2014

Wyndham Worldwide Reports Third Quarter 2012 Earnings Third Quarter Adjusted EPS Up 20% Year-Over-Year

Provides Preliminary 2013 Outlook

PARSIPPANY, N.J., Oct. 24, 2012 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended September 30, 2012. 

Highlights:

  • Third quarter adjusted diluted earnings per share (EPS) was $1.13, compared with $0.94 in the third quarter of 2011, an increase of 20%.  Third quarter 2012 reported diluted EPS was $1.11, compared with $1.08 from the same period in 2011, which included a $22 million benefit from adjustments.
  • Third quarter adjusted net income increased 6% compared with the third quarter of 2011. A stronger US dollar had an adverse effect on net income and EPS.  In constant currency, third quarter adjusted net income increased 9% and adjusted EPS increased 24% compared with the third quarter of 2011.
  • During the quarter, the Company repurchased 2.6 million shares of its common stock for $133 million.

"The third quarter was highlighted by exceptional performance from our Hotel Group," said Stephen P. Holmes, chairman and CEO.  "Our timeshare business delivered another quarter of solid performance and I'm pleased with the ability of our exchange and rentals group to mitigate the impact of economic headwinds in Europe.  Our share repurchase program continues to reduce our share count and contribute to strong adjusted EPS growth." 

THIRD QUARTER 2012 OPERATING RESULTS

Third quarter revenues were $1.3 billion, an increase of 4% from the prior year period.  The increase reflected growth in the Lodging and Vacation Ownership businesses, partially offset by unfavorable currency effects in the Vacation Exchange and Rentals business.

For the third quarter of 2012, adjusted net income was $162 million, or $1.13 per diluted share, compared with $153 million, or $0.94 per diluted share for the same period in 2011.  The increase in adjusted net income primarily reflected stronger operating results in the Lodging and Vacation Ownership businesses.  EPS also benefited from the Company's share repurchase program, which decreased weighted average share count by 11%.

Reported net income for the third quarter of 2012 was $159 million, or $1.11 per diluted share, compared with net income of $175 million, or $1.08 per diluted share, for the third quarter of 2011.  Reported net income included several items not included in adjusted net income.  The third quarter of 2012 included $3 million of acquisition costs, legacy adjustments and debt transaction fees.  The third quarter of 2011 included a $22 million benefit from adjustments.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $682 million for the nine months ended September 30, 2012, compared to $703 million for the same period in 2011.  Excluding a $67 million benefit from a refund of value added taxes and related interest income received in 2011, free cash flow increased by 7%.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures and development advances.  For the nine months ended September 30, 2012, net cash provided by operating activities was $808 million, compared with $860 million in the prior year period, which included the benefit from the refund of value added taxes and related interest income.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $249 million in the third quarter of 2012, an increase of 12% compared with the third quarter of 2011.  The increase primarily reflected RevPAR gains, revenues associated with the Wyndham Grand hotel in Orlando, which opened at the beginning of the fourth quarter of 2011, and higher intersegment licensing fees for use of the Wyndham brand trade name. 

EBITDA was $86 million, an increase of 28% compared with the third quarter of 2011, reflecting the revenue increases. 

Domestic RevPAR increased 5% compared with the third quarter of 2011.  Total system-wide RevPAR increased 2%, or 3% in constant currency.

As of September 30, 2012, the Company's hotel system consisted of nearly 7,260 properties and approximately 618,100 rooms.  The development pipeline included approximately 950 hotels and 108,300 rooms, of which 55% were new construction and 47% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $420 million in the third quarter of 2012, compared to $436 million in the third quarter of 2011.  In constant currency and excluding the impact of acquisitions, revenues were flat.

Exchange revenues were $157 million, a decrease of 2% compared with the third quarter of 2011.  In constant currency, exchange revenues were flat, as a 2% decline in the average number of members was offset by a 1% increase in exchange revenue per member.  The decline in the average number of members was due to the non-renewal of an affiliation agreement at the beginning of 2012.

Vacation rental revenues were $248 million, a 5% decrease compared with the third quarter of 2011.  In constant currency and excluding acquisitions, vacation rental revenues were flat, reflecting a 3% increase in transaction volume offset by a 2% decrease in the average net price per vacation rental.

Adjusted EBITDA for the third quarter of 2012 was $123 million, down 9% compared with the prior-year period.  Adjusted EBITDA was flat excluding the impact of acquisitions and the net effect of foreign currency.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $608 million in the third quarter of 2012, a 9% increase over the third quarter of 2011, primarily reflecting increased vacation ownership interest (VOI) sales. 

Gross VOI sales were $502 million in the third quarter of 2012, up 10% from the third quarter of 2011, primarily reflecting a 5% increase in both volume per guest and tour flow.

Adjusted EBITDA for the third quarter of 2012 was $155 million, a 4% increase compared with the third quarter of 2011.  The increase primarily reflects the revenue increases, partially offset by higher sales and marketing expenses related to the increase in VOI sales and higher intersegment licensing fees for use of the Wyndham brand trade name.

Other Items

  • The Company repurchased 2.6 million shares of common stock for $133 million during the third quarter of 2012.  From October 1 through October 23, 2012, the Company repurchased an additional 915,000 shares for $49 million.  The Company has $608 million remaining on its current share repurchase authorization.
  • Net interest expense in the third quarter of 2012 was $30 million, compared to $15 million in the third quarter of 2011, which included $16 million of interest income associated with a refund of value added taxes.

  Balance Sheet Information as of September 30, 2012:

  • Cash and cash equivalents of approximately $230 million, compared with $142 million at December 31, 2011
  • Vacation ownership contract receivables, net, of $2.9 billion, compared with $2.8 billion at December 31, 2011
  • Vacation ownership and other inventory of approximately $1.1 billion, unchanged from December 31, 2011
  • Securitized vacation ownership debt of $1.9 billion, unchanged from December 31, 2011
  • Long-term debt of $2.5 billion, compared with $2.2 billion at December 31, 2011. The remaining borrowing capacity on the revolving credit facility was $720 million as of September 30, 2012, compared with $771 million as of December 31, 2011

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

Outlook

For the full year 2012, the Company:

  • Revises Revenues to $4.5$4.6 billion from $4.425 - $4.6 billion
  • Revises Adjusted EBITDA guidance to $1.045 - $1.055 billion from $1.040$1.055 billion
  • Revises Adjusted EPS Guidance to $3.15 - $3.20 from $3.10 - $3.20
  • Reduces diluted shares to 146 million from 147 million

The Company's preliminary guidance for the full-year 2013 is as follows:

  • Revenues of approximately $4.9 - $5.05 billion
  • Adjusted EBITDA of approximately $1.125 - $1.150 billion
  • Adjusted EPS of approximately $3.50 - $3.60 based on a diluted share count of 143 million.

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

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, October 24, 2012 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EDT on October 24, 2012. The conference call may also be accessed by dialing (888) 942-9868 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on October 24, 2012, at (866) 395-9153.

Presentation of Financial Information

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

About Wyndham Worldwide Corporation

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality products and services through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with approximately 7,260 franchised hotels and 618,100 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 approximately 100,000 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 over 180 vacation ownership resorts serving more than 915,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 27,800 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 Quarterly Report on Form 10-Q, filed with the SEC on July 25, 2012.  Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 







Table 1







(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)





















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

 

The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income attributable to Wyndham shareholders for the three months ended September 30, 2012 and 2011:








Three Months Ended September 30,




2012


2011




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$                     249


$               86


$                     222


$                     67


Vacation Exchange and Rentals

420


123


436


131

 (e) 

Vacation Ownership

608


154

 (b) 

559


149


     Total Reportable Segments

1,277


363


1,217


347


Corporate and Other (a)

(12)


(30)

 (c) 

(5)


(18)

 (c) 

     Total Company

$                  1,265


$             333


$                  1,212


$                   329












Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders











EBITDA



$             333




$                   329


Depreciation and amortization



45




43


Interest expense



32




34


Early extinguishment of debt



2

 (d) 



-


Interest income



(2)




(19)

 (f) 

Income before income taxes



256




271


Provision for income taxes



97




96


Net income



159




175


Net loss attributable to noncontrolling interest



-




-


Net income attributable to Wyndham shareholders



$             159




$                   175












__________









(a)

Includes the elimination of transactions between segments.  

(b)

Includes $1 million of costs incurred in connection with the Company's acquisition of Shell Vacations during September 2012.

(c)

Includes $1 million of a net expense and $8 million of a net benefit during the three months ended September 30, 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(d)

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

(e)

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

(f)

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



The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended September 30, 2012 and 2011 (for a description of adjustments by segment, see Table 7):




Three Months Ended September 30, 




2012


2011






Adjusted




Adjusted




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$                     249


$               86


$                     222


$                     67


Vacation Exchange and Rentals

420


123


436


135


Vacation Ownership

608


155


559


149


     Total Reportable Segments

1,277


364


1,217


351


Corporate and Other

(12)


(29)


(5)


(26)


     Total Company

$                  1,265


$             335


$                  1,212


$                   325












 







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 nine months ended September 30, 2012 and 2011:













Nine Months Ended September 30, 




2012


2011




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$                     667


$                   210

 (b) 

$                     561


$                   160

 (g) 

Vacation Exchange and Rentals

1,129


300

 (c) 

1,152


330

 (h) 

Vacation Ownership

1,679


407

 (d) 

1,550


376

 (i) 

     Total Reportable Segments

3,475


917


3,263


866


Corporate and Other (a)

(35)


(76)

 (e) 

(10)


(57)

 (e) 

     Total Company

$                  3,440


$                   841


$                  3,253


$                   809












Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders











EBITDA



$                   841




$                   809


Depreciation and amortization



136




133


Interest expense



98




103

 (j) 

Early extinguishment of debt



108

 (f) 



12

 (k) 

Interest income



(7)




(22)

 (l) 

Income before income taxes



506




583


Provision for income taxes



187




222


Net income



319




361


Net loss attributable to noncontrolling interest



1




-


Net income attributable to Wyndham shareholders



$                   320




$                   361












__________









(a)

Includes the elimination of transactions between segments.  

(b)

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

(c)

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

(d)

Includes $1 million of costs incurred in connection with the Company's acquisition of Shell Vacations during September 2012.

(e)

Includes $3 million and $16 million of a net benefit during the nine months ended September 30, 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(f)

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

(g)

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

(h)

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

(i)

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

(j)

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

(k)

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

(l)

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



The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the nine months ended September 30, 2012 and 2011 (for a description of adjustments by segment, see Table 7):




Nine Months Ended September 30, 




2012


2011






Adjusted




Adjusted




 Net Revenues 


 EBITDA 


 Net Revenues 


 EBITDA 


Lodging

$                     667


$                   209


$                     561


$                   173


Vacation Exchange and Rentals

1,129


298


1,152


310


Vacation Ownership

1,679


408


1,550


375


     Total Reportable Segments

3,475


915


3,263


858


Corporate and Other

(35)


(79)


(10)


(73)


     Total Company

$                  3,440


$                   836


$                  3,253


$                   785












 








Table 2

Wyndham Worldwide Corporation


CONSOLIDATED STATEMENTS OF INCOME


(In millions, except per share data)



























 Three Months Ended 


 Nine Months Ended 





 September 30, 


 September 30, 





2012


2011


2012


2011


Net revenues











Service and membership fees


$          566


$          584


$       1,558


$       1,579



Vacation ownership interest sales


373


320


987


855



Franchise fees


168


160


449


395



Consumer financing


106


105


311


310



Other


52


43


135


114


Net revenues


1,265


1,212


3,440


3,253













Expenses











Operating


495

(b)

490

(d)

1,389

(b)

1,358

(d)


Cost of vacation ownership interests 


45


35


115


115



Consumer financing interest


23


21


69


67



Marketing and reservation


197


182


554


472



General and administrative(a)


172


157


481


422

(i)


Asset impairments


-


-


-


13

(j)


Restructuring


-


-


-


6

(k)


Depreciation and amortization


45


43


136


133


Total expenses


977


928


2,744


2,586













Operating income


288


284


696


667


Other income, net


-


(2)


(9)

(g) (h)

(9)

(l)

Interest expense


32


34


98


103

(m)

Early extinguishment of debt


2

(c)

-


108

(c)

12

(n)

Interest income


(2)


(19)

(e)

(7)


(22)

(e)












Income before income taxes


256


271


506


583


Provision for income taxes


97


96

(f)

187


222

(f)












Net income


159


175


319


361


Net loss attributable to noncontrolling interest


-


-


1


-













Net income attributable to Wyndham shareholders


$          159


$          175


$          320


$          361













Earnings per share











Basic


$         1.13


$         1.10


$         2.20


$         2.17



Diluted


1.11


1.08


2.16


2.12













Weighted average shares outstanding











Basic


141


159


145


166



Diluted


144


162


148


170


__________










(a)

Includes $1 million of a net expense and $8 million of a net benefit during the three months ended September 30, 2012 and 2011, respectively, and $3 million and $12 million of a net benefit during the nine months ended September 30, 2012 and 2011, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.


(b)

Includes $1 million of costs incurred in connection with the Company's acquisition of Shell Vacations (September 2012).


(c)

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. 


(d)

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


(e)

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


(f)

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


(g)

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


(h)

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


(i)

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


(j)

Represents a non-cash impairment charge related to a write-down of an international joint venture.


(k)

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


(l)

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


(m)

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


(n)

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


 








Table 3








(1 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS



























Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Rooms 

2012

609,300

608,300

618,100

 N/A 

 N/A 



2011

609,600

612,900

611,200

613,100

 N/A 



2010

593,300

606,800

605,700

612,700

 N/A 



2009

588,500

590,200

590,900

597,700

 N/A 










RevPAR

2012

$               29.73

$               37.23

$               40.39

 N/A 

 N/A 



2011

$               27.71

$               35.38

$               39.49

$                    30.65

$               33.34



2010

$               25.81

$               32.25

$               37.14

$                    29.18

$               31.14



2009

$               27.69

$               32.38

$               34.81

$                    26.47

$               30.34









Vacation Exchange and Rentals








Average Number of Members (in 000s)

2012

3,684

3,670

3,672

 N/A 

 N/A 



2011

3,766

3,755

3,744

3,734

3,750



2010

3,746

3,741

3,766

3,759

3,753



2009

3,789

3,795

3,781

3,765

3,782










Exchange Revenue Per Member

2012

$             204.56

$             177.07

$             171.14

 N/A 

 N/A 



2011

$             205.64

$             178.46

$             172.38

$                  161.68

$             179.59



2010

$             201.93

$             172.20

$             173.44

$                  162.59

$             177.53



2009

$             194.83

$             174.22

$             173.90

$                  163.89

$             176.73










Vacation Rental Transactions (in 000s) (b)

2012

418

325

390

 N/A 

 N/A 



2011

398

328

370

250

1,347



2010

291

297

322

253

1,163



2009

273

231

264

196

964










Average Net Price Per Vacation Rental (b)

2012

$             379.40

$             524.40

$             635.44

 N/A 

 N/A 



2011

$             377.71

$             549.09

$             701.81

$                  497.04

$             530.78



2010

$             361.17

$             387.01

$             500.31

$                  449.12

$             425.38



2009

$             353.15

$             471.74

$             594.34

$                  499.66

$             477.38









Vacation Ownership (c)








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

2012

$           384,000

$           460,000

$           502,000

 N/A 

 N/A 



2011

$           319,000

$           412,000

$           455,000

$                409,000

$        1,595,000



2010

$           308,000

$           371,000

$           412,000

$                373,000

$        1,464,000



2009

$           280,000

$           327,000

$           366,000

$                343,000

$        1,315,000










Tours (e)

2012

148,000

186,000

207,000

 N/A 

 N/A 



2011

137,000

177,000

197,000

173,000

685,000



2010

123,000

163,000

187,000

160,000

634,000



2009

137,000

164,000

173,000

142,000

617,000










Volume Per Guest (VPG) (e)

2012

$               2,414

$               2,361

$               2,315

 N/A 

 N/A 



2011

$               2,192

$               2,227

$               2,197

$                    2,296

$               2,229



2010

$               2,334

$               2,156

$               2,081

$                    2,214

$               2,183



2009

$               1,866

$               1,854

$               1,944

$                    2,210

$               1,964









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

(a)

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

(b)

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


(c)

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


(d)

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


(e)

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

 








Table 3








(2 of 3)









Wyndham Worldwide Corporation

ADDITIONAL DATA



















Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Properties

2012

7,150

7,170

7,260

 N/A 

 N/A 



2011

7,190

7,220

7,190

7,210

 N/A 



2010

7,090

7,160

7,150

7,210

 N/A 



2009

6,990

7,020

7,040

7,110

 N/A 









Vacation Ownership








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

2012

$             96,000

$           100,000

$           124,000

N/A

 N/A 



2011

$             79,000

$             80,000

$             96,000

$                  83,000

$           339,000



2010

$             86,000

$             87,000

$             85,000

$                  82,000

$           340,000



2009

$           107,000

$           122,000

$           117,000

$                103,000

$           449,000










Sales under WAAM 1.0 (in 000s) (c) 

2012

$             17,000

$             18,000

$               5,000

 N/A 

 N/A 



2011

$             18,000

$             19,000

$             38,000

$                  31,000

$           106,000



2010

$               5,000

$             13,000

$             20,000

$                  14,000

$             51,000










WAAM 1.0 Commission Revenues (in 000s)

2012

$             12,000

$             11,000

$               4,000

 N/A 

 N/A 



2011

$             10,000

$             11,000

$             23,000

$                  21,000

$             65,000



2010

$               3,000

$               8,000

$             12,000

$                    9,000

$             31,000










Sales under WAAM 2.0 (in 000s) (d) 

2012

$                    -

$             12,000

$             57,000

 N/A 

 N/A 

















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

(a)

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

(b)

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


(c)

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



(d)

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



 

Table 3

(3 of 3)


Wyndham Worldwide Corporation

OPERATING STATISTICS


GLOSSARY OF TERMS


Lodging


Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, or company owned, (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided 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 in connection with customers booking their vacation rental stays through us. One rental transaction is recorded for each standard one-week rental.


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


Vacation Ownership


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


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


Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2009-2012.  We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business' tour selling efforts during a given reporting period.


General


Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods.

 

 











Table 4















Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)
































2012


2011




 Q1 

 Q2 

 Q3 

 Q4 

 Year 


 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Lodging













Royalties and Franchise Fees

$             62

$             80

88

 N/A 

 N/A 


$             58

$             75

$             85

$             66

$           284


Marketing, Reservation and Wyndham Rewards Revenues (a)

68

99

98

 N/A 

 N/A 


54

75

94

76

299


Hotel Management Reimbursable Revenues (b)

21

22

25

 N/A 

 N/A 


19

19

21

20

79


Inter-segment Trademark Fees (c)

8

9

9

 N/A 

 N/A 


1

2

3

4

10


Owned Hotel Revenues

8

8

7

 N/A 

 N/A 


-

-

-

5

5


Ancillary Revenues (d)

18

15

22

 N/A 

 N/A 


17

19

19

17

72


Total Lodging

185

233

249

 N/A 

 N/A 


149

190

222

188

749















Vacation Exchange and Rentals













Exchange Revenues

188

162

157

 N/A 

 N/A 


194

168

161

150

673


Rental Revenues

159

170

248

 N/A 

 N/A 


150

180

260

125

715


Ancillary Revenues (e)


14

16

15

 N/A 

 N/A 


12

13

15

16

56


Total Vacation Exchange and Rentals

361

348

420

 N/A 

 N/A 


356

361

436

291

1,444















Vacation Ownership














Vacation Ownership Interest Sales

271

342

373

 N/A 

 N/A 


222

313

320

295

1,150


Consumer Financing


103

102

106

 N/A 

 N/A 


102

103

105

105

415


Property Management Fees


110

108

117

 N/A 

 N/A 


110

108

105

101

424


WAAM 1.0 Commissions


12

11

4

 N/A 

 N/A 


10

11

23

21

65


Ancillary Revenues (f)


5

7

8

 N/A 

 N/A 


6

6

6

5

23


Total Vacation Ownership


501

570

608

 N/A 

 N/A 


450

541

559

527

2,077

Total Reportable Segments


$      1,047

$      1,151

$      1,277

 N/A 

 N/A 


$          955

$      1,092

$      1,217

$      1,006

$      4,270
































2010


2009




 Q1 

 Q2 

 Q3 

 Q4 

 Year 


 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Lodging














Royalties and Franchise Fees


$             52

$             69

$             82

$             62

$           265


$             57

$             68

$             72

$             57

$           254


Marketing, Reservation and Wyndham Rewards Revenues (a)

50

65

76

60

251


54

66

73

53

246


Hotel Management Reimbursable Revenues (b)

21

20

18

18

77


22

23

21

19

85


Ancillary Revenues (d)


21

24

27

23

95


21

17

17

20

75


Total Lodging


144

178

203

163

688


154

174

183

149

660















Vacation Exchange and Rentals














Exchange Revenues


189

161

163

153

666


185

165

164

154

668


Rental Revenues


105

115

161

114

495


96

109

157

98

460


Ancillary Revenues (e)


6

5

6

15

32


6

6

6

6

24


Total Vacation Exchange and Rentals

300

281

330

282

1,193


287

280

327

258

1,152















Vacation Ownership














Vacation Ownership Interest Sales

217

271

308

276

1,072


239

242

285

287

1,053


Consumer Financing


105

106

107

107

425


109

109

108

109

435


Property Management Fees


100

100

104

101

405


91

94

96

95

376


WAAM 1.0 Commissions (g)


3

8

12

8

31


-

-

-

-

-


Ancillary Revenues (f)


19

20

2

5

46


23

22

19

17

81


Total Vacation Ownership


444

505

533

497

1,979


462

467

508

508

1,945

Total Reportable Segments


$          888

$          964

$      1,066

$          942

$      3,860


$          903

$          921

$      1,018

$          915

$      3,757





























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

(a)

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


(b)

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

(c)

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

(d)

Primarily includes additional services provided to franchisees.

(e)

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

(f)

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

(g)

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

 

 














Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)








































September 30, 2012


June 30, 2012


March 31, 2012


December 31, 2011


September 30, 2011

















Securitized vacation ownership debt (a)











Term notes


$           1,702


$          1,634


$            1,896


$                 1,625


$           1,512

Bank conduit facility (b)


220


220


104


237


218

Securitized vacation ownership debt (c)


1,922


1,854


2,000


1,862


1,730

Less: Current portion of securitized vacation ownership debt


206


191


206


196


179

Long-term securitized vacation ownership debt


$           1,716


$          1,663


$            1,794


$                 1,666


$           1,551

















Debt:











Revolving credit facility (due July 2016) (d)


$              270


$               81


$                 47


$                    218


$              169

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


-


-


44


36


27

9.875% senior unsecured notes (due May 2014)


42


42


42


243


243

6.00% senior unsecured notes (due December 2016)


361


362


362


811


812

2.95% senior unsecured notes (due March 2017)


298


298


298


-


-

5.75% senior unsecured notes (due February 2018)


248


248


247


247


247

7.375% senior unsecured notes (due March 2020)


248


248


248


247


247

5.625% senior unsecured notes (due March 2021)


246


245


245


245


245

4.25% senior unsecured notes (due March 2022)


644


644


643


-


-

Vacation rentals capital leases


104


95


103


102


108

Other


68


3


1


4


1

Total debt


2,529


2,266


2,280


2,153


2,099

Less: Current portion of debt


64


11


54


46


37

Long-term debt


$           2,465


$          2,255


$            2,226


$                 2,107


$           2,062

__________















(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 September 30, 2012, this facility had remaining borrowing capacity of $430 million.

(c)

This debt is collateralized by $2,517 million, $2,490 million, $2,622 million, $2,638 million and $2,502 million of underlying vacation ownership contract receivables and related assets as of September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively.

(d)

Represents a $1.0 billion revolving credit facility that expires on July 15, 2016.  As of September 30, 2012, the Company had $10 million of outstanding letters of credit and a remaining borrowing capacity of $720 million.  

(e)

Represents convertible notes issued by the Company during May 2009 and repaid by the Company during May 2012.

 

 






Table 6






(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Three Months Ended September 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

109

27,473

61.8%

$107.95

$66.69








TRYP by Wyndham

90

12,955

68.0%

$94.63

$64.38








Wingate by Wyndham

163

14,981

65.5%

$85.56

$56.00








Hawthorn Suites by Wyndham

94

9,272

65.6%

$73.49

$48.24








Ramada 

843

114,227

57.1%

$80.14

$45.72








Baymont

257

21,642

57.2%

$66.12

$37.79








Days Inn 

1,832

147,224

55.3%

$66.81

$36.91








Super 8 

2,312

147,054

62.6%

$56.59

$35.44








Howard Johnson 

445

45,072

52.4%

$65.91

$34.55








Travelodge 

438

32,225

56.5%

$72.92

$41.17








Microtel Inns & Suites by Wyndham

309

22,085

61.1%

$65.51

$40.06








Knights Inn 

358

22,468

45.7%

$46.47

$21.22








Dream

5

990

71.1%

$210.71

$149.86








Night

2

422

43.4%

$111.74

$48.49









Total Lodging

7,257

618,090

58.1%

$69.53

$40.39








Vacation Ownership






Wyndham Vacation Ownership resorts

184

23,152

N/A

N/A

N/A









Total Wyndham Worldwide

7,441

641,242




















As of and For the Three Months Ended September 30, 2011

Brand

Number of Properties

Number of Rooms

Average
Occupancy Rate

Average Daily
Rate (ADR)

Average Revenue
Per Available
Room (RevPAR)








Lodging






Wyndham Hotels and Resorts

98

26,548

62.3%

$106.49

$66.34








TRYP by Wyndham

93

13,456

67.0%

$102.53

$68.73








Wingate by Wyndham

166

15,234

64.7%

$83.02

$53.68








Hawthorn Suites by Wyndham

74

7,047

66.7%

$75.65

$50.48








Ramada