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

Oct 23, 2013, 06:30 ET from Wyndham Worldwide Corporation

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



RELATED LINKS

http://www.wyndhamworldwide.com