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Wyndham Worldwide Reports Strong Fourth Quarter and Full Year 2010 Earnings
Increases Dividend 25%

PARSIPPANY, N.J., Feb. 9, 2011 /PRNewswire via COMTEX/ --

Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months and year ended December 31, 2010.

Highlights:

  • Fourth quarter adjusted diluted earnings per share (EPS) was $0.46, compared with $0.40 in the fourth quarter of 2009, an increase of 15%. Fourth quarter 2010 reported diluted EPS was $0.43, an increase of 8% from the same period in 2009.
  • Free cash flow increased 11% to $603 million for the year ended December 31, 2010, compared with $541 million in 2009. The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances and excluding a previously announced cash payment related to contingent IRS tax liabilities.
  • The Company's Board of Directors authorized an increase of the quarterly cash dividend to $0.15 from $0.12 per share, beginning with the dividend that is expected to be declared in the first quarter of 2011.
  • During the quarter, the Company repurchased approximately 1.6 million shares of its common stock at an average price of $29.20. For the full year 2010, the Company repurchased approximately 9.3 million shares of its common stock at an average price of $25.52.

"We are pleased to report these results, which are further evidence of the strength of our business models and great execution throughout the company," said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. "We delivered strong cash flow and look to continue to deploy free cash flow to create more value for our shareholders in 2011 through acquisitions, share repurchases and dividends."

FOURTH QUARTER 2010 OPERATING RESULTS

Fourth quarter revenues increased 3% from the prior year period to $937 million. Excluding the $47 million of Vacation Ownership revenue associated with the percentage-of-completion (POC) accounting method in the fourth quarter of 2009, fourth quarter 2010 adjusted revenue growth was 8%. The adjusted revenue growth reflects continued sales momentum across the Company's three business units and incremental contributions from acquisitions.

For the fourth quarter of 2010, adjusted net income increased by 15% to $84 million, compared with $73 million for the same period in 2009. The increase primarily reflects higher RevPAR in the Lodging business, strong operational performance by the Vacation Ownership business and a lower effective tax rate. Adjusted net income for the fourth quarter of 2010 excludes a $6 million after-tax restructuring charge, a $2 million after-tax loss incurred for the repurchase of a portion of the Company's 3.50% convertible notes and a $3 million after-tax net benefit related to the adjustment and resolution of certain contingent liabilities and assets.

Reported net income for the fourth quarter of 2010 was $78 million, or $0.43 per diluted share, compared with net income of $73 million, or $0.40 per diluted share, for the fourth quarter of 2009.

FULL YEAR 2010 OPERATING RESULTS

Reported revenues for full year 2010 were $3.9 billion, an increase of 3% over the prior-year period. Excluding the $187 million of Vacation Ownership revenue associated with the POC accounting method for the full year 2009, full year 2010 adjusted revenue growth was 8%. The adjusted revenue growth reflects continued sales momentum across the Company's three business units and incremental contributions from acquisitions.

Adjusted net income for the full year 2010 increased by 13% to $368 million, compared with $327 million for the prior-year period. The increase primarily reflects higher RevPAR in the Lodging business, strong operational performance by the Vacation Ownership business, contributions from acquisitions in the Exchange and Rentals and Lodging businesses and a lower effective tax rate. Adjusted net income for the full year 2010 excludes a $41 million after-tax net benefit principally related to the resolution of the IRS examination of taxable years 2003 through 2006, an $18 million after-tax charge for the early extinguishment of debt, a $6 million after-tax charge for acquisition costs and a $6 million after-tax restructuring charge.

Reported net income for full year 2010 was $379 million, or $2.05 per diluted share, compared with net income of $293 million, or $1.61 per diluted share, for the prior-year period.

Free cash flow increased 11% to $603 million in the twelve-month period ended December 31, 2010 compared with $541 million in the same period in 2009. The growth of free cash flow reflects higher cash earnings and more efficient working capital utilization. For the twelve months ended December 31, 2010, cash provided by operating activities was $635 million, or $780 million excluding the previously announced one-time payment of $145 million related to a contingent IRS tax liability. Cash provided by operating activities was $689 million for the prior-year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $163 million in the fourth quarter of 2010, an increase of 9%, compared with the fourth quarter of 2009 reflecting RevPAR improvement of 10% as well as incremental revenue from the recently acquired Tryp hotel brand and higher fees generated from ancillary services provided to franchisees.

EBITDA was $40 million, an increase of 25%, compared with the fourth quarter of 2009 reflecting the RevPAR improvement andthe absence of a $6 millionimpairment charge recorded in 2009, partially offset by higher operating costs.

As of December 31, 2010, the Company's hotel system consisted of approximately 7,210 properties and 612,700 rooms. The development pipeline included over 900 hotels and approximately 103,000 rooms, of which 55% were new construction and 51% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $282 million in the fourth quarter of 2010, an increase of 9% compared with the fourth quarter of 2009. In constant currency, revenues increased by 12%.

Exchange revenues were $153 million, relatively flat compared with the fourth quarter of 2009. Exchange revenue per member and the average number of members were flat.

Vacation rental revenues were $114 million, a 16% increase compared with the fourth quarter of 2009. In constant currency, vacation rental revenues increased 24% from the fourth quarter of 2009, primarily reflecting the contribution of incremental revenues from acquired businesses.

Excluding restructuring costs of $9 million and costs related to the acquisition of James Villa Holidays of $1 million, fourth quarter 2010 adjusted EBITDA decreased 13% compared with the prior-year period, reflecting the seasonality of the acquired rental businesses. Excluding the impact of acquisitions, adjusted EBITDA for the fourth quarter of 2010 was flat compared with the fourth quarter of 2009.

Wyndham Exchange & Rentals acquired James Villa Holidays on November 30, 2010, resulting in the addition of approximately 2,300 villas and unique vacation rental properties in over 50 destinations across Mediterranean vacation locations. This acquisition enhances the Company's leading position as the world's largest serviced vacation rentals business, providing access to approximately 97,000 vacation properties worldwide.

Vacation Ownership (Wyndham Vacation Ownership)

Gross Vacation Ownership Interest (VOI) sales were $373 million in the fourth quarter of 2010, up 9% from the fourth quarter of 2009, reflecting a 13% increase in tour flow. Volume per guest was flat compared with the prior year.

Total segment revenues were $497 million in the fourth quarter of 2010, compared with $508 million in the fourth quarter of 2009, which included the recognition of $47 million of previously deferred POC revenues. The absence of these revenues in the fourth quarter of 2010 was partially offset by an increase in gross VOI sales, a lower provision for loan losses and incremental sales under the Wyndham Asset Affiliation Model (WAAM).

EBITDA for the fourth quarter of 2010 was $131 million, compared with EBITDA of $132 million in the fourth quarter of 2009. Excluding an estimated $22 million impact from the POC method of accounting in the fourth quarter of 2009, fourth quarter 2010 adjusted EBITDA growth was 19%. This growth reflected the lower provision for loan losses and the increase in VOI sales.

Other Items

  • The Company repurchased approximately 1.6 million shares of its common stock during the fourth quarter of 2010 at an average price of $29.20 and an additional 455,000 shares at an average price of $29.51 through February 8, 2011.
  • During the fourth quarter of 2010, the Company repurchased $22 million face value of its 3.50% convertible notes and retired the proportionate share of the call options and warrants associated with these notes.
  • Net interest expense in the fourth quarter of 2010 was $34 million, an increase of $1 million from the fourth quarter of 2009, primarily reflecting a $3 million loss incurred for the repurchase of a portion of the Company's 3.50% convertible notes during the fourth quarter of 2010.

Balance Sheet Information as of December 31, 2010:

  • Cash and cash equivalents of approximately $155 million, unchanged from December 31, 2009
  • Vacation ownership contract receivables, net, of $3.0 billion, compared with $3.1 billion at December 31, 2009
  • Vacation ownership and other inventory of approximately $1.2 billion, compared with $1.3 billion at December 31, 2009
  • Securitized vacation ownership debt of $1.7 billion, compared with $1.5 billion at December 31, 2009
  • Other debt of $2.1 billion, compared with $2.0 billion at December 31, 2009. The remaining borrowing capacity on the revolving credit facility was $788 million, compared with $869 million as of December 31, 2009.

A schedule of debt is included in the financial tables section of this press release.

Outlook

The Company's full-year 2011 guidance is:

  • Revenues of approximately $4.0 - $4.2 billion
  • Adjusted EBITDA of approximately $925 - $955 million

The guidance reflects assumptions used for internal planning purposes. All guidance excludes legacy items, restructuring costs, debt extinguishment and acquisition costs, if any, which may have a positive or negative impact on reported results. If economic conditions change materially from current levels, these assumptions and our guidance may change materially. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA to the most directly comparable GAAP measure because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to our financial results.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, February 9, 2011 at 8:30 a.m. EST. 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 EST on February 9, 2011. The conference call may also be accessed by dialing (800) 369-2052 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 EST on February 9, 2011, at (800) 294-7481.

Presentation of Financial Information

Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items.These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release.

About Wyndham Worldwide Corporation

As one of the world's largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses approximately 7,210 franchised hotels and approximately 612,700 hotel rooms worldwide. Wyndham Exchange & Rentals offers leisure travelers, including its 3.8 million members, access to approximately 97,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of over 160 vacation ownership resorts serving nearly 815,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs approximately 26,000 employees globally.

For more information about Wyndham Worldwide, please visit the Company's website at 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, dividends and related financial and operating measures.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Quarterly Report on Form 10-Q, filed with the SEC on October 28, 2010. 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), interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company's Consolidated Statements of Operations. 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 for the three and twelve months ended December 31, 2010 and 2009:













Three Months Ended December 31,




2010


2009




Net Revenues


EBITDA


Net Revenues


EBITDA


Lodging

$ 163


$ 40


$ 149


$ 32

(k)

Vacation Exchange and Rentals

282


32

(d)

258


48


Vacation Ownership

497


131


508


132

(l)

Total Reportable Segments

942


203


915


212


Corporate and Other (a) (b)

(5)


(20)


(2)


(18)


Total Company

$ 937


$ 183


$ 913


$ 194












Reconciliation of EBITDA to Net Income



















EBITDA



$ 183




$ 194


Depreciation and amortization



44




44


Interest expense



34

(e)



35


Interest income



-




(2)


Income before income taxes



105




117


Provision for income taxes



27




44


Net income



$ 78




$ 73














Twelve Months Ended December 31,




2010


2009




Net Revenues


EBITDA


Net Revenues


EBITDA

(m)

Lodging

$ 688


$ 189

(f)

$ 660


$ 175

(k)

Vacation Exchange and Rentals

1,193


293

(d) (g)

1,152


287


Vacation Ownership

1,979


440

(h)

1,945


387

(h)

Total Reportable Segments

3,860


922


3,757


849


Corporate and Other (a) (c)

(9)


(24)


(7)


(71)


Total Company

$ 3,851


$ 898


$ 3,750


$ 778












Reconciliation of EBITDA to Net Income



















EBITDA



$ 898




$ 778


Depreciation and amortization



173




178


Interest expense



167

(i) (j)



114


Interest income



(5)




(7)


Income before income taxes



563




493


Provision for income taxes



184




200


Net income



$ 379




$ 293






















__________









(a) Includes the elimination of transactions between segments.

(b) Includes $3 million ($3 million, net of tax) of a net benefit during the three months ended December 31, 2010 related to the resolution of and adjustment to certain contingent liabilities and assets.

(c) Includes $54 million ($41 million, net of tax) of a net benefit and $6 million ($6 million, net of tax) of a net expense during the twelve months ended December 31, 2010 and 2009, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets.

(d) Includes (i) restructuring costs of $9 million ($6 million, net of tax) and (ii) $1 million ($1 million, net of tax) related to costs incurred in connection with the Company's acquisition of James Villa Holidays during November 2010.

(e) Includes $3 million ($2 million, net of tax) of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the fourth quarter of 2010.

(f) Includes $1 million ($1 million, net of tax) related to costs incurred in connection with the Company's acquisition of the Tryp hotel brand during June 2010.

(g) Includes $5 million ($4 million, net of tax) related to costs incurred in connection with the Company's acquisitions of Hoseasons during March 2010 and ResortQuest during September 2010.

(h) Includes a non-cash impairment charge of $4 million ($3 million, net of tax) and $9 million ($7 million, net of tax) during the twelve months ended December 31, 2010 and 2009, respectively, to reduce the value of certain vacation ownership properties and related assets held for sale that are no longer consistent with the Company's development plans.

(i) Includes $14 million ($8 million, net of tax) of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the third and fourth quarters of 2010.

(j) Includes $16 million of costs incurred for the early extinguishment of the Company's term loan facility and revolving foreign credit facility during March 2010. The after-tax impact of such costs is $10 million.

(k) Includes a non-cash impairment charge of $6 million ($3 million, net of tax) to reduce the value of an underperforming joint venture in the Company's hotel management business.

(l) Includes (i) restructuring costs of $1 million ($1 million, net of tax) and (ii) a non-cash impairment charge of $1 million ($1 million, net of tax) to reduce the value of assets held for sale related to a vacation ownership property that is no longer consistent with the Company's development plans.

(m) Includes restructuring costs of $3 million, $6 million, $37 million and $1 million for Lodging, Vacation Exchange and Rentals, Vacation Ownership and Corporate and Other, respectively. The after-tax impact of such costs is $29 million.

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)



























Three Months Ended


Twelve Months Ended




December 31,


December 31,




2010


2009


2010


2009


Net revenues










Service fees and membership

$ 409


$ 371


$ 1,706


$ 1,613



Vacation ownership interest sales

276


287


1,072


1,053



Franchise fees

107


98


461


440



Consumer financing

107


109


425


435



Other

38


48


187


209


Net revenues

937


913


3,851


3,750












Expenses










Operating (a)

409


356


1,587

(b)

1,501



Cost of vacation ownership interests

47


47


184


183



Consumer financing interest

25


37


105


139



Marketing and reservation

121


137


531


560



General and administrative (c)

145


136


540


533



Asset impairment

-


7

(d)

4

(e)

15

(d)


Restructuring costs

9

(f)

1

(g)

9

(f)

47

(g)


Depreciation and amortization

44


44


173


178


Total expenses

800


765


3,133


3,156












Operating income

137


148


718


594


Other income, net

(2)


(2)


(7)


(6)


Interest expense

34

(h)

35


167

(h)

114


Interest income

-


(2)


(5)


(7)












Income before income taxes

105


117


563


493


Provision for income taxes

27


44


184


200












Net income

$ 78


$ 73


$ 379


$ 293












Earnings per share










Basic

$ 0.45


$ 0.41


$ 2.13


$ 1.64



Diluted

0.43


0.40


2.05


1.61












Weighted average shares outstanding










Basic

174


179


178


179



Diluted

182


184


185


182


__________

(a) Includes $1 million ($1 million, net of tax) during both the three and twelve months ended December 31, 2010 related to the Company's November 2010 acquisition of James Villa Holidays.

(b) Includes (i) $4 million ($3 million, net of tax) of costs incurred in connection with the Company's March 2010 acquisition of Hoseasons; (ii) $1 million ($1 million, net of tax) related to costs incurred in connection with the Company's June 2010 acquisition of the Tryp hotel brand; and (iii) $1 million ($1 million, net of tax) of costs incurred in connection with the Company's September 2010 acquisition of ResortQuest.

(c) Includes $3 million ($3 million, net of tax) of a net benefit during the three months ended December 31, 2010 and $54 million ($41 million, net of tax) of a net benefit and $6 million ($6 million, net of tax) of a net expense during the twelve months ended December 31, 2010 and 2009, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets.

(d) Represents (i) a non-cash impairment charge of $6 million ($3 million, net of tax) to reduce the value of an underperforming joint venture in the Company's hotel management business and (ii) a non-cash impairment charge of $1 million ($1 million, net of tax) to reduce the value of assets held for sale related to a vacation ownership property that is no longer consistent with the Company's development plans during the three and twelve months ended December 31, 2009. The twelve months ended December 31, 2009 also includes non-cash impairment charges of $8 million ($6 million, net of tax) to reduce the value of certain other vacation ownership properties and related assets held for sale that are no longer consistent with the Company's development plans.

(e) Relates to non-cash impairment charges to reduce the value of certain vacation ownership properties and related assets held for sale that are no longer consistent with the Company's development plans. The after-tax impact of such charges was $3 million.

(f) Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during 2010. Such amounts, net of tax, were $6 million during both the three and twelve months ended December 31, 2010.

(g) Relates to costs incurred as a result of various strategic initiatives approved by the Company and commenced during 2008. Such amounts, net of tax, were $1 million and $29 million during the three and twelve months ended December 31, 2009, respectively.

(h) The three and twelve months ended December 31, 2010 include $3 million ($2 million, net of tax) and $14 million ($8 million, net of tax), respectively, of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the third and fourth quarters of 2010. The twelve months ended December 31, 2010 also includes $16 million ($10 million, net of tax) of costs incurred for the early extinguishment of the Company's term loan facility and revolving foreign credit facility during March 2010.


Table 3

(1 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS



Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Rooms

2010

593,300

606,800

605,700

612,700

N/A



2009

588,500

590,200

590,900

597,700

N/A



2008

551,100

551,500

583,400

592,900

N/A



2007

539,300

541,700

540,900

550,600

N/A










RevPAR

2010

$ 25.81

$ 32.25

$ 37.14

$ 29.18

$ 31.14



2009

$ 27.69

$ 32.38

$ 34.81

$ 26.47

$ 30.34



2008

$ 32.21

$ 38.87

$ 41.93

$ 30.03

$ 35.74



2007

$ 31.35

$ 38.35

$ 43.10

$ 33.09

$ 36.48









Vacation Exchange and Rentals (b)








Average Number of Members (in 000s)

2010

3,746

3,741

3,766

3,759

3,753



2009

3,789

3,795

3,781

3,765

3,782



2008

3,632

3,682

3,673

3,693

3,670



2007

3,474

3,506

3,538

3,588

3,526










Exchange Revenue Per Member

2010

$ 201.93

$ 172.20

$ 173.44

$ 162.59

$ 177.53



2009

$ 194.83

$ 174.22

$ 173.90

$ 163.89

$ 176.73



2008

$ 234.05

$ 201.04

$ 193.39

$ 165.99

$ 198.48



2007

$ 236.71

$ 203.84

$ 203.44

$ 195.86

$ 209.80










Vacation Rental Transactions (in 000s) (c)

2010

291

297

322

253

1,163



2009

273

231

264

196

964



2008

269

220

255

191

936



2007

272

223

254

192

942










Average Net Price Per Vacation Rental (c)

2010

$ 361.17

$ 387.01

$ 500.31

$ 449.12

$ 425.38



2009

$ 353.15

$ 471.74

$ 594.34

$ 499.66

$ 477.38



2008

$ 442.50

$ 541.69

$ 659.93

$ 460.86

$ 528.95



2007

$ 365.20

$ 465.60

$ 598.26

$ 504.47

$ 480.32









Vacation Ownership








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

2010

$ 308,000

$ 371,000

$ 412,000

$ 373,000

$ 1,464,000



2009

$ 280,000

$ 327,000

$ 366,000

$ 343,000

$ 1,315,000



2008

$ 458,000

$ 532,000

$ 566,000

$ 432,000

$ 1,987,000



2007

$ 430,000

$ 523,000

$ 552,000

$ 488,000

$ 1,993,000










Tours

2010

123,000

163,000

187,000

160,000

634,000



2009

137,000

164,000

173,000

142,000

617,000



2008

255,000

314,000

334,000

240,000

1,143,000



2007

240,000

304,000

332,000

268,000

1,144,000










Volume Per Guest (VPG)

2010

$ 2,334

$ 2,156

$ 2,081

$ 2,214

$ 2,183



2009

$ 1,866

$ 1,854

$ 1,944

$ 2,210

$ 1,964



2008

$ 1,668

$ 1,583

$ 1,550

$ 1,630

$ 1,602



2007

$ 1,607

$ 1,596

$ 1,545

$ 1,690

$ 1,606









Note: Full year amounts may not foot across due to rounding.
(a) Includes the impact of the acquisitions of Microtel Inns & Suites and Hawthorn Suites (July 2008) and the Tryp hotel brand (June 2010) from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
(b) Vacation Exchange and Rentals statistics were revised during the first quarter of 2010 to capture member-related rentals and other servicing fees as components of the exchange statistics. Prior to the first quarter of 2010, such amounts were included within the Company's vacation rental statistics and other ancillary revenues.
(c) Includes the impact of the acquisitions of Hoseasons (March 2010), ResortQuest (September 2010) and James Villa Holidays (November 2010) from the acquisition dates 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) beginning in the first quarter of 2010 (see Table 9 for a reconciliation of gross VOI sales to vacation ownership interest sales).








Table 3








(2 of 3)









Wyndham Worldwide Corporation

ADDITIONAL DATA






Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Properties

2010

7,090

7,160

7,150

7,210

N/A



2009

6,990

7,020

7,040

7,110

N/A



2008

6,550

6,560

6,970

7,040

N/A



2007

6,450

6,460

6,460

6,540

N/A









Vacation Ownership








Deferred Revenues (in 000s) (b)

2010

$ -

$ -

$ -

$ -

$ -



2009

$ 67,000

$ 37,000

$ 36,000

$ 47,000

$ 187,000



2008

$ (82,000)

$ (5,000)

$ (2,000)

$ 14,000

$ (75,000)



2007

$ 4,000

$ (5,000)

$ 1,000

$ (21,000)

$ (22,000)










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

2010

$ 86,000

$ 87,000

$ 85,000

$ 82,000

$ 340,000



2009

$ 107,000

$ 122,000

$ 117,000

$ 103,000

$ 449,000



2008

$ 82,000

$ 113,000

$ 119,000

$ 136,000

$ 450,000



2007

$ 61,000

$ 75,000

$ 86,000

$ 84,000

$ 305,000










Sales under WAAM (in 000s) (d)

2010

$ 5,000

$ 13,000

$ 20,000

$ 14,000

$ 51,000










WAAM Commission Revenues (in 000s)

2010

$ 3,000

$ 8,000

$ 12,000

$ 9,000

$ 31,000

















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

(a) Includes the impact of the acquisition of Microtel Inns & Suites and Hawthorn Suites (July 2008) and the Tryp hotel brand (June 2010) from the acquisition dates forward. Therefore, the data is not presented on a comparable basis.

(b) Represents the revenue that is deferred under the percentage of completion method of accounting. Under the percentage of completion method of accounting, a portion of the total revenue from a vacation ownership contract sale is not recognized if the construction of the vacation resort has not yet been fully completed. This revenue will be recognized in future periods in proportion to the costs incurred as compared to the total expected costs for completion of construction of the vacation resort. Positive amounts represent the recognition of previously deferred revenues.

(c) 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.

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








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, (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided or (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 pay annual membership dues. 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 products and services.


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


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


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


Vacation Ownership


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


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


Volume per Guest (VPG): Represents gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. We have excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel. See Table 9 for a detail of tele-sales upgrades for 2007-2010. We believe that VPG provides an enhanced understanding of the performance of our vacation ownership business because it directly measures the efficiency of this business' tour selling efforts during a given reporting period.


General


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













Table 4














Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)






2010


2009



Q1

Q2

Q3

Q4

Year


Q1

Q2

Q3

Q4

Year

Lodging













Royalties and Franchise Fees

$ 52

$ 69

$ 82

$ 62

$ 265


$ 57

$ 68

$ 72

$ 57

$ 254


Marketing, Reservation and Wyndham Rewards Revenues (a)

50

65

76

60

251


54

66

73

53

246


Hotel Management Reimbursable Revenues (b)

21

20

18

18

77


22

23

21

19

85


Ancillary Revenues (c)

21

24

27

23

95


21

17

17

20

75


Total Lodging

144

178

203

163

688


154

174

183

149

660














Vacation Exchange and Rentals













Exchange Revenues

189

161

163

153

666


185

165

164

154

668


Rental Revenues

105

115

161

114

495


96

109

157

98

460


Ancillary Revenues (d)

6

5

6

15

32


6

6

6

6

24


Total Vacation Exchange and Rentals

300

281

330

282

1,193


287

280

327

258

1,152














Vacation Ownership













Vacation Ownership Interest Sales

217

271

308

276

1,072


239

242

285

287

1,053


Consumer Financing

105

106

107

107

425


109

109

108

109

435


Property Management Fees

100

100

104

101

405


91

94

96

95

376


Sales under the WAAM

3

8

12

8

31


-

-

-

-

-


Ancillary Revenues (e)

19

20

2

5

46


23

22

19

17

81


Total Vacation Ownership

444

505

533

497

1,979


462

467

508

508

1,945

Total Reportable Segments

$ 888

$ 964

$ 1,066

$ 942

$ 3,860


$ 903

$ 921

$ 1,018

$ 915

$ 3,757





























2008


2007



Q1

Q2

Q3

Q4

Year


Q1

Q2

Q3

Q4

Year

Lodging













Royalties and Franchise Fees

$ 64

$ 78

$ 88

$ 66

$ 297


$ 63

$ 78

$ 89

$ 67

$ 296


Marketing, Reservation and Wyndham Rewards Revenues (a)

60

75

84

61

280


60

73

84

64

281


Hotel Management Reimbursable Revenues (b)

27

26

25

21

100


16

22

26

28

92


Ancillary Revenues (c)

19

21

16

22

76


13

13

12

17

56


Total Lodging

170

200

213

170

753


152

186

211

176

725














Vacation Exchange and Rentals













Exchange Revenues

213

185

178

152

728


206

179

180

175

740


Rental Revenues

119

119

169

88

495


99

104

152

97

452


Ancillary Revenues (d)

9

10

7

10

36


9

5

4

8

26


Total Vacation Exchange and Rentals

341

314

354

250

1,259


314

288

336

280

1,218














Vacation Ownership













Vacation Ownership Interest Sales

294

414

446

309

1,463


373

443

467

383

1,666


Consumer Financing

99

104

111

112

426


81

88

93

96

358


Property Management Fees

85

84

89

89

346


74

78

79

78

310


Ancillary Revenues (e)

26

19

15

(18)

43


21

20

32

19

91


Total Vacation Ownership

504

621

661

492

2,278


549

629

671

576

2,425

Total Reportable Segments

$ 1,015

$ 1,135

$ 1,228

$ 912

$ 4,290


$ 1,015

$ 1,103

$ 1,218

$ 1,032

$ 4,368



























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

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

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

(c) Primarily includes additional services provided to franchisees.

(d) Primarily includes fees generated from programs with affiliated resorts.

(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 businesses.
















Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)








































December 31,

2010


September 30,

2010


June 30,

2010


March 31,

2010


December 31,

2009

















Securitized vacation ownership debt (a)











Term notes


$ 1,498


$ 1,400


$ 1,255


$ 1,258


$ 1,112

Bank conduit facility (b)


152


215


291


240


395

Securitized vacation ownership debt (c)


1,650


1,615


1,546


1,498


1,507

Less: Current portion of securitized vacation ownership debt


223


187


248


220


209

Long-term securitized vacation ownership debt


$ 1,427


$ 1,428


$ 1,298


$ 1,278


$ 1,298

















Debt:











6.00% senior unsecured notes (due December 2016) (d)


$ 798


$ 798


$ 798


$ 798


$ 797

Term loan (e)


-


-


-


-


300

Revolving credit facility (due October 2013) (f)


154


26


-


199


-

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


241


240


239


239


238

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


266


289


362


448


367

7.375% senior unsecured notes (due March 2020) (i)


247


247


247


247


-

5.75% senior unsecured notes (due February 2018) (j)


247


247


-


-


-

Vacation ownership bank borrowings (k)


-


-


-


-


153

Vacation rentals capital leases


115


120


110


123


133

Other


26


34


36


28


27

Total debt


2,094


2,001


1,792


2,082


2,015

Less: Current portion of debt


11


32


29


23


175

Long-term debt


$ 2,083


$ 1,969


$ 1,763


$ 2,059


$ 1,840

__________

(a) The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPE") that are consolidated with 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 364-day, non-recourse vacation ownership bank conduit facility with a term through September 2011 and borrowing capacity of $600 million. As of December 31, 2010, our 364-day facility has remaining borrowing capacity of $448 million.

(c) This debt is collateralized by $2,865 million, $2,874 million, $2,862 million, $2,712 million and $2,755 million of underlying vacation ownership contract receivables and related assets as of December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

(d) The balance as of December 31, 2010 represents $800 million aggregate principal less $2 million of unamortized discount.

(e) The Company's term loan facility was fully repaid during March 2010.

(f) During March 2010, the Company replaced its five-year $900 million revolving credit facility with a $950 million revolving credit facility that expires on October 1, 2013. During the fourth quarter of 2010, the total capacity of this facility was increased to $970 million. As of December 31, 2010, the Company has $28 million of outstanding letters of credit and a remaining borrowing capacity of $788 million.

(g) Represents senior unsecured notes issued by the Company during May 2009. The balance as of December 31, 2010 represents $250 million aggregate principal less $9 million of unamortized discount.

(h) Represents convertible notes issued by the Company during May 2009, which includes debt principal, less unamortized discount, and a liability related to a bifurcated conversion feature. During the third and fourth quarters of 2010, the Company repurchased a portion of its 3.50% convertible notes, which resulted in a corresponding reduction of the unamortized discount. The following table details the components of the convertible notes:









December 31, 2010


September 30, 2010


June 30, 2010


March 31, 2010


December 31, 2009


















Debt principal


$ 116


$ 138


$ 230


$ 230


$ 230


Unamortized discount


(12)


(17)


(31)


(35)


(39)


Debt less discount


104


121


199


195


191


Fair value of conversion feature (*)

162


168


163


253


176


Convertible notes


$ 266


$ 289


$ 362


$ 448


$ 367






















(*) The Company also has an asset with a fair value equal to the conversion feature, which represents cash-settled call options that the Company purchased concurrent with the issuance of the convertible notes.























(i) Represents senior unsecured notes issued by the Company during February 2010. The balance as of December 31, 2010 represents $250 million aggregate principal less $3 million of unamortized discount.

(j) Represents senior unsecured notes issued by the Company during September 2010. The balance as of December 31, 2010 represents $250 million aggregate principal less $3 million of unamortized discount.

(k) Represents a 364-day, AUD 213 million, secured, revolving foreign credit facility, which was paid down and terminated during March 2010.

Table 6

(1 of 2)

Wyndham Worldwide Corporation

HOTEL BRAND SYSTEMS DETAILS





As of and For the Three Months Ended December 31, 2010

Brand

Number of

Properties

Number of

Rooms

Average Occupancy Rate

Average Daily

Rate

(ADR)

Average Revenue

Per

Available Room

(RevPAR)








Wyndham Hotels and Resorts

101

28,311

52.0%

$108.89

$56.62








Tryp by Wyndham

94

13,692

62.0%

$101.09

$62.64








Wingate by Wyndham

165

15,066

54.0%

$77.24

$41.73








Hawthorn Suites by Wyndham

76

7,100

53.3%

$71.94

$38.34








Ramada

896

119,042

48.8%

$75.61

$36.93








Baymont

261

21,933

41.9%

$59.18

$24.78








Days Inn

1,877

149,980

41.4%

$58.09

$24.05








Super 8

2,174

136,267

46.1%

$52.53

$24.21








Howard Johnson

474

46,362

42.5%

$57.45

$24.42








Travelodge

436

31,908

40.8%

$60.54

$24.72








Microtel Inns & Suites

316

22,539

45.9%

$56.57

$25.97








Knights Inn

336

20,335

35.0%

$40.98

$14.35








Other (*)

1

200

N/A

N/A

N/A









Total

7,207

612,735

45.3%

$64.44

$29.18

















As of and For the Three Months Ended December 31, 2009


Brand

Number of Properties

Number of Rooms

Average Occupancy Rate

Average Daily Rate (ADR)

Average Revenue Per Available Room (RevPAR)








Wyndham Hotels and Resorts

94

24,517

50.5%

$108.64

$54.83








Wingate by Wyndham

166

15,239

49.3%

$78.41

$38.65








Hawthorn Suites by Wyndham

89

8,238

46.7%

$76.24

$35.62








Ramada

910

118,880

43.8%

$75.97

$33.28








Baymont

240

20,459

40.2%

$58.50

$23.50








Days Inn

1,858

149,633

39.0%

$58.96

$23.01








Super 8

2,137

132,876

42.9%

$53.87

$23.11








Howard Johnson

492

46,748

38.9%

$58.18

$22.65








Travelodge

460

34,098

38.4%

$59.37

$22.77








Microtel Inns & Suites

314

22,376

43.5%

$55.15

$23.97








Knights Inn

343

21,061

33.7%

$40.24

$13.57








Other (*)

11

3,549

N/A

N/A

N/A









Total

7,114

597,674

41.6%

$63.62

$26.47

_______________






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.

(*) Represents properties we manage under a joint venture and, as of December 31, 2009, also includes properties for which we received a fee for reservation services provided. As these properties are not branded under a Wyndham Hotel Group brand, operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant.







Table 6







(2 of 2)

Wyndham Worldwide Corporation

HOTEL BRAND SYSTEMS DETAILS

















As of and For the Twelve Months Ended December 31, 2010

Brand

Number of Properties

Number of Rooms

Average Occupancy Rate

Average Daily Rate (ADR)

Average Revenue Per Available Room (RevPAR)








Wyndham Hotels and Resorts

101

28,311

55.0%

$109.23

$60.10








Tryp by Wyndham

94

13,692

62.6%

$92.47

$57.86








Wingate by Wyndham

165

15,066

57.6%

$79.09

$45.56








Hawthorn Suites by Wyndham

76

7,100

55.4%

$75.78

$41.98








Ramada

896

119,042

49.6%

$73.45

$36.43








Baymont

261

21,933

46.5%

$60.60

$28.19








Days Inn

1,877

149,980

45.5%

$60.46

$27.52








Super 8

2,174

136,267

49.3%

$55.54

$27.41








Howard Johnson

474

46,362

45.2%

$60.05

$27.13








Travelodge

436

31,908

44.7%

$63.51

$28.39








Microtel Inns & Suites

316

22,539

49.8%

$57.35

$28.54








Knights Inn

336

20,335

37.3%

$42.28

$15.76








Other (*)

1

200

N/A

N/A

N/A









Total

7,207

612,735

48.0%

$64.85

$31.14

















As of and For the Twelve Months Ended December 31, 2009


Brand

Number of Properties

Number of Rooms

Average Occupancy Rate

Average Daily Rate (ADR)

Average Revenue Per Available Room (RevPAR)








Wyndham Hotels and Resorts

94

24,517

52.6%

$114.56

$60.21








Wingate by Wyndham

166

15,239

53.6%

$83.16

$44.54








Hawthorn Suites by Wyndham

89

8,238

51.6%

$83.55

$43.10








Ramada

910

118,880

47.0%

$74.55

$35.04








Baymont

240

20,459

45.2%

$62.46

$28.25








Days Inn

1,858

149,633

44.9%

$62.24

$27.95








Super 8

2,137

132,876

48.5%

$56.67

$27.48








Howard Johnson

492

46,748

42.2%

$61.22

$25.86








Travelodge

460

34,098

43.4%

$61.87

$26.85








Microtel Inns & Suites

314

22,376

49.0%

$56.72

$27.79








Knights Inn

343

21,061

37.2%

$42.46

$15.79








Other (*)

11

3,549

N/A

N/A

N/A









Total

7,114

597,674

46.3%

$65.52

$30.34

_______________






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.

(*) Represents properties we manage under a joint venture and, as of December 31, 2009, also includes properties for which we received a fee for reservation services provided. As these properties are not branded under a Wyndham Hotel Group brand, operating statistics (such as average occupancy rate, ADR and RevPAR) are not relevant.









Table 7









(1 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATIONS

(In millions)























Reported

Acquisition

Legacy

Restructuring

Adjusted

Three months ended March 31, 2010

Net Revenues


EBITDA

Costs (b)

Adjustments (c)

Costs (d)

EBITDA

Lodging

$ 144


$ 33

$ -

$ -

$ -

$ 33

Vacation Exchange and Rentals

300


80

4

-

-

84

Vacation Ownership

444


82

-

-

-

82

Total Reportable Segments

888


195

4

-

-

199

Corporate and Other (a)

(2)


(20)

-

2

-

(18)

Total Company

$ 886


$ 175

$ 4

$ 2

$ -

$ 181



















Three months ended June 30, 2010








Lodging

$ 178


$ 49

$ 1

$ -

$ -

$ 50

Vacation Exchange and Rentals

281


78

-

-

-

78

Vacation Ownership

505


104

-

-

-

104

Total Reportable Segments

964


231

1

-

-

232

Corporate and Other (a)

(1)


(14)

-

-

-

(14)

Total Company

$ 963


$ 217

$ 1

$ -

$ -

$ 218



















Three months ended September 30, 2010








Lodging

$ 203


$ 67

$ -

$ -

$ -

$ 67

Vacation Exchange and Rentals

330


103

1

-

-

104

Vacation Ownership

533


123

-

-

-

123

Total Reportable Segments

1,066


293

1

-

-

294

Corporate and Other (a)

(1)


30

-

(52)

-

(22)

Total Company

$ 1,065


$ 323

$ 1

$ (52)

$ -

$ 272



















Three months ended December 31, 2010








Lodging

$ 163


$ 40

$ -

$ -

$ -

$ 40

Vacation Exchange and Rentals

282


32

1

-

9

42

Vacation Ownership

497


131

-

-

-

131

Total Reportable Segments

942


203

1

-

9

213

Corporate and Other (a)

(5)


(20)

-

(3)

-

(23)

Total Company

$ 937


$ 183

$ 1

$ (3)

$ 9

$ 190



















Twelve months ended December 31, 2010








Lodging

$ 688


$ 189

$ 1

$ -

$ -

$ 190

Vacation Exchange and Rentals

1,193


293

6

-

9

308

Vacation Ownership

1,979


440

-

-

-

440

Total Reportable Segments

3,860


922

7

-

9

938

Corporate and Other (a)

(9)


(24)

-

(54)

-

(78)

Total Company

$ 3,851


$ 898

$ 7

$ (54)

$ 9

$ 860

________________








Note: Amounts may not foot across due to rounding.

(a) Includes the elimination of transactions between segments.

(b) Relates to costs incurred in connection with the Company's acquisitions of Hoseasons during March 2010, the Tryp hotel brand during June 2010, ResortQuest during September 2010 and James Villa Holidays during November 2010.

(c) Relates to the net expense/(benefit) from the resolution of and adjustment to certain contingent liabilities and assets.

(d) Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2010.








Table 7








(2 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATIONS

(In millions)





















Reported

Restructuring

Legacy

Adjusted

Three months ended March 31, 2009

Net Revenues


EBITDA

Related Costs (b)

Adjustments (c)

EBITDA

Lodging

$ 154


$ 35

$ 3

$ -

$ 38

Vacation Exchange and Rentals

287


76

4

-

80

Vacation Ownership

462


44

35

-

79

Total Reportable Segments

903


155

42

-

197

Corporate and Other (a)

(2)


(21)

1

4

(16)

Total Company

$ 901


$ 134

$ 43

$ 4

$ 181

















Three months ended June 30, 2009







Lodging

$ 174


$ 50

$ -

$ -

$ 50

Vacation Exchange and Rentals

280


56

2

-

58

Vacation Ownership

467


107

1

-

108

Total Reportable Segments

921


213

3

-

216

Corporate and Other (a)

(1)


(17)

-

-

(17)

Total Company

$ 920


$ 196

$ 3

$ -

$ 199

















Three months ended September 30, 2009







Lodging

$ 183


$ 58

$ -

$ -

$ 58

Vacation Exchange and Rentals

327


107

-

-

107

Vacation Ownership

508


104

-

-

104

Total Reportable Segments

1,018


269

-

-

269

Corporate and Other (a)

(2)


(15)

-

2

(13)

Total Company

$ 1,016


$ 254

$ -

$ 2

$ 256

















Three months ended December 31, 2009







Lodging

$ 149


$ 32

$ -

$ -

$ 32

Vacation Exchange and Rentals

258


48

-

-

48

Vacation Ownership

508


132

-

-

132

Total Reportable Segments

915


212

-

-

212

Corporate and Other (a)

(2)


(18)

-

-

(18)

Total Company

$ 913


$ 194

$ -

$ -

$ 194

























Twelve months ended December 31, 2009







Lodging

$ 660


$ 175

$ 3

$ -

$ 178

Vacation Exchange and Rentals

1,152


287

6

-

293

Vacation Ownership

1,945


387

36

-

423

Total Reportable Segments

3,757


849

45

-

894

Corporate and Other (a)

(7)


(71)

1

6

(64)

Total Company

$ 3,750


$ 778

$ 46

$ 6

$ 830

________________







Note: Amounts may not foot across due to rounding.

(a) Includes the elimination of transactions between segments.

(b) Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

(c) Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets.














Table 8














(1 of 3)















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)


















Three Months Ended December 31, 2010




















Early

Extinguishment of

Debt


Acquisition

Costs


Legacy

Adjustments


Restructuring

Costs






As Reported






As Adjusted

Net revenues














Service fees and membership


$ 409










$ 409


Vacation ownership interest sales


276










276


Franchise fees


107










107


Consumer financing


107










107


Other


38










38

Net revenues


937


-


-


-


-


937















Expenses














Operating


409




(1)

(b)





408


Cost of vacation ownership interests


47










47


Consumer financing interest


25










25


Marketing and reservation


121










121


General and administrative


145






3

(c)



148


Restructuring costs


9








(9)

(d)

-


Depreciation and amortization


44










44

Total expenses


800


-


(1)


3


(9)


793















Operating income


137


-


1


(3)


9


144

Other income, net


(2)










(2)

Interest expense


34


(3)

(a)







31















Income before income taxes


105


3


1


(3)


9


115

Provision for income taxes


27


1

(e)

-

(e)

-

(e)

3

(e)

31















Net income


$ 78


$ 2


$ 1


$ (3)


$ 6


$ 84















Earnings per share














Basic


$ 0.45


$ 0.01


$ 0.01


$ (0.02)


$ 0.04


$ 0.48


Diluted


0.43


0.01


-


(0.02)


0.03


0.46















Weighted average shares outstanding














Basic


174


174


174


174


174


174


Diluted


182


182


182


182


182


182

__________













Note: EPS amounts may not foot due to rounding.

(a) Relates to costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the fourth quarter of 2010.

(b) Relates to costs incurred in connection with the Company's acquisition of James Villa Holidays during November 2010.

(c) Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets.

(d) Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2010.

(e) Relates to the tax effect of the adjustments.














Table 8














(2 of 3)















Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)


















Twelve Months Ended December 31, 2010




















Early

Extinguishment of

Debt


Acquisition Costs


Legacy

Adjustments


Restructuring

Costs






As Reported






As Adjusted

Net revenues














Service fees and membership


$ 1,706










$ 1,706


Vacation ownership interest sales


1,072










1,072


Franchise fees


461










461


Consumer financing


425










425


Other


187










187

Net revenues


3,851


-


-


-


-


3,851















Expenses














Operating


1,587




(7)

(b)





1,580


Cost of vacation ownership interests


184










184


Consumer financing interest


105










105


Marketing and reservation


531










531


General and administrative


540






54

(c)



594


Asset impairment


4










4


Restructuring costs


9








(9)

(d)

-


Depreciation and amortization


173










173

Total expenses


3,133


-


(7)


54


(9)


3,171















Operating income


718


-


7


(54)


9


680

Other income, net


(7)










(7)

Interest expense


167


(30)

(a)







137

Interest income


(5)










(5)















Income before income taxes


563


30


7


(54)


9


555

Provision for income taxes


184


12

(e)

1

(e)

(13)

(e)

3

(e)

187















Net income


$ 379


$ 18


$ 6


$ (41)


$ 6


$ 368















Earnings per share














Basic


$ 2.13


$ 0.10


$ 0.04


$ (0.23)


$ 0.03


$ 2.08


Diluted


2.05


0.10


0.03


(0.22)


0.03


2.00















Weighted average shares outstanding














Basic


178


178


178


178


178


178


Diluted


185


185


185


185


185


185

__________













Note: EPS amounts may not foot due to rounding.

(a) Relates to costs incurred for the early extinguishment of the Company's term loan facility and revolving foreign credit facility during March 2010 and the early repurchase of a portion of the Company's 3.50% convertible notes during the third and fourth quarters of 2010.

(b) Relates to costs incurred in connection with the Company's acquisitions of Hoseasons during March 2010, the Tryp hotel brand during June 2010, ResortQuest during September 2010 and James Villa Holidays during November 2010.

(c) Relates to the net benefit from the resolution of and adjustment to certain contingent liabilities and assets primarily related to the accrual that was no longer needed for outstanding Cendant contingent tax liabilities since Cendant and the IRS agreed to settle the IRS examination of Cendant's taxable years 2003 through 2006 on July 15, 2010.

(d) Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2010.

(e) Relates to the tax effect of the adjustments.










Table 8










(3 of 3)











Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)














Twelve Months Ended December 31, 2009
















Legacy

Adjustments


Restructuring

Costs






As Reported




As Adjusted

Net revenues










Service fees and membership


$ 1,613






$ 1,613


Vacation ownership interest sales


1,053






1,053


Franchise fees


440






440


Consumer financing


435






435


Other


209






209

Net revenues


3,750


-


-


3,750











Expenses










Operating


1,501






1,501


Cost of vacation ownership interests


183






183


Consumer financing interest


139






139


Marketing and reservation


560






560


General and administrative


533


(6)

(a)



527


Goodwill and other impairments


15






15


Restructuring costs


47




(46)

(b)

1


Depreciation and amortization


178






178

Total expenses


3,156


(6)


(46)


3,104











Operating income


594


6


46


646

Other income, net


(6)






(6)

Interest expense


114






114

Interest income


(7)






(7)











Income before income taxes


493


6


46


545

Provision for income taxes


200


-

(c)

18

(c)

218











Net income


$ 293


$ 6


$ 28


$ 327











Earnings per share










Basic


$ 1.64


$ 0.03


$ 0.16


$ 1.83


Diluted


1.61


0.03


0.16


1.80











Weighted average shares outstanding










Basic


179


179


179


179


Diluted


182


182


182


182

__________









(a) Relates to the net expense from the resolution of and adjustment to certain contingent liabilities and assets.

(b) Relates to costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

(c) Relates to the tax effect of the adjustments.

Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)


FREE CASH FLOW

The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, equity investments and development advances, excluding cash payments related to the Company's contingent tax liabilities that it assumed and is responsible for pursuant to its separation from Cendant. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, equity investments and hotel development advances, can be used for strategic opportunities, including making acquisitions, paying dividends, repurchasing the Company's common stock and strengthening the balance sheet. Analysis of free cash flow also facilitates management's comparisons of the Company's operating results to its competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period.


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:










Twelve Months Ended December 31,





2010


2009










Net cash provided by operating activities


$ 635


$ 689



Less: Property and equipment additions


(167)


(135)



Less: Equity investments and development advances


(10)


(13)



Plus: Cash payments related to contingent tax liabilities


145


-



Free cash flow


$ 603


$ 541

















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







2010


Q1

Q2

Q3

Q4

Full Year








Gross VOI sales


$ 308

$ 371

$ 412

$ 373

$ 1,464

Less: Sales under the WAAM


(5)

(13)

(20)

(14)

(51)

Gross VOI sales, net of WAAM 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








2009














Gross VOI sales


$ 280

$ 327

$ 366

$ 343

$ 1,315

Plus: Net effect of percentage-of-completion accounting


67

37

36

47

187

Less: Loan loss provision


(107)

(122)

(117)

(103)

(449)

Vacation ownership interest sales


$ 239

$ 242

$ 285

$ 287

$ 1,053








2008














Gross VOI sales


$ 458

$ 532

$ 566

$ 432

$ 1,987

Plus/(less): Net effect of percentage-of-completion accounting


(82)

(5)

(2)

14

(75)

Less: Loan loss provision


(82)

(113)

(119)

(136)

(450)

Vacation ownership interest sales


$ 294

$ 414

$ 446

$ 309

$ 1,463








2007














Gross VOI sales


$ 430

$ 523

$ 552

$ 488

$ 1,993

Plus/(less): Net effect of percentage-of-completion accounting


4

(5)

1

(21)

(22)

Less: Loan loss provision


(61)

(75)

(86)

(84)

(305)

Vacation ownership interest sales


$ 373

$ 443

$ 467

$ 383

$ 1,666

_____________







Note: Amounts may not foot due to rounding.





















The following represents tele-sales upgrades, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):










Q1

Q2

Q3

Q4

Full Year








2010


$ 15

$ 7

$ 3

$ 3

$ 29

2009


$ 24

$ 23

$ 29

$ 28

$ 104

2008


$ 33

$ 35

$ 49

$ 40

$ 156

2007


$ 44

$ 37

$ 39

$ 36

$ 157

_____________







Note: Amounts may not foot across due to rounding.







SOURCE Wyndham Worldwide Corporation