2014

Wyndham Worldwide Reports Third Quarter 2013 Earnings Third Quarter Adjusted EPS Up 25% Year-Over-Year

Raises Full Year EPS Guidance

Provides Preliminary 2014 Outlook

PARSIPPANY, N.J., Oct. 23, 2013 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended September 30, 2013. 

Highlights:

  • Third quarter adjusted diluted earnings per share (EPS) was $1.41, an increase of 25% from adjusted diluted EPS of $1.13 in the third quarter of 2012. Reported diluted EPS was $1.40 in the third quarter of 2013, compared with $1.11 during the same period in 2012.
  • Adjusted net income increased 15% from the prior-year period.
  • During the quarter, the Company repurchased 2.7 million shares of its common stock for $160 million.

"Results for the quarter were excellent, with adjusted EPS growth of 25% and strong performance in each of our business units," said Stephen P. Holmes, chairman and CEO.  "Wyndham Hotel Group continues to expand its international footprint, Wyndham Exchange & Rentals is benefiting from recent innovations, and Wyndham Vacation Ownership continues to transform the business to an asset-light model.  Overall, we have great momentum across the company, which when combined with our disciplined capital allocation strategy, will continue to create value for shareholders."

THIRD QUARTER 2013 OPERATING RESULTS
Third quarter revenues were $1.4 billion, an increase of 13% from the prior year period.  Adjusted net income was $187 million, or $1.41 per diluted share, compared with $162 million, or $1.13 per diluted share for the same period in 2012.  The increases in revenues and adjusted net income reflect stronger operating results across all of the Company's businesses.  EPS also benefited from the Company's share repurchase program, which decreased weighted average diluted share count by 7% year-over-year.

Reported net income for the third quarter of 2013 was $187 million, or $1.40 per diluted share, compared with $159 million, or $1.11 per diluted share, for the third quarter of 2012.  Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $705 million for the nine months ended September 30, 2013, compared with $685 million for the same period in 2012, a 3% increase.  The growth of free cash flow largely reflects stronger operating performance partially offset by higher capital expenditures.  The Company defines free cash flow as net cash provided by operating activities less capital expenditures.  For the nine months ended September 30, 2013, net cash provided by operating activities was $858 million, compared with $808 million in the prior year period. 

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)
Revenues were $297 million in the third quarter of 2013, a 19% increase over the third quarter of 2012.  The increase reflects higher revenues from owned hotels, hotel franchise fees and management reimbursable fees as well as incremental global conference fees. 

Domestic RevPAR increased 5.2% compared with the third quarter of 2012.  Total system-wide RevPAR increased 3.4%, reflecting proportionally higher growth of lower RevPAR hotels in China. 

EBITDA for the third quarter of 2013 was $95 million, a 10% increase compared with the third quarter of 2012.  The increase was primarily due to higher RevPAR and the favorable timing of marketing expenditures.

As of September 30, 2013, the Company's hotel system consisted of approximately 7,440 properties and over 638,300 rooms, a 3.3% room increase compared with the third quarter of 2012.  The development pipeline included over 900 hotels and approximately 114,000 rooms, of which 60% were international and 66% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $470 million in the third quarter of 2013, a 12% increase over the third quarter of 2012.  In constant currency and excluding the impact of acquisitions, revenues increased 7%.

Exchange revenues were $158 million, flat compared with the third quarter of 2012.  In constant currency, exchange revenues were up 1%, as the average number of members increased 1.0% and exchange revenue per member increased 0.4%.

Vacation rental revenues were $293 million, an 18% increase compared with the third quarter of 2012.  In constant currency and excluding acquisitions, vacation rental revenues were up 10%, reflecting a 6.7% increase in the average net price per vacation rental and a 3.1% increase in transaction volume.  Results benefited from an improved pricing strategy and increased rental unit supply in Europe.

EBITDA for the third quarter of 2013 was $141 million, a 15% increase over the third quarter of 2012.  Excluding the impact of acquisitions and foreign currency, EBITDA increased 6%.

Vacation Ownership (Wyndham Vacation Ownership) 
Revenues were $677 million in the third quarter of 2013, an 11% increase over the third quarter of 2012. Excluding the impact of the Shell Vacations Club acquisition, revenues increased 6%, primarily reflecting higher gross VOI sales. 

Gross VOI sales were $536 million in the third quarter of 2013, an increase of 7% over the third quarter of 2012, primarily reflecting an 8.7% increase in tour flow offset by a 1.6% decrease in volume per guest.  Excluding Shell Vacations Club, volume per guest was flat.

Adjusted EBITDA for the third quarter of 2013 was $176 million, a 14% increase compared with the third quarter of 2012.  Excluding the impact of the Shell Vacations Club acquisition, adjusted EBITDA increased 8%, primarily due to the revenue increases and a lower loan loss provision. 

Other Items

  • The Company repurchased 2.7 million shares of common stock for $160 million during the third quarter of 2013.  From October 1 through October 22, 2013, the Company repurchased an additional 0.8 million shares for $50 million.  The Company's remaining share repurchase authorization totals $732 million as of October 22, 2013.
  • Net interest expense in the third quarter of 2013 was $29 million, compared with $30 million in the third quarter of 2012, as lower rates associated with recent financings offset higher debt levels.

Balance Sheet Information as of September 30, 2013:

  • Cash and cash equivalents of $269 million, compared with $195 million at December 31, 2012
  • Vacation ownership contract receivables, net, of $2.8 billion, compared with $2.9 billion at December 31, 2012
  • Vacation ownership and other inventory of $1.0 billion, compared with $1.1 billion at December 31, 2012
  • Securitized vacation ownership debt of $1.9 billion, compared with $2.0 billion at December 31, 2012
  • Long-term debt of $2.9 billion, compared with $2.6 billion at December 31, 2012. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of September 30, 2013, compared with $0.6 billion as of December 31, 2012

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

Outlook

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

For the full year 2013, the Company expects:

  • Revenues of approximately $4.925 - $5.100 billion
  • Adjusted EBITDA of approximately $1.140 - $1.165 billion
  • Adjusted EPS of approximately $3.78 - $3.80 based on a diluted share count of 135 million, from $3.66 - $3.76 based on a diluted share count of 136 million

The Company's preliminary guidance for the full-year 2014 is as follows:

  • Revenues of approximately $5.250 - $5.350 billion
  • Adjusted EBITDA of approximately $1.215 - $1.240 billion
  • Adjusted EPS of approximately $4.12 - $4.22 based on a diluted share count of 133 million.

Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, October 23, 2013 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors/.   An archive of this webcast will be available at the website for approximately 90 days beginning at noon EDT on October 23, 2013. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on October 23, 2013, at 866-454-2130.

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 products and services through its global portfolio of world-renowned brands.  The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with over 7,440 franchised hotels and over 638,300 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world's largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 106,000 vacation properties in 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of 190 vacation ownership resorts serving approximately 915,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,500 associates globally. For more information, please visit www.wyndhamworldwide.com.

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

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 15, 2013.  Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 






Table 1

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, 2013 and 2012:










Three Months Ended September 30,




2013


2012




 Net Revenues


 EBITDA


 Net Revenues


 EBITDA


Lodging

$                    297


$                     95


$                    249


$                      86


Vacation Exchange and Rentals

470


141


420


123


Vacation Ownership

677


176


608


154

 (c)

     Total Reportable Segments

1,444


412


1,277


363


Corporate and Other (a)

(17)


(33)

(b)

(12)


(30)

 (b)

     Total Company

$                 1,427


$                   379


$                 1,265


$                    333












Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders




















Three Months Ended September 30,






2013




2012


EBITDA



$                   379




$                    333


Depreciation and amortization



54




45


Interest expense



31




32


Early extinguishment of debt



-




2

 (d)

Interest income



(2)




(2)


Income before income taxes



296




256


Provision for income taxes



109




97


Net income attributable to Wyndham shareholders



$                   187




$                    159












__________









(a)

Includes the elimination of transactions between segments. 

(b)

 

 

Includes $1 million of a net benefit and $1 million of a net expense during the three months ended September 30, 2013 and 2012, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(c)

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

(d)

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









The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended September 30, 2013 and 2012 (for a description of adjustments by segment, see Table 7):













Three Months Ended September 30,




2013


2012






Adjusted




Adjusted




Net Revenues


 EBITDA


 Net Revenues


 EBITDA


Lodging

$                    297


$                     95


$                    249


$                      86


Vacation Exchange and Rentals

470


141


420


123


Vacation Ownership

677


176


608


155


     Total Reportable Segments

1,444


412


1,277


364


Corporate and Other

(17)


(34)


(12)


(29)


     Total Company

$                 1,427


$                   378


$                 1,265


$                    335












 

 

















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, 2013 and 2012:











Nine Months Ended September 30,



2013


2012



 Net Revenues


 EBITDA


 Net Revenues


 EBITDA


Lodging

$                     782


$                   232


$                     667


$                   210

 (e)

Vacation Exchange and Rentals

1,220


320


1,129


300

 (f)

Vacation Ownership

1,856


447

 (b)

1,679


407

 (g)

     Total Reportable Segments

3,858


999


3,475


917


Corporate and Other (a)

(44)


(89)

 (c)

(35)


(76)

 (c)

     Total Company

$                  3,814


$                   910


$                  3,440


$                   841











Reconciliation of EBITDA to Net Income Attributable to Wyndham shareholders


















Nine Months Ended September 30,





2013




2012


EBITDA



$                   910




$                   841


Depreciation and amortization



160




136


Interest expense



97




98


Early extinguishment of debt



111

 (d)



108

 (h)

Interest income



(6)




(7)


Income before income taxes



548




506


Provision for income taxes



201




187


Net income



347




319


Net (income)/loss attributable to noncontrolling interest



(1)




1


Net income attributable to Wyndham shareholders



$                   346




$                   320











__________









(a)    Includes the elimination of transactions between segments. 

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

(c)    Includes $1 million of a net expense and $3 million of a net benefit during the nine months ended September 30, 2013

        and 2012, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting

        from our separation from Cendant.

(d)    Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior

        unsecured notes and the remaining portion of its 9.875% senior unsecured notes.

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

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

(g)    Includes $1 million of costs incurred in connection with the Company's acquisition of Shell Vacations during

        September 2012.

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

        unsecured notes.



The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the nine months ended September 30, 2013 and 2012 (for a description of adjustments by segment, see Table 7):











Nine Months Ended September 30,



2013


2012





Adjusted




Adjusted



 Net Revenues


EBITDA


Net Revenues


EBITDA


Lodging

$                     782


$                   232


$                     667


$                   209


Vacation Exchange and Rentals

1,220


320


1,129


298


Vacation Ownership

1,856


449


1,679


408


     Total Reportable Segments

3,858


1,001


3,475


915


Corporate and Other

(44)


(88)


(35)


(79)


     Total Company

$                  3,814


$                   913


$                  3,440


$                   836











 

 





























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, 














2013


2012


2013


2012












Net revenues





















Service and membership fees


$          680


$          566


$       1,833


$       1,558













Vacation ownership interest sales


384


373


995


987













Franchise fees


186


168


460


449













Consumer financing


107


106


318


311













Other


70


52


208


135












Net revenues


1,427


1,265


3,814


3,440
































Expenses





















Operating


589


495

(b)

1,645

(d)

1,389

(b)












Cost of vacation ownership interests 


43


45


107


115













Consumer financing interest


19


23


60


69













Marketing and reservation


213


197


570


554













General and administrative(a)


186


172


528


481













Depreciation and amortization


54


45


160


136












Total expenses


1,104


977


3,070


2,744
































Operating income


323


288


744


696












Other income, net


(2)


-


(6)


(9)

(f)











Interest expense


31


32


97


98












Early extinguishment of debt


-


2

(c)

111

(e)

108

(c)











Interest income


(2)


(2)


(6)


(7)
































Income before income taxes


296


256


548


506












Provision for income taxes


109


97


201


187
































Net income


187


159


347


319












Net (income)/loss attributable to noncontrolling interest


-


-


(1)


1
































Net income attributable to Wyndham shareholders


$          187


$          159


$          346


$          320
































Earnings per share





















Basic


$         1.42


$         1.13


$         2.58


$         2.20













Diluted


1.40


1.11


2.55


2.16
































Weighted average shares outstanding





















Basic


131


141


134


145













Diluted


133


144


136


148












__________




















(a)

Includes $1 million of a net benefit and $1 million of a net expense during the three months ended September 30, 2013 and 2012, respectively, and $1 million of a net expense and $3 million of a net benefit during the nine months ended September 30, 2013 and 2012, 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 during September 2012.












(c)

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












(d)

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












(e)

Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior unsecured notes and the remaining portion of its 9.875% senior unsecured notes.












(f)

Includes a $2 million benefit related to the reversal of an allowance associated with a previously divested asset at the Company's vacation exchange and rentals business and a $1 million benefit from the recovery of a previously recorded impairment charge at the Company's lodging business.
































 

 

























Table 3












(1 of 3)


Wyndham Worldwide Corporation


OPERATING STATISTICS














The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:



















Year

Q1

Q2

Q3

Q4

Full Year


Lodging (a)









Number of Rooms

2013

631,800

635,100

638,300

 N/A

 N/A







2012

609,300

608,300

618,100

627,400

 N/A







2011

609,600

612,900

611,200

613,100

 N/A







2010

593,300

606,800

605,700

612,700

 N/A















RevPAR

2013

$               31.05

$               38.00

$               41.78

 N/A

 N/A







2012

$               29.73

$               37.23

$               40.39

$               31.86

$               34.80







2011

$               27.71

$               35.38

$               39.49

$               30.65

$               33.34







2010

$               25.81

$               32.25

$               37.14

$               29.18

$               31.14














Vacation Exchange and Rentals









Average Number of Members (in 000s)

2013

3,668

3,686

3,711

 N/A

 N/A







2012

3,684

3,670

3,672

3,670

3,674







2011

3,766

3,755

3,744

3,734

3,750







2010

3,746

3,741

3,766

3,759

3,753















Exchange Revenue Per Member

2013

$             210.96

$             182.42

$             169.95

 N/A

 N/A







2012

$             204.56

$             177.07

$             171.14

$             165.86

$             179.68







2011

$             205.64

$             178.46

$             172.38

$             161.68

$             179.59







2010

$             201.93

$             172.20

$             173.44

$             162.59

$             177.53















Vacation Rental Transactions (in 000s) (b)

2013

423

355

433

 N/A

 N/A







2012

418

325

390

259

1,392







2011

398

328

370

250

1,347







2010

291

297

322

253

1,163















Average Net Price Per Vacation Rental (b)

2013

$             392.64

$             540.38

$             677.81

 N/A

 N/A







2012

$             379.40

$             524.40

$             635.44

$             484.69

$             504.55







2011

$             377.71

$             549.09

$             701.81

$             497.04

$             530.78







2010

$             361.17

$             387.01

$             500.31

$             449.12

$             425.38














Vacation Ownership (c)









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

2013

$           384,000

$           481,000

$           536,000

 N/A

 N/A







2012

$           384,000

$           460,000

$           502,000

$           435,000

$        1,781,000







2011

$           319,000

$           412,000

$           455,000

$           409,000

$        1,595,000







2010

$           308,000

$           371,000

$           412,000

$           373,000

$        1,464,000















Tours (e)

2013

163,000

206,000

225,000

 N/A

 N/A







2012

148,000

186,000

207,000

183,000

724,000







2011

137,000

177,000

197,000

173,000

685,000







2010

123,000

163,000

187,000

160,000

634,000















Volume Per Guest (VPG) (e)

2013

$               2,211

$               2,256

$               2,278

 N/A

 N/A







2012

$               2,414

$               2,361

$               2,315

$               2,225

$               2,324







2011

$               2,192

$               2,227

$               2,197

$               2,296

$               2,229







2010

$               2,334

$               2,156

$               2,081

$               2,214

$               2,183














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









(a)

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




(b)

Includes the impact of the acquisitions of Hoseasons (March 2010), ResortQuest (September 2010), James Villa Holidays (November 2010), Smoky Mountain Property Management Group (August 2012), Oceana Resorts (December 2012) and four other acquisitions (Q3 2011, Q4 2012 and Q1 2013) from their acquisition dates forward.  Therefore, the operating statistics are not presented on a comparable basis.

 

 






(c)

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






(d)

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






(e)

Includes the impact of WAAM 2.0 related tours beginning in the second quarter of 2012.
























Table 3












(2 of 3)














Wyndham Worldwide Corporation


ADDITIONAL DATA































Year

Q1

Q2

Q3

Q4

Full Year


Lodging (a)









Number of Properties

2013

7,380

7,410

7,440

 N/A

 N/A







2012

7,150

7,170

7,260

7,340

 N/A







2011

7,190

7,220

7,190

7,210

 N/A







2010

7,090

7,160

7,150

7,210

 N/A














Vacation Ownership









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

2013

$             84,000

$             90,000

$           102,000

 N/A

 N/A







2012

$             96,000

$           100,000

$           124,000

$             89,000

$           409,000







2011

$             79,000

$             80,000

$             96,000

$             83,000

$           339,000







2010

$             86,000

$             87,000

$             85,000

$             82,000

$           340,000















Sales under WAAM 1.0 (in 000s) (c)

2013

$             36,000

$             44,000

$             51,000

 N/A

 N/A







2012

$             17,000

$             18,000

$               5,000

$             10,000

$             49,000







2011

$             18,000

$             19,000

$             38,000

$             31,000

$           106,000







2010

$               5,000

$             13,000

$             20,000

$             14,000

$             51,000















WAAM 1.0 Commission Revenues (in 000s)

2013

$             24,000

$             30,000

$             33,000

 N/A

 N/A







2012

$             12,000

$             11,000

$               4,000

$               6,000

$             33,000







2011

$             10,000

$             11,000

$             23,000

$             21,000

$             65,000







2010

$               3,000

$               8,000

$             12,000

$               9,000

$             31,000















Sales under WAAM 2.0 (in 000s) (d)

2013

$             13,000

$               1,000

$                       -

 N/A

 N/A







2012

$                       -

$             12,000

$             57,000

$             30,000

$             99,000














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









(a)

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


(b)

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




(c)

Represents gross VOI sales under the Company's WAAM 1.0 for which the Company earns commission revenue (WAAM 1.0 Commission Revenues).  The commission revenue earned on these sales is included in service fees and membership revenues on the Consolidated Statements of Income.




(d)

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








































Table 3












(3 of 3)














Wyndham Worldwide Corporation


OPERATING STATISTICS




GLOSSARY OF TERMS














Lodging























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















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














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














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















Vacation Exchange and Rentals






















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
















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















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















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















Vacation Ownership























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















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














Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.  We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel.  See Table 9 for a detail of tele-sales upgrades for 2010-2013. 













General























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














 

 




























Table 4















Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)
































2013


2012




 Q1 

 Q2 

 Q3 

 Q4 

 Year 


 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Lodging














Royalties and Franchise Fees


$             64

$               79

$              91

 N/A 

 N/A 


$               62

$             80

$                88

$             71

$           301


Marketing, Reservation and Wyndham Rewards Revenues (a)

73

92

118

 N/A 

 N/A 


68

99

98

80

345


Hotel Management Reimbursable Revenues (b)

25

38

37

 N/A 

 N/A 


21

22

25

23

91


Inter-segment Trademark Fees


8

10

11

 N/A 

 N/A 


8

9

9

8

34


Owned Hotel Revenues


26

20

18

 N/A 

 N/A 


8

8

7

18

41


Ancillary Revenues (c)


26

23

22

 N/A 

 N/A 


18

15

22

23

78


Total Lodging


222

262

297

 N/A 

 N/A 


185

233

249

223

890















Vacation Exchange and Rentals














Exchange Revenues


193

168

158

 N/A 

 N/A 


188

162

157

153

660


Rental Revenues


166

192

293

 N/A 

 N/A 


159

170

248

125

702


Ancillary Revenues (d)


15

16

19

 N/A 

 N/A 


14

16

15

15

60


Total Vacation Exchange and Rentals

374

376

470

 N/A 

 N/A 


361

348

420

293

1,422















Vacation Ownership














Vacation Ownership Interest Sales

263

347

384

 N/A 

 N/A 


271

342

373

337

1,323


Consumer Financing


105

106

107

 N/A 

 N/A 


103

102

106

110

421


Property Management Fees


146

141

143

 N/A 

 N/A 


110

108

117

125

460


WAAM 1.0 Commissions


24

30

33

 N/A 

 N/A 


12

11

4

6

33


Ancillary Revenues (e)


11

6

10

 N/A 

 N/A 


5

7

8

12

32


Total Vacation Ownership


549

630

677

 N/A 

 N/A 


501

570

608

590

2,269

Total Reportable Segments


$      1,145

$        1,268

$        1,444

 N/A 

 N/A 


$         1,047

$      1,151

$         1,277

$      1,106

$      4,581
































2011


2010




 Q1 

 Q2 

 Q3 

 Q4 

 Year 


 Q1 

 Q2 

 Q3 

 Q4 

 Year 

Lodging














Royalties and Franchise Fees


$             58

$               75

$              85

$             66

$           284


$               52

$             69

$                82

$             62

$           265


Marketing, Reservation and Wyndham Rewards Revenues (a)   

54

75

94

76

299


50

65

76

60

251


Hotel Management Reimbursable Revenues (b)

19

19

21

20

79


21

20

18

18

77


Inter-segment Trademark Fees (f)


1

2

3

4

10


-

-

-

-

-


Owned Hotel Revenues


-

-

-

5

5


-

-

-

-

-


Ancillary Revenues (c)


17

19

19

17

72


21

24

27

23

95


Total Lodging


149

190

222

188

749


144

178

203

163

688















Vacation Exchange and Rentals














Exchange Revenues


194

168

161

150

673


189

161

163

153

666


Rental Revenues


150

180

260

125

715


105

115

161

114

495


Ancillary Revenues (d)


12

13

15

16

56


6

5

6

15

32


Total Vacation Exchange and Rentals

356

361

436

291

1,444


300

281

330

282

1,193















Vacation Ownership














Vacation Ownership Interest Sales

222

313

320

295

1,150


217

271

308

276

1,072


Consumer Financing


102

103

105

105

415


105

106

107

107

425


Property Management Fees


110

108

105

101

424


100

100

104

101

405


WAAM 1.0 Commissions


10

11

23

21

65


3

8

12

8

31


Ancillary Revenues (e)


6

6

6

5

23


19

20

2

5

46


Total Vacation Ownership


450

541

559

527

2,077


444

505

533

497

1,979

Total Reportable Segments


$          955

$        1,092

$        1,217

$      1,006

$      4,270


$            888

$          964

$         1,066

$          942

$      3,860





























(a)

 

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

(b)

 

Primarily represents payroll costs in our hotel management business that we pay on behalf of property owners and for which we are reimbursed by the property owners. During Q2 and Q3 2013, $1 million and $3 million, respectively, of reimbursable revenues, which eliminate in consolidation, were charged to our vacation ownership business.

(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 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.















 

 






























Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)





































September 30,

2013


June 30,
 
2013


March 31,
 
2013


December 31,

2012


September 30,

2012
















Securitized vacation ownership debt (a)











Term notes


$            1,615


$            1,569


$            1,869


$            1,770


$            1,702

Bank conduit facility (b)


273


289


125


190


220

Securitized vacation ownership debt (c)


1,888


1,858


1,994


1,960


1,922

Less: Current portion of securitized vacation ownership debt


186


217


228


218


206

Long-term securitized vacation ownership debt


$            1,702


$            1,641


$            1,766


$            1,742


$            1,716
















Debt:











Revolving credit facility (due July 2018) (d)


$                 74


$                 41


$                 34


$                 85


$               270

Commercial paper(e)


164


168


202


273


-

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


-


-


-


42


42

6.00% senior unsecured notes (due December 2016)


318


319


319


361


361

2.95% senior unsecured notes (due March 2017)


298


298


298


298


298

5.75% senior unsecured notes (due February 2018)


14


14


14


248


248

2.50% senior unsecured notes (due March 2018)


447


447


447


-


-

7.375% senior unsecured notes (due March 2020)


40


40


40


248


248

5.625% senior unsecured notes (due March 2021)


246


246


246


246


246

4.25% senior unsecured notes (due March 2022)


644


644


644


644


644

3.90% senior unsecured notes (due March 2023)


396


397


397


-


-

Capital leases


185


184


187


105


104

Other


117


133


133


52


68

Total debt


2,943


2,931


2,961


2,602


2,529

Less: Current portion of debt


55


52


254


326


64

Long-term debt


$            2,888


$            2,879


$            2,707


$            2,276


$            2,465

__________














(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 2015 and borrowing capacity of $650 million. As of September 30, 2013, this facility had a remaining borrowing capacity of $377 million.

(c)

 

This debt is collateralized by $2,306 million, $2,414 million, $2,512 million, $2,543 million and $2,517 million of underlying vacation ownership contract receivables and related assets as of September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012 and September 30, 2012, respectively.

(d)

 

 

Represents a $1.5 billion revolving credit facility that expires on July 15, 2018. As of September 30, 2013, the Company had $9 million of outstanding letters of credit and a remaining borrowing capacity of $1.4 billion. After considering outstanding commercial paper borrowings of $164 million, the remaining borrowing capacity was $1.3 billion as of September 30, 2013.

(e)

 

Represents a $750 million commercial paper program which the Company commenced in October 2012. As of September 30, 2013, the program had a remaining borrowing capacity of $586 million.  

(f)

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















 

 














Table 6







(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Three Months Ended September 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

144

33,748

60.3%

$116.22

$70.08








TRYP by Wyndham

108

15,218

66.2%

$94.58

$62.61








Wingate by Wyndham

158

14,491

65.6%

$86.69

$56.88








Hawthorn Suites by Wyndham

91

9,126

64.7%

$73.12

$47.31








Ramada 

829

113,815

58.0%

$80.70

$46.81








Baymont

323

26,636

57.9%

$65.65

$38.00








Days Inn 

1,828

147,891

56.4%

$67.76

$38.25








Super 8 

2,382

152,534

64.0%

$56.34

$36.06








Howard Johnson 

445

45,199

53.7%

$64.43

$34.57








Travelodge 

439

32,773

58.2%

$73.66

$42.87








Microtel Inns & Suites by Wyndham

309

22,085

63.7%

$67.61

$43.08








Knights Inn 

377

23,174

47.1%

$49.32

$23.21








Dream

5

990

75.3%

$226.39

$170.40








Night

3

630

69.8%

$143.58

$100.16









Total Lodging

7,441

638,310

59.2%

$70.59

$41.78








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,440

N/A

N/A

N/A









Total Wyndham Worldwide

7,632

661,750




















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




_______________






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








 

 














Table 6







(2 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

















As of and For the Nine Months Ended September 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

144

33,748

60.2%

$116.07

$69.90








TRYP by Wyndham

108

15,218

61.7%

$95.72

$59.05








Wingate by Wyndham

158

14,491

62.6%

$85.63

$53.56








Hawthorn Suites by Wyndham

91

9,126

63.7%

$72.10

$45.90








Ramada 

829

113,815

53.7%

$79.99

$42.96








Baymont

323

26,636

53.1%

$63.44

$33.70








Days Inn 

1,828

147,891

50.4%

$64.97

$32.73








Super 8 

2,382

152,534

57.7%

$53.25

$30.71








Howard Johnson 

445

45,199

48.3%

$62.76

$30.32








Travelodge 

439

32,773

51.3%

$68.24

$35.01








Microtel Inns & Suites by Wyndham

309

22,085

58.9%

$64.70

$38.12








Knights Inn 

377

23,174

42.7%

$45.56

$19.44








Dream

5

990

70.8%

$222.79

$157.74








Night

3

630

62.0%

$145.14

$89.99









Total Lodging

7,441

638,310

54.0%

$68.56

$37.00








Vacation Ownership






Wyndham Vacation Ownership resorts

191

23,440

N/A

N/A

N/A









Total Wyndham Worldwide

7,632

661,750




















As of and For the Nine 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

60.2%

$110.12

$66.34








TRYP by Wyndham

90

12,955

62.0%

$97.75

$60.63








Wingate by Wyndham

163

14,981

62.9%

$83.64

$52.64








Hawthorn Suites by Wyndham

94

9,272

63.6%

$74.38

$47.30








Ramada 

843

114,227

53.4%

$78.57

$41.96








Baymont

257

21,642

52.3%

$63.86

$33.42








Days Inn 

1,832

147,224

49.7%

$63.57

$31.60








Super 8 

2,312

147,054

56.0%

$53.72

$30.06








Howard Johnson 

445

45,072

48.7%

$62.61

$30.49








Travelodge 

438

32,225

49.9%

$67.37

$33.63








Microtel Inns & Suites by Wyndham

309

22,085

56.1%

$62.35

$34.97








Knights Inn 

358

22,468

41.6%

$43.54

$18.11








Dream

5

990

73.1%

$208.71

$152.63








Night

2

422

64.1%

$173.99

$111.49









Total Lodging

7,257

618,090

53.1%

$67.46

$35.80








Vacation Ownership






Wyndham Vacation Ownership resorts

184

23,152

N/A

N/A

N/A









Total Wyndham Worldwide

7,441

641,242




_______________






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















 

 
















Table 7








(1 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)





















Reported

Legacy

Acquisition 

Adjusted

Three months ended March 31, 2013


Net Revenues


EBITDA

Adjustments (b)

Costs (c)

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

________________








Note: Adjusted EBITDA for the quarters may not add to year-to-date Adjusted EBITDA due to rounding.




(a)

Includes the elimination of transactions between segments.




(b)

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

(c)

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










 

 
























Table 7












(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)





























Reported

Legacy

Impairment

Allowance

Acquisition 

Asset

Restructuring 

Adjusted

Three months ended March 31, 2012


Net Revenues


EBITDA

Adjustments (b)

Recovery (c)

Reversal (d)

Costs (e)

Impairment (f)

Costs (g)

EBITDA

Lodging


$                      185


$                        49

$                            -

$                            -

$                            -

$                          -

$                          -

$                          -

$                        49

Vacation Exchange and Rentals


361


95

-

-

(2)

-

-

-

93

Vacation Ownership


501


103

-

-

-

-

-

-

103

Total Reportable Segments


1,047


247

-

-

(2)

-

-

-

245

Corporate and Other (a)


(11)


(21)

(4)

-

-

-

-

-

(25)

Total Company


$                   1,036


$                      226

$                         (4)

$                            -

$                         (2)

$                          -

$                          -

$                          -

$                      220



























Three months ended June 30, 2012












Lodging


$                      233


$                        75

$                            -

$                         (1)

$                            -

$                          -

$                          -

$                          -

$                        74

Vacation Exchange and Rentals


348


82

-

-

-

-

-

-

82

Vacation Ownership


570


150

-

-

-

-

-

-

150

Total Reportable Segments


1,151


307

-

(1)

-

-

-

-

306

Corporate and Other (a)


(12)


(25)

-

-

-

-

-

-

(25)

Total Company


$                   1,139


$                      282

$                            -

$                         (1)

$                            -

$                          -

$                          -

$                          -

$                      281














Three months ended September 30, 2012











Lodging


$                      249


$                        86

$                            -

$                            -

$                            -

$                          -

$                          -

$                          -

$                        86

Vacation Exchange and Rentals


420


123

-

-

-

-

-

-

123

Vacation Ownership


608


154

-

-

-

1

-

-

155

Total Reportable Segments


1,277


363

-

-

-

1

-

-

364

Corporate and Other (a)


(12)


(30)

1

-

-

-

-

-

(29)

Total Company


$                   1,265


$                      333

$                           1

$                            -

$                            -

$                         1

$                          -

$                          -

$                      335














Three months ended December 31, 2012











Lodging


$                      223


$                        62

$                            -

$                            -

$                            -

$                          -

$                          -

$                          -

$                        62

Vacation Exchange and Rentals


293


28

-

-

-

1

8

5

42

Vacation Ownership


590


142

-

-

-

-

-

2

144

Total Reportable Segments


1,106


232

-

-

-

1

8

7

248

Corporate and Other (a)


(12)


(28)

(2)

-

-

-

-

-

(30)

Total Company


$                   1,094


$                      204

$                         (2)

$                            -

$                            -

$                         1

$                         8

$                         7

$                      218














Twelve months ended December 31, 2012











Lodging


$                      890


$                      272

$                            -

$                         (1)

$                            -

$                          -

$                          -

$                          -

$                      271

Vacation Exchange and Rentals


1,422


328

-

-

(2)

1

8

5

340

Vacation Ownership


2,269


549

-

-

-

1

-

2

552

Total Reportable Segments


4,581


1,149

-

(1)

(2)

2

8

7

1,163

Corporate and Other (a)


(47)


(104)

(5)

-

-

-

-

-

(109)

Total Company


$                   4,534


$                   1,045

$                         (5)

$                         (1)

$                         (2)

$                         2

$                         8

$                         7

$                   1,054

________________












(a)

Includes the elimination of transactions between segments.








(b)

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

(c)

Relates to the recovery of a previously recorded impairment charge.

(d)

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

(e)

Relates to costs incurred in connection with the Company's acquisition of Shell Vacations Club (September 2012) and the acquisitions of several vacation rental businesses (December 2012).

(f)

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

(g)

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


 

 
















Table 8








(1 of 4)









Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)












Three Months Ended September 30, 2013












 As Reported 


 Legacy

Adjustments 


As Adjusted
non-GAAP

Net revenues








Service and membership fees


$                      680




$                      680


Vacation ownership interest sales


384




384


Franchise fees


186




186


Consumer financing


107




107


Other


70




70

Net revenues


1,427


-


1,427









Expenses








Operating


589




589


Cost of vacation ownership interests 


43




43


Consumer financing interest


19




19


Marketing and reservation


213




213


General and administrative


186


1

(a)

187


Depreciation and amortization


54




54

Total expenses


1,104


1


1,105









Operating income


323


(1)


322

Other income, net


(2)




(2)

Interest expense


31




31

Interest income


(2)




(2)









Income before income taxes


296


(1)


295

Provision for income taxes


109


(1)

(b)

108









Net income attributable to Wyndham shareholders


$                      187


$                        -


$                      187









Earnings per share








Basic


$                     1.42


$                        -


$                     1.42


Diluted


1.40


-


1.41









Weighted average shares outstanding








Basic


131


131


131


Diluted


133


133


133

__________







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

(b)

 

Relates to a state tax accrual for legacy tax matters.















 

 






















Table 8











(2 of 4)












Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)














Nine Months Ended September 30, 2013
















Legacy

Adjustments


Acquisition

Costs(c)


Early

Extinguishment

of Debt (e)


As Adjusted

non-GAAP



 As Reported 





Net revenues












Service and membership fees


$                 1,833








$                1,833


Vacation ownership interest sales


995








995


Franchise fees


460








460


Consumer financing


318








318


Other


208








208

Net revenues


3,814


-


-


-


3,814












Expenses












Operating


1,645




(2)




1,643


Cost of vacation ownership interests 


107








107


Consumer financing interest


60








60


Marketing and reservation


570








570


General and administrative


528


(1)

(a)





527


Depreciation and amortization


160








160

Total expenses


3,070


(1)


(2)


-


3,067












Operating income


744


1


2


-


747

Other income, net


(6)








(6)

Interest expense


97








97

Early extinguishment of debt


111






(111)


-

Interest income


(6)








(6)












Income before income taxes


548


1


2


111


662

Provision for income taxes


201


(2)

(b)

1

 (d) 

42

 (d) 

242












Net income


347


3


1


69


420

Net income attributable to noncontrolling interest


(1)


-


-


-


(1)












Net income attributable to Wyndham shareholders


$                    346


$                        3


$                      1


$                     69


$                   419












Earnings per share












Basic


$                   2.58


$                   0.02


$                 0.01


$                  0.51


$                  3.12


Diluted


2.55


0.02


0.01


0.50


3.09












Weighted average shares outstanding












Basic


134


134


134


134


134


Diluted


136


136


136


136


136

__________











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 net expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b)

Relates to a state tax accrual for legacy tax matters.








(c)

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





(d)

Relates to the tax effect of the adjustment.

(e)

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. 


 

 
























Table 8












(3 of 4)













Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)
















Three Months Ended September 30, 2012


















Legacy

Adjustments(a)


Acquisition

Costs(b)


Early

Extinguishment

of Debt(c)


As Adjusted

non-GAAP




 As Reported 





Net revenues












Service fees and membership


$                    566








$                   566


Vacation ownership interest sales


373








373


Franchise fees


168








168


Consumer financing


106








106


Other


52








52

Net revenues


1,265


-


-


-


1,265













Expenses












Operating


495




(1)




494


Cost of vacation ownership interests 


45








45


Consumer financing interest


23








23


Marketing and reservation


197








197


General and administrative


172


(1)






171


Depreciation and amortization


45








45

Total expenses


977


(1)


(1)


-


975













Operating income


288


1


1


-


290

Interest expense


32








32

Early extinguishment of debt


2






(2)


-

Interest income


(2)








(2)













Income before income taxes


256


1


1


2


260

Provision for income taxes


97


-


-


1

 (d) 

98













Net income attributable to Wyndham shareholders


$                    159


$                        1


$                    1


$                        1


$                   162













Earnings per share












Basic


$                   1.13


$                       -


$               0.01


$                   0.01


$                  1.15


Diluted


1.11


-


0.01


0.01


1.13













Weighted average shares outstanding












Basic


141


141


141


141


141


Diluted


144


144


144


144


144

__________











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 net expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(b)

Relates to the 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% and 6.00% senior unsecured notes.

(d)

Relates to the tax effect of the adjustment.

 

 
































Table 8
















(4 of 4)

















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)




















Nine Months Ended September 30, 2012






















Impairment

Recovery(a)


Legacy

Adjustments(b)


Allowance

Reversal(c)


Acquisition

Costs(d)


Early

Extinguishment

of Debt(e)


As Adjusted

non-GAAP




 As Reported 






Net revenues
















Service fees and membership


$                   1,558












$              1,558


Vacation ownership interest sales


987












987


Franchise fees


449












449


Consumer financing


311












311


Other


135












135

Net revenues


3,440


-


-


-


-


-


3,440

















Expenses
















Operating


1,389








(1)




1,388


Cost of vacation ownership interests 


115












115


Consumer financing interest


69












69


Marketing and reservation


554












554


General and administrative


481




3








484


Depreciation and amortization


136












136

Total expenses


2,744


-


3


-


(1)


-


2,746

















Operating income


696


-


(3)


-


1


-


694

Other income, net


(9)


1




2






(6)

Interest expense


98












98

Early extinguishment of debt


108










(108)


-

Interest income


(7)












(7)

















Income before income taxes


506


(1)


(3)


(2)


1


108


609

Provision for income taxes


187


(1)

 (f) 

-


-


-


44

 (f) 

230

















Net income


319


-


(3)


(2)


1


64


379

Net loss attributable to noncontrolling interest


1


-


-


-


-


-


1

















Net income attributable to Wyndham shareholders


$                      320


$                        -


$                            (3)


$                   (2)


$                    1


$                      64


$                 380

















Earnings per share
















Basic


$                     2.20


$                        -


$                       (0.01)


$              (0.01)


$               0.01


$                   0.44


$                2.62


Diluted


2.16


-


(0.01)


(0.01)


0.01


0.43


2.57

















Weighted average shares outstanding
















Basic


145


145


145


145


145


145


145


Diluted


148


148


148


148


148


148


148

__________















The above table reconciles certain non-GAAP financial measures.  The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments.  This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

















Note: EPS amounts may not add due to rounding.















(a)

Relates to the recovery of a previously recorded impairment charge.

(b)

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

(c)

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

(d)

Represents costs incurred in connection with the Company's acquisition of Shell Vacations (September 2012).

(e)

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

(f)

Relates to the tax effect of the adjustment.

















 

 














Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)








FREE CASH FLOW







The Company defines free cash flow to be net cash provided by operating activities less property and equipment additions which it also refers to as capital expenditures. Prior to the fourth quarter 2012,  the Company had previously included development advances within its calculation of free cash flow.  

 

We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.








The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these financial measures:










Nine Months Ended September 30, 





2013


2012










Net cash provided by operating activities


$                     858


$                     808



Less: Property and equipment additions


(153)


(123)



Free cash flow


$                     705


$                     685

















GROSS VOI SALES














The following table provides a reconciliation of Gross VOI sales (see Table 3) to Vacation ownership interest sales (see Table 4):








Year







2013


Q1

Q2

Q3

Q4

Full Year








Gross VOI sales (a)


$                     384

$                     481

$                     536

 N/A 

 N/A 

Less: Sales under WAAM 1.0


(36)

(44)

(51)

 N/A 

 N/A 

Gross VOI sales, net of WAAM 1.0 sales


347

437

486

 N/A 

 N/A 

Less: Loan loss provision


(84)

(90)

(102)

 N/A 

 N/A 

Vacation ownership interest sales (a)


$                     263

$                     347

$                     384

 N/A 

 N/A 








2012














Gross VOI sales (a)


$                     384

$                     460

$                     502

$                     435

$                  1,781

Less: Sales under WAAM 1.0


(17)

(18)

(5)

(10)

(49)

Gross VOI sales, net of WAAM 1.0 sales


367

442

497

426

1,732

Less: Loan loss provision


(96)

(100)

(124)

(89)

(409)

Vacation ownership interest sales (a)


$                     271

$                     342

$                     373

$                     337

$                  1,323








2011














Gross VOI sales


$                     319

$                     412

$                     455

$                     409

$                  1,595

Less: Sales under WAAM 1.0


(18)

(19)

(38)

(31)

(106)

Gross VOI sales, net of WAAM 1.0 sales


302

393

417

378

1,489

Less: Loan loss provision


(79)

(80)

(96)

(83)

(339)

Vacation ownership interest sales


$                     222

$                     313

$                     320

$                     295

$                  1,150








2010














Gross VOI sales


$                     308

$                     371

$                     412

$                     373

$                  1,464

Less: Sales under WAAM 1.0


(5)

(13)

(20)

(14)

(51)

Gross VOI sales, net of WAAM 1.0 sales


303

358

392

359

1,413

Less: Loan loss provision


(86)

(87)

(85)

(82)

(340)

Vacation ownership interest sales


$                     217

$                     271

$                     308

$                     276

$                  1,072

_____________







Note: Amounts may not add due to rounding.







(a) Includes VOI sales under WAAM 2.0 beginning in the second quarter of 2012.



























The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):










Q1

Q2

Q3

Q4

Full Year








2013


$                       24

$                       18

$                       22

 N/A 

 N/A 

2012


$                       27

$                       20

$                       22

$                       28

$                       97

2011


$                       18

$                       18

$                       21

$                       11

$                       68

2010


$                       20

$                       20

$                       23

$                       17

$                       80















 

 

SOURCE Wyndham Worldwide Corporation



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