depreciation and amortization

91

91

Total expenses

1,768

-

4

-

-

1,772

Operating income

407

-

(4)

-

-

403

Other income, net

(9)

1

 (a) 

2

 (c) 

(6)

Interest expense

65

65

Early extinguishment of debt

106

(106)

 (d) 

-

Interest income

(5)

(5)

Income before income taxes

250

(1)

(4)

(2)

106

349

Provision for income taxes

91

(1)

 (e) 

(2)

 (e) 

-

 (e) 

44

 (e) 

132

Net income

159

-

(2)

(2)

62

217

Net loss attributable to noncontrolling interest

1

-

-

-

-

1

Net income attributable to Wyndham shareholders

$                      160

$                        -

$                            (2)

$                   (2)

$                      62

$                 218

Earnings per share

     Basic

$                     1.10

$                        -

$                       (0.02)

$              (0.01)

$                   0.43

$                1.50

     Diluted

1.08

-

(0.02)

(0.01)

0.42

1.47

Weighted average shares outstanding

     Basic

145

145

145

145

145

145

     Diluted

148

148

148

148

148

148

__________

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 recovery of a previously recorded impairment charge.

(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.

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

(e)  Relates to 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:

Six Months Ended June 30, 

2013

2012

Net cash provided by operating activities

$                     758

$                     647

Less: Property and equipment additions

(104)

(78)

Free cash flow

$                     654

$                     569

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

 N/A 

 N/A 

 N/A 

Less: Sales under WAAM 1.0

(36)

(44)

 N/A 

 N/A 

 N/A 

Gross VOI sales, net of WAAM 1.0 sales

347

437

 N/A 

 N/A 

 N/A 

Less: Loan loss provision

(84)

(90)

 N/A 

 N/A 

 N/A 

Vacation ownership interest sales (a)

$                     263

$                     347

 N/A 

 N/A 

 N/A 

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

 N/A 

 N/A 

 N/A 

2012

$                       27

$                       20

$                       22

$                       28

$                       97

2011

$                       18

$                       18

$                       21

$                       11

$                       68

2010

$                       20

$                       20

$                       23

$                       17

$                       80

SOURCE Wyndham Worldwide Corporation



RELATED LINKS

http://www.wyndhamworldwide.com