Wyndham Worldwide Reports Second Quarter 2014 Earnings Adjusted Diluted EPS Growth of 19%

Raises Full Year EBITDA and EPS Guidance

PARSIPPANY, N.J., July 24, 2014 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2014.

SECOND QUARTER HIGHLIGHTS:

  • Adjusted diluted earnings per share (EPS) was $1.17, an increase of 19% from adjusted diluted EPS of $0.98 in the second quarter of 2013. Reported diluted EPS was $1.20, compared with $0.98 in the second quarter of 2013.
  • Revenues increased 7% compared with the second quarter of 2013.
  • Adjusted EBITDA increased 9% compared with the second quarter of 2013.
  • The Company repurchased 2.3 million shares of its common stock for $170 million.

"We delivered strong results in the second quarter, improving upon the positive trends from the first quarter," said Stephen P. Holmes, chairman and CEO.  "Domestic RevPAR growth continued to accelerate, net Vacation Ownership Interest sales increased ten percent and we are seeing continued strong growth in rental transaction volume." 

SECOND QUARTER 2014 OPERATING RESULTS

Second quarter revenues were $1.3 billion, an increase of 7% from the prior year period.  The increase reflects growth in all of the Company's business segments.

Adjusted net income was $150 million, or $1.17 per diluted share, compared with $133 million, or $0.98 per diluted share for the same period in 2013.  The performance reflects solid operating results across all of the Company's businesses and lower interest expense.  EPS growth also benefited from the Company's share repurchase program.

Reported net income for the second quarter of 2014 was $153 million, or $1.20 per diluted share, compared with $133 million, or $0.98 per diluted share, for the second quarter of 2013.  Reported net income included items excluded from adjusted net income.  The net result of these items favorably impacted second quarter 2014 net income by $3 million.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $695 million for the six months ended June 30, 2014, compared with $654 million for the same period in 2013.  The growth of free cash flow largely reflects favorable timing of working capital.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures.  For the six months ended June 30, 2014, net cash provided by operating activities was $793 million, compared with $758 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $283 million in the second quarter of 2014, an 8% increase over the second quarter of 2013.  The increase predominantly reflects higher RevPAR. 

Domestic RevPAR increased 8.8%, partially offset by a 1.8% decline in international RevPAR, resulting in a 5.6% increase in total system-wide RevPAR compared with the second quarter of 2013.  International RevPAR declined due to unfavorable currency movements and growth in lower-RevPAR countries such as China. 

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 12% increase compared with the second quarter of 2013.  The increase was primarily due to higher RevPAR.  

As of June 30, 2014, the Company's hotel system consisted of approximately 7,540 properties and 650,200 rooms, a 2.4% room increase compared with the second quarter of 2013.  The development pipeline included over 970 hotels and approximately 117,000 rooms, of which 57% were international and 67% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $402 million in the second quarter of 2014, a 7% increase over the second quarter of 2013.  In constant currency and excluding the impact of acquisitions, revenues were up 3%.

Exchange revenues were $168 million, flat compared with the second quarter of 2013, as a 1.7% increase in average number of members was offset by a 1.8% decline in exchange revenue per member.

Vacation rental revenues were $217 million, a 13% increase over the second quarter of 2013.  Excluding the impact of foreign currency and acquisitions, vacation rental revenues were up 6%, reflecting a 4.9% increase in transaction volume and a 1.2% increase in the average net price per vacation rental.  

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 2% increase compared with the second quarter of 2013.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $673 million in the second quarter of 2014, a 7% increase over the second quarter of 2013, primarily reflecting higher gross VOI sales and a lower loan loss provision. 

Gross VOI sales were $496 million in the second quarter of 2014, an increase of 3% over the second quarter of 2013, reflecting a 1.1% increase in volume per guest, a 1.0% increase in tour flow and increased tele-sales upgrades. 

Adjusted EBITDA for the second quarter of 2014 was $185 million, a 15% increase compared with the second quarter of 2013, primarily reflecting the revenue increases.

OTHER ITEMS

  • The Company repurchased 2.3 million shares of common stock for $170 million during the second quarter of 2014.  From July 1 through July 23, 2014, the Company repurchased an additional 0.5 million shares for $37 million.  The Company's remaining share repurchase authorization totals $311 million as of July 23, 2014.
  • Reported net interest expense in the second quarter of 2014 was $26 million, compared with $32 million in the second quarter of 2013, reflecting lower rates associated with a fixed-for-floating rate swap and a $2 million benefit from a value added tax adjustment. 

BALANCE SHEET INFORMATION AS OF JUNE 30, 2014:

  • Cash and cash equivalents of $247 million, compared with $194 million at December 31, 2013
  • Vacation ownership contract receivables, net, of $2.7 billion, compared with $2.8 billion at December 31, 2013
  • Vacation ownership and other inventory of $1.0 billion, unchanged from December 31, 2013
  • Securitized vacation ownership debt of $1.9 billion, unchanged from December 31, 2013
  • Long-term debt of $2.8 billion, compared with $2.9 billion at December 31, 2013. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of June 30, 2014, compared with $1.3 billion as of December 31, 2013

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

OUTLOOK

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

For the full year 2014, the Company provides the following guidance:

  • Revenues of approximately $5.250 - $5.350 billion (unchanged)
  • Adjusted EBITDA of approximately $1.230 - $1.245 billion up from $1.215 - $1.240 billion
  • Adjusted EPS of approximately $4.34 - $4.44 based on a diluted share count of 128 million up from $4.23 - $4.33 based on a diluted share count of 130 million

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Thursday, July 24, 2014 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 on the website for approximately 90 days beginning at noon EDT on July 24, 2014. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on July 24, 2014, at 888-296-6944.

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

PRESENTATION OF FINANCIAL INFORMATION

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items.  These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing core operating performance.  Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring.  A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release.  It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time.  Any such items could be significant to the Company's reported results.

ABOUT WYNDHAM WORLDWIDE CORPORATION

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with approximately 7,500 franchised hotels and 650,200 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world's largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 107,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 200 vacation ownership resorts serving approximately 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 associates globally. For more information, please visit www.wyndhamworldwide.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements.  Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  The forward-looking statements contained in this press release include statements related to the Company's revenues, earnings 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 14, 2014.  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, 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, 2014 and 2013:



















Three Months Ended June 30,





2014


2013





 Net Revenues


 EBITDA


 Net Revenues


 EBITDA



Lodging

$

283


$

87


$

262


$

78



Vacation Exchange and Rentals


402



89



376



85



Vacation Ownership


673



185



630



161



     Total Reportable Segments


1,358



361



1,268



324



Corporate and Other (a)


(15)



(35)



(15)



(27)



     Total Company

$

1,343


$

326


$

1,253


$

297


















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders























Three Months Ended June 30,








2014





2013



EBITDA




$

326





$

297



Depreciation and amortization





59






54



Interest expense





29






34



Interest income





(3)






(2)



Income before income taxes





241






211



Provision for income taxes





88






78



Net income attributable to Wyndham shareholders




$

153





$

133


















__________













(a)     Includes the elimination of transactions between segments. 

















The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):




















Three Months Ended June 30,





2014


2013





 Net Revenues


 Adjusted
EBITDA


 Net Revenues


 Adjusted
EBITDA



Lodging

$

283


$

87


$

262


$

78



Vacation Exchange and Rentals


402



87



376



85



Vacation Ownership


673



185



630



161



     Total Reportable Segments


1,358



359



1,268



324



Corporate and Other


(15)



(35)



(15)



(27)



     Total Company

$

1,343


$

324


$

1,253


$

297































































 

 














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, 2014 and 2013:



















Six Months Ended June 30,





2014


2013





 Net Revenues


 EBITDA


 Net Revenues


 EBITDA



Lodging

$

520


$

151


$

485


$

137



Vacation Exchange and Rentals


781



174



750



179



Vacation Ownership


1,266



300



1,179



272



     Total Reportable Segments


2,567



625



2,414



588



Corporate and Other (a)


(31)



(69)



(27)



(57)



     Total Company

$

2,536


$

556


$

2,387


$

531


















Reconciliation of EBITDA to Net income attributable to Wyndham shareholders























Six Months Ended June 30,








2014





2013



EBITDA




$

556





$

531



Depreciation and amortization





115






106



Interest expense





56






66



Early extinguishment of debt





-






111



Interest income





(5)






(4)



Income before income taxes





390






252



Provision for income taxes





146






92



Net income





244






160



Net income attributable to noncontrolling interest





(1)






-



Net income attributable to Wyndham shareholders




$

243





$

160


















__________














(a)    Includes the elimination of transactions between segments. 





The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the six months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):




















Six Months Ended June 30,





2014


2013





 Net Revenues


 Adjusted
EBITDA


 Net Revenues


 Adjusted
EBITDA



Lodging

$

520


$

155


$

485


$

137



Vacation Exchange and Rentals


781



182



750



179



Vacation Ownership


1,266



300



1,179



274



     Total Reportable Segments


2,567



637



2,414



590



Corporate and Other


(31)



(69)



(27)



(57)



     Total Company

$

2,536


$

568


$

2,387


$

533
















































 

 














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,




2014


2013


2014


2013

Net revenues














Service and membership fees


$

616


$

583


$

1,205


$

1,152


Vacation ownership interest sales



382



347



685



611


Franchise fees



166



152



293



274


Consumer financing



106



106



211



211


Other



73



65



142



139

Net revenues



1,343



1,253



2,536



2,387















Expenses














Operating



572



548



1,106



1,056


Cost of vacation ownership interests



42



32



81



64


Consumer financing interest



17



20



35



40


Marketing and reservation



206



181



387



357


General and administrative



181



177



376



342


Depreciation and amortization



59



54



115



106

Total expenses



1,077



1,012



2,100



1,965















Operating income



266



241



436



422

Other income, net



(1)



(2)



(5)



(3)

Interest expense



29



34



56



66

Early extinguishment of debt



-



-



-



111

Interest income



(3)



(2)



(5)



(4)















Income before income taxes



241



211



390



252

Provision for income taxes



88



78



146



92

Net income



153



133



244



160

Net income attributable to noncontrolling interest


-



-



(1)



-

Net income attributable to Wyndham shareholders

$

153


$

133


$

243


$

160















Earnings per share














Basic


$

1.21


$

0.99


$

1.91


$

1.18


Diluted



1.20



0.98



1.89



1.17















Weighted average shares outstanding














Basic



127



135



127



136


Diluted



128



136



129



137

__________



























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










 

 


Table 3











(1 of 2)

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













Number of Rooms 

2014


646,900


650,200


 N/A


 N/A


 N/A






2013


631,800


635,100


638,300


645,400


 N/A






2012


609,300


608,300


618,100


627,400


 N/A






2011


609,600


612,900


611,200


613,100


 N/A


















RevPAR

2014

$

32.30

$

40.11


 N/A


 N/A


 N/A






2013

$

31.05

$

38.00

$

41.78

$

33.07

$

36.00






2012

$

29.73

$

37.23

$

40.39

$

31.86

$

34.80






2011

$

27.71

$

35.38

$

39.49

$

30.65

$

33.34

















Vacation Exchange and Rentals













Average Number of Members (in 000s)

2014


3,727


3,748


 N/A


 N/A


 N/A






2013


3,668


3,686


3,711


3,728


3,698






2012


3,684


3,670


3,672


3,670


3,674






2011


3,766


3,755


3,744


3,734


3,750


















Exchange Revenue Per Member

2014

$

200.78

$

179.17


 N/A


 N/A


 N/A






2013

$

210.96

$

182.42

$

169.95

$

161.21

$

181.02






2012

$

204.56

$

177.07

$

171.14

$

165.86

$

179.68






2011

$

205.64

$

178.46

$

172.38

$

161.68

$

179.59


















Vacation Rental Transactions (in 000s) (a)

2014


429


376


 N/A


 N/A


 N/A






2013


423


355


433


273


1,483






2012


418


325


390


259


1,392






2011


398


328


370


250


1,347


















Average Net Price Per Vacation Rental (a)

2014

$

410.04

$

577.13


 N/A


 N/A


 N/A






2013

$

392.64

$

540.38

$

677.81

$

506.62

$

532.11






2012

$

379.40

$

524.40

$

635.44

$

484.69

$

504.55






2011

$

377.71

$

549.09

$

701.81

$

497.04

$

530.78

















Vacation Ownership (a)













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

2014

$

410,000

$

496,000


 N/A


 N/A


 N/A






2013

$

384,000

$

481,000

$

536,000

$

488,000

$

1,889,000






2012

$

384,000

$

460,000

$

502,000

$

435,000

$

1,781,000






2011

$

319,000

$

412,000

$

455,000

$

409,000

$

1,595,000


















Tours (in 000s) (c)

2014


170


208


 N/A


 N/A


 N/A






2013


163


206


225


195


789






2012


148


186


207


183


724






2011


137


177


197


173


685


















Volume Per Guest (VPG) (c)

2014

$

2,272

$

2,280


 N/A


 N/A


 N/A






2013

$

2,211

$

2,256

$

2,278

$

2,370

$

2,281






2012

$

2,414

$

2,361

$

2,315

$

2,225

$

2,324






2011

$

2,192

$

2,227

$

2,197

$

2,296

$

2,229

















Note:

Full year amounts may not add across due to rounding.

(a)

Includes the impact of acquisitions from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

(b)

Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time beginning in the second quarter of 2012 (see Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).

(c)

Includes the impact of WAAM Just-in-Time related tours beginning in the second quarter of 2012.


















































ADDITIONAL DATA






































Year


Q1


Q2


Q3


Q4


Full Year

Lodging













Number of Properties

2014


7,500


7,540


 N/A


 N/A


 N/A






2013


7,380


7,410


7,440


7,490


 N/A






2012


7,150


7,170


7,260


7,340


 N/A






2011


7,190


7,220


7,190


7,210


 N/A

















Vacation Ownership













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

2014

$

60,000

$

70,000


 N/A


 N/A


 N/A






2013

$

84,000

$

90,000

$

102,000

$

73,000

$

349,000






2012

$

96,000

$

100,000

$

124,000

$

89,000

$

409,000






2011

$

79,000

$

80,000

$

96,000

$

83,000

$

339,000

















Note:

Full year amounts may not add across due to rounding.

(*)

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.

















 

 
















Table 3

















(2 of 2)



















Wyndham Worldwide Corporation


OPERATING STATISTICS




GLOSSARY OF TERMS



















Lodging

































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




















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



















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



















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




















Vacation Exchange and Rentals
































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





















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




















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




















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




















Vacation Ownership

































Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM sales, before the net effect of percentage-of-completion accounting and loan loss provisions.  See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales.




















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



















Volume per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  The Company has excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2011-2014. 





















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)




















































2014


2013





 Q1


 Q2


 Q3


 Q4


 Year



 Q1


 Q2


 Q3


 Q4


 Year

Lodging
























Royalties and Franchise Fees


$

68


$         88


 N/A


 N/A


 N/A


$

64

$

79

$

91

$

75

$

309


Marketing, Reservation and Wyndham Rewards Revenues (a)


76


101


 N/A


 N/A


 N/A



73


92


118


83


365


Hotel Management Reimbursable Revenues (b)


37


39


 N/A


 N/A


 N/A



25


38


37


35


135


Intersegment Trademark Fees



9


11


 N/A


 N/A


 N/A



8


10


11


10


39


Owned Hotel Revenues



24


20


 N/A


 N/A


 N/A



26


20


18


19


84


Ancillary Revenues (c)



23


24


 N/A


 N/A


 N/A



26


23


22


23


95


Total Lodging



237


283


 N/A


 N/A


 N/A



222


262


297


245


1,027

























Vacation Exchange and Rentals
























Exchange Revenues



187


168


 N/A


 N/A


 N/A



193


168


158


150


669


Rental Revenues



176


217


 N/A


 N/A


 N/A



166


192


293


138


789


Ancillary Revenues (d)



16


17


 N/A


 N/A


 N/A



15


16


19


17


68


Total Vacation Exchange and Rentals


379


402


 N/A


 N/A


 N/A



374


376


470


305


1,526

























Vacation Ownership
























Vacation Ownership Interest Sales


303


382


 N/A


 N/A


 N/A



263


347


384


384


1,379


Consumer Financing



105


106


 N/A


 N/A


 N/A



105


106


107


108


426


Property Management Fees



143


145


 N/A


 N/A


 N/A



146


141


143


137


567


WAAM Fee-for-Service Commissions


33


30


 N/A


 N/A


 N/A



24


30


33


20


107


Ancillary Revenues (e)



9


10


 N/A


 N/A


 N/A



11


6


10


9


36


Total Vacation Ownership



593


673


 N/A


 N/A


 N/A



549


630


677


658


2,515

Total Reportable Segments


$

1,209


$   1,358


 N/A


 N/A


 N/A


$

1,145

$

1,268

$

1,444

$

1,208

$

5,068




















































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


Intersegment Trademark Fees (f)



8


9


9


8


34



1


2


3


4


10


Owned Hotel Revenues



8


8


7


18


41



-


-


-


5


5


Ancillary Revenues (c)



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 (d)



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 Fee-for-Service Commissions


12


11


4


6


33



10


11


23


21


65


Ancillary Revenues (e)



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

















































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






















(a)

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

(b)

Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During both Q1 and Q2 2014, reimbursable revenues of $2 million, which eliminate in consolidation, were charged to the Company's vacation ownership business. During Q2, Q3 and Q4 2013, such amounts were $1 million, $3 million and $2 million, respectively.

(c)

Primarily includes additional services provided to franchisees.

(d)

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

(e)

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

(f)

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

 

 





















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)















































June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
 2013





















Securitized vacation ownership debt (a)















Term notes

$

1,600


$

1,823


$

1,648


$

1,615


$

1,569

Bank conduit facility (b)


291



156



262



273



289

Total securitized vacation ownership debt (c)


1,891



1,979



1,910



1,888



1,858

Less: Current portion of securitized vacation ownership debt


187



192



184



186



217

Long-term securitized vacation ownership debt

$

1,704


$

1,787


$

1,726


$

1,702


$

1,641









































Debt:















Revolving credit facility (due July 2018) (d)

$

16


$

10


$

23


$

74


$

41

Commercial paper (e)





107



184



210



164



168

$315 million 6.00% senior unsecured notes (due December 2016)(f)


318



318



318



318



319

$300 million 2.95% senior unsecured notes (due March 2017)


299



299



298



298



298

$14 million 5.75% senior unsecured notes (due February 2018)


14



14



14



14



14

$450 million 2.50% senior unsecured notes (due March 2018)


448



447



447



447



447

$40 million 7.375% senior unsecured notes (due March 2020)


40



40



40



40



40

$250 million 5.625% senior unsecured notes (due March 2021)


246



246



246



246



246

$650 million 4.25% senior unsecured notes (due March 2022) (g)


646



645



643



644



644

$400 million 3.90% senior unsecured notes (due March 2023) (h)


403



395



387



396



397

Capital leases


186



188



191



185



184

Other


99



100



114



117



133

Total long-term debt


2,822



2,886



2,931



2,943



2,931

Less: Current portion of long-term debt


50



52



49



55



52

Long-term debt

$

2,772


$

2,834


$

2,882


$

2,888


$

2,879

__________

(a)

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

(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2015 and borrowing capacity of $650 million. As of June 30, 2014, this facility had a remaining borrowing capacity of $359 million.

(c)

This debt is collateralized by $2,287 million, $2,328 million, $2,314 million, $2,306 million and $2,414 million of underlying vacation ownership contract receivables and related assets as of June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively.

(d)

Represents a $1.5 billion revolving credit facility that expires in July 2018. As of June 30, 2014, the Company had $9 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $107 million, the remaining borrowing capacity was $1.4 billion as of June 30, 2014.

(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.1 billion, as of June 30, 2014.

(f)

Includes unamortized gains from the settlement of a derivative in the amount of $3 million as of June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013 and $4 million as of June 30, 2013.

(g)

Includes a $2 million increase and $2 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

(h)

Includes a $5 million increase and $10 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

 

 







Table 6







(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Three Months Ended June 30, 2014

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

178

39,816

66.7%

$117.57

$78.43








TRYP by Wyndham

117

16,740

66.9%

$96.01

$64.19








Wingate by Wyndham

158

14,436

68.7%

$88.24

$60.65








Hawthorn Suites by Wyndham

98

9,737

68.1%

$77.37

$52.72








Ramada

829

114,195

57.2%

$79.00

$45.15








Baymont

346

28,325

56.9%

$66.36

$37.78








Days Inn

1,807

146,139

55.8%

$64.86

$36.20








Super 8

2,436

155,711

60.0%

$50.77

$30.46








Howard Johnson

439

46,214

50.4%

$62.88

$31.68








Travelodge

425

31,075

54.3%

$67.35

$36.60








Microtel Inns & Suites by Wyndham

318

22,744

63.8%

$67.26

$42.88








Knights Inn

383

23,472

46.4%

$46.78

$21.70








Dream

5

989

72.9%

$246.03

$179.38








Night

3

630

72.8%

$158.86

$115.62









Total Lodging

7,542

650,223

58.0%

$69.13

$40.11








Vacation Ownership






Wyndham Vacation Ownership resorts

201

23,450

N/A

N/A

N/A









Total Wyndham Worldwide

7,743

673,673




















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




_______________






NOTE: A glossary of terms is included in Table 3 (2 of 2); 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, 2014

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

178

39,816

61.1%

$115.42

$70.55








TRYP by Wyndham

117

16,740

59.2%

$91.64

$54.22








Wingate by Wyndham

158

14,436

63.9%

$85.95

$54.93








Hawthorn Suites by Wyndham

98

9,737

64.7%

$76.76

$49.66








Ramada

829

114,195

53.7%

$79.22

$42.52








Baymont

346

28,325

52.0%

$64.25

$33.40








Days Inn

1,807

146,139

50.2%

$63.56

$31.92








Super 8

2,436

155,711

55.8%

$49.63

$27.69








Howard Johnson

439

46,214

47.0%

$62.41

$29.32








Travelodge

425

31,075

49.5%

$64.82

$32.08








Microtel Inns & Suites by Wyndham

318

22,744

58.8%

$65.08

$38.24








Knights Inn

383

23,472

43.6%

$45.50

$19.84








Dream

5

989

73.4%

$217.94

$159.91








Night

3

630

66.3%

$139.04

$92.20









Total Lodging

7,542

650,223

53.5%

$67.78

$36.23








Vacation Ownership






Wyndham Vacation Ownership resorts

201

23,450

N/A

N/A

N/A









Total Wyndham Worldwide

7,743

673,673




















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




_______________






NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

 

 




















Table 7



















(1 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)







































Three months ended March 31, 2014


Net Revenues


Reported
EBITDA


Executive
Departure
Costs


Venezuela
Currency
Devaluation (b)


    VAT    Adjustment (c)

Adjusted
EBITDA

Lodging


$

237


$

64


$

4


$

-


$

-

$

68

Vacation Exchange and Rentals



379



85



-



10



-


95

Vacation Ownership



593



115



-



-



-


115

Total Reportable Segments



1,209



264



4



10



-


278

Corporate and Other (a)



(16)



(34)



-



-



-


(34)

Total Company


$

1,193


$

230


$

4


$

10


$

-

$

244




















Three months ended June 30, 2014


















Lodging


$

283


$

87


$

-


$

-


$

-

$

87

Vacation Exchange and Rentals



402



89



-



-



(2)


87

Vacation Ownership



673



185



-



-



-


185

Total Reportable Segments



1,358



361



-



-



(2)


359

Corporate and Other (a)



(15)



(35)



-



-



-


(35)

Total Company


$

1,343


$

326


$

-


$

-


$

(2)

$

324

________________

(a)

Includes the elimination of transactions between segments.

(b)

Represents the devaluation of the official exchange rate of Venezuela.

(c)

Reversal of a reserve for value-added taxes.

 

 



















Table 7


















(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)





































Three months ended March 31, 2013


Net Revenues


Reported
EBITDA

Legacy
Adjustments (b)

Acquisition
Costs (c)

Restructuring
Costs (d)

Asset
Impairment (e)

Adjusted
EBITDA

Lodging


$

222


$

58

$

-

$

-

$

-

$

-

$

58

Vacation Exchange and Rentals



374



94


-


-


-


-


94

Vacation Ownership



549



111


-


2


-


-


113

Total Reportable Segments



1,145



263


-


2


-


-


265

Corporate and Other (a)



(12)



(29)


-


-


-


-


(29)

Total Company


$

1,133


$

234

$

-

$

2

$

-

$

-

$

236



















Three months ended June 30, 2013

















Lodging


$

262


$

78

$

-

$

-

$

-

$

-

$

78

Vacation Exchange and Rentals



376



85


-


-


-


-


85

Vacation Ownership



630



161


-


-


-


-


161

Total Reportable Segments



1,268



324


-


-


-


-


324

Corporate and Other (a)



(15)



(27)


-


-


-


-


(27)

Total Company


$

1,253


$

297

$

-

$

-

$

-

$

-

$

297



















Three months ended September 30, 2013
















Lodging


$

297


$

95

$

-

$

-

$

-

$

-

$

95

Vacation Exchange and Rentals



470



141


-


-


-


-


141

Vacation Ownership



677



176


-


-


-


-


176

Total Reportable Segments



1,444



412


-


-


-


-


412

Corporate and Other (a)



(17)



(33)


(1)


-


-


-


(34)

Total Company


$

1,427


$

379

$

(1)

$

-

$

-

$

-

$

378



















Three months ended December 31, 2013
















Lodging


$

245


$

47

$

-

$

-

$

9

$

8

$

64

Vacation Exchange and Rentals



305



36


-


-


-


-


36

Vacation Ownership



658



172


-


-


-


-


172

Total Reportable Segments



1,208



255


-


-


9


8


272

Corporate and Other (a)



(13)



(33)


-


-


-


-


(33)

Total Company


$

1,195


$

222

$

-

$

-

$

9

$

8

$

239



















Twelve months ended December 31, 2013
















Lodging


$

1,027


$

279

$

-

$

-

$

9

$

8

$

296

Vacation Exchange and Rentals



1,526



356


-


-


-


-


356

Vacation Ownership



2,515



619


-


2


-


-


621

Total Reportable Segments



5,068



1,254


-


2


9


8


1,273

Corporate and Other (a)



(59)



(122)


1


-


-


-


(121)

Total Company


$

5,009


$

1,132

$

1

$

2

$

9

$

8

$

1,152

________________

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

(a)

Includes the elimination of transactions between segments.

(b)

Relates to a net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.

(c)

Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013).

(d)

Relates to costs incurred as a result of an organizational realignment initiative.

(e)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark.

 

 















Table 8














(1 of 3)















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)


















Three Months Ended June 30, 2014


















 As Reported


    Legacy    Adjustments


    VAT
Adjustment (b)


As Adjusted
non-GAAP

Net revenues














Service and membership fees


$

616


$



$



$

616


Vacation ownership interest sales



382









382


Franchise fees



166









166


Consumer financing



106









106


Other



73









73

Net revenues



1,343



-



-



1,343















Expenses














Operating



572









572


Cost of vacation ownership interests



42









42


Consumer financing interest



17









17


Marketing and reservation



206









206


General and administrative



181






2



183


Depreciation and amortization



59









59

Total expenses



1,077



-



2



1,079















Operating income



266



-



(2)



264

Other income, net



(1)









(1)

Interest expense



29






2



31

Interest income



(3)









(3)















Income before income taxes



241



-



(4)



237

Provision for income taxes



88



1

(a)


(2)

(c)


87

Net income attributable to Wyndham shareholders


$

153


$

(1)


$

(2)


$

150















Earnings per share














Basic


$

1.21


$

-


$

(0.02)


$

1.18


Diluted



1.20



-



(0.02)



1.17















Weighted average shares outstanding














Basic



127



127



127



127


Diluted



128



128



128



128

__________













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 reversal of a state tax accrual.




(b)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

(c)

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)
























Six Months Ended June 30, 2014












































 As Reported


Executive
Departure
Costs (a)


Venezuela
Currency  
Devaluation (c)


Legacy    Adjustments


    VAT
    Adjustment  (e)


As Adjusted
non-GAAP

Net revenues




















Service and membership fees


$

1,205


$



$



$



$



$

1,205


Vacation ownership interest sales



685















685


Franchise fees



293















293


Consumer financing



211















211


Other



142















142

Net revenues



2,536



-



-



-



-



2,536





















Expenses




















Operating



1,106






(10)









1,096


Cost of vacation ownership interests



81















81


Consumer financing interest



35















35


Marketing and reservation



387















387


General and administrative



376



(4)









2



374


Depreciation and amortization



115















115

Total expenses



2,100



(4)



(10)



-



2



2,088





















Operating income



436



4



10



-



(2)



448

Other income, net



(5)















(5)

Interest expense



56












2



58

Interest income



(5)















(5)





















Income before income taxes



390



4



10



-



(4)



400

Provision for income taxes



146



1

(b)


1

(b)


1

(d)


(2)

(b)


147





















Net income



244



3



9



(1)



(2)



253

Net income attributable to noncontrolling interest



(1)



-



-



-



-



(1)





















Net income attributable to Wyndham shareholders


$

243


$

3


$

9


$

(1)


$

(2)


$

252





















Earnings per share




















Basic


$

1.91


$

0.02


$

0.07


$

-



$                   (0.02)


$

1.98


Diluted



1.89



0.02



0.07



-



(0.02)



1.96





















Weighted average shares outstanding




















Basic



127



127



127



127



127



127


Diluted



129



129



129



129



129



129

__________



















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)

Related to costs associated with an executive's departure at the Company's lodging business.

(b)

Relates to the tax effect of the adjustment.

(c)

Represents the devaluation of the official exchange rate of Venezuela at the Company's vacation exchange and rental business.

(d)

Relates to the reversal of a state tax accrual.

(e)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

 

















Table 8

















(3 of 3)


















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





















Six Months Ended June 30, 2013






































 As Reported


Legacy
Adjustments


Acquisition
Costs


Early
Extinguishment
of Debt


As Adjusted
non-GAAP

Net revenues

















Service fees and membership


$

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


$

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 the costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013) at the Company's vacation ownership business.

(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 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)













FREE CASH FLOW












We define free cash flow to be net cash provided by operating activities less property and equipment additions which we also refer to as capital expenditures.

 

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, 







2014



2013

















Net cash provided by operating activities


$

793



$

758





Less: Property and equipment additions



(98)




(104)





Free cash flow


$

695



$

654





























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












2014


Q1

Q2

Q3

Q4

Full Year













Gross VOI sales (a)


$

410

$

496


 N/A 


 N/A 


 N/A 

Less: Sales under WAAM Fee-for-Service



(44)


(40)


 N/A 


 N/A 


 N/A 

Gross VOI sales, net of WAAM Fee-for-Service sales



366


456


 N/A 


 N/A 


 N/A 

Less: Loan loss provision



(60)


(70)


 N/A 


 N/A 


 N/A 

Less: Impact of percentage-of-completion accounting



(3)


(4)


 N/A 


 N/A 


 N/A 

Vacation ownership interest sales (a)


$

303

$

382


 N/A 


 N/A 


 N/A 













2013
























Gross VOI sales (a)


$

384

$

481

$

536

$

488

$

1,889

Less: Sales under WAAM Fee-for-Service



(36)


(44)


(51)


(29)


(160)

Gross VOI sales, net of WAAM Fee-for-Service sales



347


437


486


459


1,729

Less: Loan loss provision



(84)


(90)


(102)


(73)


(349)

Less: Impact of percentage of completion accounting



-


-


-


(1)


(1)

Vacation ownership interest sales (a)


$

263

$

347

$

384

$

384

$

1,379













2012
























Gross VOI sales (a)


$

384

$

460

$

502

$

435

$

1,781

Less: Sales under WAAM Fee-for-Service



(17)


(18)


(5)


(10)


(49)

Gross VOI sales, net of WAAM Fee-for-Service 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 Fee-for-Service



(18)


(19)


(38)


(31)


(106)

Gross VOI sales, net of WAAM Fee-for-Service 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

_____________












Note:  Amounts may not add due to rounding.












(a)  Includes VOI sales under WAAM Just-in-Time 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













2014


$

25

$

21


 N/A 


 N/A 


 N/A 

2013


$

24

$

18

$

22

$

25

$

89

2012


$

27

$

20

$

22

$

28

$

97

2011


$

18

$

18

$

21

$

11

$

68

 

 

SOURCE Wyndham Worldwide Corporation



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