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Wyndham Worldwide Reports Strong First Quarter 2011 Earnings

Results Exceed Expectations
Announces $500 Million Increase in Share Repurchase Program
Increases EPS Guidance

PARSIPPANY, N.J., April 27, 2011 /PRNewswire via COMTEX/ --

Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended March 31, 2011.

Highlights:

  • First quarter 2011 adjusted diluted earnings per share (EPS) was $0.44, compared with $0.34 in the first quarter of 2010, an increase of 29%. First quarter 2011 reported diluted EPS was $0.41, an increase of 52%, compared with the same period in 2010.
  • Free cash flow increased 11% to $185 million for the quarter ended March 31, 2011, compared with $166 million during the same period in 2010. The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances.
  • Year-to-date, the Company repurchased approximately 8.2 million shares of its common stock at an average price of $31.01 for approximately $255 million.
  • The Company announced today that its Board of Directors approved a $500 million increase to the share repurchase authorization.
  • The Company is increasing its full-year adjusted EPS guidance from a range of $2.05 - $2.15 to a range of $2.15 - $2.25 based on a diluted share count of 173 million.

"We are pleased to report that 2011 started as 2010 ended, with strong operating performance and accelerating earnings per share growth," said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. "We delivered strong operating performance across all our businesses and are confident in the sustainability of our growth and cash flow. Our confidence in growth and cash flow generation is reflected in our substantial share repurchase activity so far this year, the significant increase in our share repurchase program, as well as the previously announced 25% increase in our dividend for 2011."

FIRST QUARTER 2011 OPERATING RESULTS

First quarter revenues increased 7.4% from the prior year period to $952 million. The revenue growth reflects continued sales momentum across the Company's three business units and incremental contributions from acquisitions.

For the first quarter of 2011, adjusted net income increased by 23% to $79 million, or $0.44 per diluted share compared with $64 million, or $0.34 per diluted share for the same period in 2010. The increase reflects strong operational performance by the Company's three business units. Adjusted net income for the first quarter of 2011 excludes a $7 million after-tax charge related to the repurchase of a portion of the Company's convertible notes and an $8 million after-tax non-cash impairment charge related to a write-down of an international joint venture in the Company's hotel business. These were partially offset by an $8 million after-tax benefit related to the resolution of certain contingent liabilities and assets.

First quarter 2011 reported net income grew 44% to $72 million, or $0.41 per diluted share, compared with net income of $50 million, or $0.27 per diluted share, for the first quarter of 2010.

Free cash flow increased 11% to $185 million for the quarter ended March 31, 2011, compared with $166 million during the same period in 2010. The growth in free cash flow reflects higher cash earnings and more efficient working capital utilization. For the quarter ended March 31, 2011, cash provided by operating activities was $229 million, compared with $205 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $149 million in the first quarter of 2011, an increase of 3%, compared with the first quarter of 2010, reflecting a RevPAR increase of 7.4%, or 6.4% in constant currency, and incremental revenues related to the TRYP hotel brand.

First quarter 2011 adjusted EBITDA was $40 million, an increase of 21%, compared with the first quarter of 2010, primarily as a result of the RevPAR improvement and lower costs. Adjusted EBITDA excludes a $13 million impairment charge related to the write-down of an investment in an international joint venture in the Company's hotel business.

As of March 31, 2011, the Company's hotel system consisted of approximately 7,190 properties and 609,600 rooms. The development pipeline included approximately 830 hotels and over 102,000 rooms, of which 57% were new construction and 57% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $356 million in the first quarter of 2011, an increase of 19% compared with the first quarter of 2010, reflecting overall strength in vacation rentals and incremental revenues from acquisitions.

Exchange revenues were $194 million, an increase of 3%, compared with the first quarter of 2010. In constant currency, exchange revenues increased 2%, reflecting a modest increase in both exchange revenue per member and the average number of members.

Vacation rental revenues were $150 million, which included $25 million of incremental revenues related to acquisitions, compared with $105 million in the first quarter of 2010. Excluding the impact of the incremental revenues from acquisitions, net revenues generated from rental transactions and related services increased 19%, reflecting strong performance in the German rental market.

Excluding $4 million of acquisition costs in the first quarter of 2010, first quarter of 2011 EBITDA increased 11% compared with adjusted EBITDA of $84 million in the prior-year period, reflecting increases in vacation rental volume and average net price per rental.

Vacation Ownership (Wyndham Vacation Ownership)

Gross Vacation Ownership Interest (VOI) sales were $319 million in the first quarter of 2011, up 4% from the first quarter of 2010, reflecting an 11% increase in tour flow, partially offset by a 6% decrease in volume per guest. The changes in tour flow and volume per guest reflect the Company's focus on increasing sales to new owners.

Total segment revenues were $450 million in the first quarter of 2011, compared with $444 million in the first quarter of 2010, reflecting incremental commission revenues under the Wyndham Asset Affiliation Model (WAAM) and a lower provision for loan losses.

Adjusted EBITDA for the first quarter of 2011 increased 17% to $96 million, compared with EBITDA of $82 million in the first quarter of 2010. This EBITDA increase reflected growth in the property management business and the lower provision for loan losses. Results were also impacted by lower sales commission expenses and the absence of a litigation charge in the first quarter 2011 that was incurred in the first quarter 2010.

Other Items

  • The Company repurchased approximately 5.7 million shares of its common stock during the first quarter of 2011 at an average price of $30.62 and an additional 2.5 million shares at an average price of $31.84 through April 26, 2011.
  • During the first quarter of 2011, the Company repurchased approximately 85% of its outstanding convertible notes, principally resulting from the completion of a cash tender offer.
  • Net interest expense in the first quarter of 2011 was $42 million. Net interest includes $12 million of costs associated with the repurchase of a portion of the Company's convertible notes, which is excluded from adjusted net income.

Balance Sheet Information as of March 31, 2011:

  • Cash and cash equivalents of approximately $175 million, compared with approximately $155 million from December 31, 2010.
  • Vacation ownership contract receivables, net, of $2.9 billion, compared with $3.0 billion at December 31, 2010.
  • Vacation ownership and other inventory of approximately $1.2 billion, unchanged from December 31, 2010.
  • Securitized vacation ownership debt of $1.8 billion, compared with $1.7 billion at December 31, 2010.
  • Other debt of $2.0 billion, compared with $2.1 billion at December 31, 2010. The remaining borrowing capacity on the revolving credit facility was $962 million, compared with $788 million as of December 31, 2010.

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

Outlook

The Company is increasing full-year 2011 adjusted EPS guidance from $2.05 - $2.15 to $2.15 - $2.25, based on a diluted share count of 173 million.

The Company reiterates full-year 2011 guidance:

  • 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, asset impairments, 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, April 27, 2011 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 April 27, 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 EDT on April 27, 2011, at (866) 509-3896.

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 services and products across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Worldwide encompasses approximately 7,360 franchised hotels and vacation ownership resorts with approximately 630,300 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 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 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 22, 2011. 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 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 for the three months ended March 31, 2011 and 2010:




Three Months Ended March 31,



2011


2010



Net Revenues


EBITDA


Net Revenues


EBITDA


Lodging

$ 149


$ 27

(c)

$ 144


$ 33


Vacation Exchange and Rentals

356


93


300


80

(f)

Vacation Ownership

450


97

(d)

444


82


Total Reportable Segments

955


217


888


195


Corporate and Other (a) (b)

(3)


(14)


(2)


(20)


Total Company

$ 952


$ 203


$ 886


$ 175











Reconciliation of EBITDA to Net Income


















EBITDA



$ 203




$ 175


Depreciation and amortization



45




44


Interest expense



44

(e)



50

(g)

Interest income



(2)




(1)


Income before income taxes



116




82


Provision for income taxes



44




32


Net income



$ 72




$ 50











__________









(a) Includes the elimination of transactions between segments.

(b) Includes $11 million of a net benefit and $2 million of a net expense during the three months ended March 31, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation.

(c) Includes a non-cash impairment charge of $13 million to reduce the value of an international joint venture in the Company's hotel business.

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

(e) Includes $12 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the first quarter of 2011.

(f) Includes $4 million related to costs incurred in connection with the Company's acquisition of Hoseasons during March 2010.

(g) Includes $16 million of costs incurred for the early extinguishment of the Company's revolving foreign credit facility and term loan facility during March 2010.


The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended March 31, 2011 and 2010 (for a description of adjustments by segment, see Table 7):



Three Months Ended March 31,



2011


2010





Adjusted




Adjusted



Net Revenues


EBITDA


Net Revenues


EBITDA


Lodging

$ 149


$ 40


$ 144


$ 33


Vacation Exchange and Rentals

356


93


300


84


Vacation Ownership

450


96


444


82


Total Reportable Segments

955


229


888


199


Corporate and Other

(3)


(25)


(2)


(18)


Total Company

$ 952


$ 204


$ 886


$ 181


Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)





Three Months Ended





March 31,





2011


2010


Net revenues







Service and membership fees


$ 495


$ 424



Vacation ownership interest sales


222


217



Franchise fees


101


92



Consumer financing


102


105



Other


32


48


Net revenues


952


886









Expenses







Operating


411


381

(a)


Cost of vacation ownership interests


32


36



Consumer financing interest


23


24



Marketing and reservation


137


123



General and administrative (b)


140


148



Asset impairment


13

(c)

-



Restructuring


(1)

(d)

-



Depreciation and amortization


45


44


Total expenses


800


756









Operating income


152


130


Other income, net


(6)

(e)

(1)


Interest expense


44

(f)

50

(g)

Interest income


(2)


(1)









Income before income taxes


116


82


Provision for income taxes


44


32









Net income


$ 72


$ 50









Earnings per share







Basic


$ 0.42


$ 0.28



Diluted


0.41


0.27









Weighted average shares outstanding







Basic


173


179



Diluted


179


186


__________






(a) Includes $4 million relating to costs incurred in connection with the Company's acquisition of Hoseasons during March 2010.

(b) Includes $7 million of a net benefit and $2 million of a net expense during the three months ended March 31, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation.

(c) Represents a non-cash impairment charge to reduce the value of an international joint venture in the Company's hotel business.

(d) Reflects the reversal of costs incurred as a result of various strategic initiatives commenced by the Company during 2008.

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

(f) Includes $12 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the first quarter of 2011.

(g) 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.

Table 3

(1 of 3)

Wyndham Worldwide Corporation

OPERATING STATISTICS



Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Rooms

2011

609,600

N/A

N/A

N/A

N/A


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









RevPAR

2011

$ 27.71

N/A

N/A

N/A

N/A


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








Vacation Exchange and Rentals








Average Number of Members (in 000s)

2011

3,766

N/A

N/A

N/A

N/A


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









Exchange Revenue Per Member

2011

$ 205.64

N/A

N/A

N/A

N/A


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









Vacation Rental Transactions (in 000s) (b)

2011

398

N/A

N/A

N/A

N/A


2010

291

297

322

253

1,163


2009

273

231

264

196

964


2008

269

220

255

191

936









Average Net Price Per Vacation Rental (b)

2011

$ 377.71

N/A

N/A

N/A

N/A


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








Vacation Ownership








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

2011

$ 319,000

N/A

N/A

N/A

N/A


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









Tours (d)

2011

137,000

N/A

N/A

N/A

N/A


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









Volume Per Guest (VPG) (d)

2011

$ 2,192

N/A

N/A

N/A

N/A


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








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)

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.

(c)

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).

(d)

Includes the impact of WAAM related tours beginning in the first quarter of 2010.


Table 3

(2 of 3)


Wyndham Worldwide Corporation

ADDITIONAL DATA







Year

Q1

Q2

Q3

Q4

Full Year

Lodging (a)








Number of Properties

2011

7,190

N/A

N/A

N/A

N/A






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












Vacation Ownership








Deferred Revenues (in 000s) (b)

2011

$ -

N/A

N/A

N/A

N/A






2010

$ -

$ -

$ -

$ -

$ -






2009

$ 67,000

$ 37,000

$ 36,000

$ 47,000

$ 187,000






2008

$ (82,000)

$ (5,000)

$ (2,000)

$ 14,000

$ (75,000)













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

2011

$ 79,000

N/A

N/A

N/A

N/A






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













Sales under WAAM (in 000s) (d)

2011

$ 18,000

N/A

N/A

N/A

N/A






2010

$ 5,000

$ 13,000

$ 20,000

$ 14,000

$ 51,000













WAAM Commission Revenues (in 000s)

2011

$ 10,000

N/A

N/A

N/A

N/A


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 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)

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



Vacation Rental Transactions: Represents the number of transactions that are generated in connection with customers booking their vacation rental stays through us. One rental transaction is recorded 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)



2011


2010



Q1

Q2

Q3

Q4

Year


Q1

Q2

Q3

Q4

Year

Lodging













Royalties and Franchise Fees

$ 58

N/A

N/A

N/A

N/A


$ 52

$ 69

$ 82

$ 62

$ 265


Marketing, Reservation and Wyndham Rewards Revenues (a)

54

N/A

N/A

N/A

N/A


50

65

76

60

251


Hotel Management Reimbursable Revenues (b)

19

N/A

N/A

N/A

N/A


21

20

18

18

77


Ancillary Revenues (c)

18

N/A

N/A

N/A

N/A


21

24

27

23

95


Total Lodging

149

N/A

N/A

N/A

N/A


144

178

203

163

688














Vacation Exchange and Rentals













Exchange Revenues

194

N/A

N/A

N/A

N/A


189

161

163

153

666


Rental Revenues

150

N/A

N/A

N/A

N/A


105

115

161

114

495


Ancillary Revenues (d)

12

N/A

N/A

N/A

N/A


6

5

6

15

32


Total Vacation Exchange and Rentals

356

N/A

N/A

N/A

N/A


300

281

330

282

1,193














Vacation Ownership













Vacation Ownership Interest Sales

222

N/A

N/A

N/A

N/A


217

271

308

276

1,072


Consumer Financing

102

N/A

N/A

N/A

N/A


105

106

107

107

425


Property Management Fees

110

N/A

N/A

N/A

N/A


100

100

104

101

405


WAAM Commissions

10

N/A

N/A

N/A

N/A


3

8

12

8

31


Ancillary Revenues (e)

6

N/A

N/A

N/A

N/A


19

20

2

5

46


Total Vacation Ownership

450

N/A

N/A

N/A

N/A


444

505

533

497

1,979

Total Reportable Segments

$ 955

N/A

N/A

N/A

N/A


$ 888

$ 964

$ 1,066

$ 942

$ 3,860





























2009


2008



Q1

Q2

Q3

Q4

Year


Q1

Q2

Q3

Q4

Year

Lodging













Royalties and Franchise Fees

$ 57

$ 68

$ 72

$ 57

$ 254


$ 64

$ 78

$ 88

$ 66

$ 297


Marketing, Reservation and Wyndham Rewards Revenues (a)

54

66

73

53

246


60

75

84

61

280


Hotel Management Reimbursable Revenues (b)

22

23

21

19

85


27

26

25

21

100


Ancillary Revenues (c)

21

17

17

20

75


19

21

16

22

76


Total Lodging

154

174

183

149

660


170

200

213

170

753














Vacation Exchange and Rentals













Exchange Revenues

185

165

164

154

668


213

185

178

152

728


Rental Revenues

96

109

157

98

460


119

119

169

88

495


Ancillary Revenues (d)

6

6

6

6

24


9

10

7

10

36


Total Vacation Exchange and Rentals

287

280

327

258

1,152


341

314

354

250

1,259














Vacation Ownership













Vacation Ownership Interest Sales

239

242

285

287

1,053


294

414

446

309

1,463


Consumer Financing

109

109

108

109

435


99

104

111

112

426


Property Management Fees

91

94

96

95

376


85

84

89

89

346


Ancillary Revenues (e)

23

22

19

17

81


26

19

15

(18)

43


Total Vacation Ownership

462

467

508

508

1,945


504

621

661

492

2,278

Total Reportable Segments

$ 903

$ 921

$ 1,018

$ 915

$ 3,757


$ 1,015

$ 1,135

$ 1,228

$ 912

$ 4,290



























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)




March31,2011


December31,2010


September30,2010


June30,2010


March31,2010


Securitized vacation ownership debt (a)











Term notes


$ 1,666


$ 1,498


$ 1,400


$ 1,255


$ 1,258

Bank conduit facility (b)


148


152


215


291


240

Securitized vacation ownership debt (c)


1,814


1,650


1,615


1,546


1,498

Less: Current portion of securitized vacation ownership debt


216


223


187


248


220

Long-term securitized vacation ownership debt


$ 1,598


$ 1,427


$ 1,428


$ 1,298


$ 1,278












Debt:











Revolving credit facility (due October 2013) (d)


$ 5


$ 154


$ 26


$ -


$ 199

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


797


798


798


798


798

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


241


241


240


239


239

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


41


266


289


362


448

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


247


247


247


247


247

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


247


247


247


-


-

5.625% senior unsecured notes (due March 2021) (j)


245


-


-


-


-

Vacation rentals capital leases


120


115


120


110


123

Other


28


26


34


36


28

Total debt


1,971


2,094


2,001


1,792


2,082

Less: Current portion of debt


12


11


32


29


23

Long-term debt


$ 1,959


$ 2,083


$ 1,969


$ 1,763


$ 2,059

__________











(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 March 31, 2011, our 364-day facility has remaining borrowing capacity of $452 million.

(c) This debt is collateralized by $2,778 million, $2,865 million, $2,874 million, $2,862 million and $2,712 million of underlying vacation ownership contract receivables and related assets as of March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.

(d) 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. During the first quarter of 2011, the total capacity was further increased to $980 million. As of March 31, 2011, the Company has $13 million of outstanding letters of credit and a remaining borrowing capacity of $962 million.

(e) Represents senior unsecured notes issued by the Company during December 2006. The balance as of March 31, 2011 represents $800 million aggregate principal less $2 million of unamortized discount and a $1 million fair value hedge derivative.

(f) Represents senior unsecured notes issued by the Company during May 2009. The balance as of March 31, 2011 represents $250 million aggregate principal less $9 million of unamortized discount.

(g) 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. During the first quarter of 2011, the Company repurchased a portion of its outstanding 3.50% convertible notes, primarily through the completion of a cash tender offer. The following table details the components of the convertible notes:




March 31, 2011


December 31, 2010


September 30, 2010


June 30, 2010


March 31, 2010


Debt principal


$ 17


$ 116


$ 138


$ 230


$ 230

Unamortized discount


(1)


(12)


(17)


(31)


(35)

Debt less discount


16


104


121


199


195

Fair value of conversion feature (*)


25


162


168


163


253

Convertible notes


$ 41


$ 266


$ 289


$ 362


$ 448












(*) 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.


(h) Represents senior unsecured notes issued by the Company during February 2010. The balance as of March 31, 2011 represents $250 million aggregate principal less $3 million of unamortized discount.

(i) Represents senior unsecured notes issued by the Company during September 2010. The balance as of March 31, 2011 represents $250 million aggregate principal less $3 million of unamortized discount.

(j) Represents senior unsecured notes issued by the Company during March 2011. The balance as of March 31, 2011 represents $250 million aggregate principal less $5 million of unamortized discount.

Table 6


Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS



As of and For the Three Months Ended March 31, 2011

Brand

Number of Properties

Number of Rooms

Average Occupancy Rate

Average Daily Rate (ADR)

Average Revenue Per Available Room (RevPAR)


Lodging






Wyndham Hotels and Resorts

94

25,521

53.3%

$106.57

$56.84








Tryp by Wyndham

92

13,420

48.3%

$111.27

$53.75








Wingate by Wyndham

165

15,134

55.8%

$78.31

$43.68








Hawthorn Suites by Wyndham

75

7,028

57.6%

$74.22

$42.73








Ramada

888

117,278

45.4%

$73.37

$33.30








Baymont

261

21,886

41.2%

$59.02

$24.33








Days Inn

1,877

150,214

40.5%

$58.19

$23.58








Super 8

2,185

137,260

43.9%

$51.41

$22.56








Howard Johnson

464

46,080

41.1%

$57.28

$23.56








Travelodge

434

31,920

40.8%

$59.70

$24.34








Microtel Inns & Suites

316

22,528

46.3%

$55.03

$25.46








Knights Inn

339

20,679

33.7%

$40.75

$13.74








Dream

3

566

73.1%

$177.95

$130.02








Night

1

72

93.8%

$298.78

$280.20









Total Lodging

7,194

609,586

43.5%

$63.66

$27.71








Vacation Ownership






Wyndham Vacation Ownership resorts

162

20,736

N/A

N/A

N/A









Total Wyndham Worldwide

7,356

630,322







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


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

94

25,140

51.2%

$112.88

$57.74








Wingate by Wyndham

164

15,020

51.8%

$77.42

$40.09








Hawthorn Suites by Wyndham

87

8,106

49.2%

$76.99

$37.89








Ramada

899

117,555

43.2%

$72.76

$31.42








Baymont

242

20,529

41.3%

$57.68

$23.83








Days Inn

1,860

149,770

38.7%

$57.80

$22.36








Super 8

2,134

132,910

41.1%

$52.93

$21.76








Howard Johnson

489

46,588

38.8%

$57.69

$22.37








Travelodge

452

33,604

38.1%

$61.40

$23.39








Microtel Inns & Suites

317

22,550

43.5%

$54.99

$23.94








Knights Inn

347

21,155

33.1%

$38.94

$12.89








Other

2

404

N/A

N/A

N/A









Total Lodging

7,087

593,331

41.1%

$62.78

$25.81








Vacation Ownership






Wyndham Vacation Ownership resorts

159

20,559

N/A

N/A

N/A









Total Wyndham Worldwide

7,246

613,890




_______________

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

NON-GAAP RECONCILIATION

(In millions)





Reported

Legacy

Asset

Restructuring

Adjusted

Three months ended March 31, 2011


Net Revenues


EBITDA

Adjustments (b)

Impairment (c)

Costs (d)

EBITDA

Lodging


$ 149


$ 27

$ -

$ 13

$ -

$ 40

Vacation Exchange and Rentals


356


93

-

-

-

93

Vacation Ownership


450


97

-

-

(1)

96

Total Reportable Segments


955


217

-

13

(1)

229

Corporate and Other (a)


(3)


(14)

(11)

-

-

(25)

Total Company


$ 952


$ 203

$ (11)

$ 13

$ (1)

$ 204











________________

(a) Includes the elimination of transactions between segments.

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

(c) Relates to a non-cash impairment charge to reduce the value of an international joint venture in the Company's hotel business.

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

Table 7

(2 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 resulting from our separation.

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

Table 8

(1 of 2)


Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





Three Months Ended March 31, 2011


















As Reported


Early

Extinguishment of

Debt


Legacy Adjustments


Asset Impairment


Restructuring Costs


As Adjusted















Net revenues














Service fees and membership


$ 495










$ 495


Vacation ownership interest sales


222










222


Franchise fees


101










101


Consumer financing


102










102


Other


32










32

Net revenues


952


-


-


-


-


952















Expenses














Operating


411










411


Cost of vacation ownership interests


32










32


Consumer financing interest


23










23


Marketing and reservation


137










137


General and administrative


140




7

(b)





147


Asset impairment


13






(13)

(d)



-


Restructuring


(1)








1

(e)

-


Depreciation and amortization


45










45

Total expenses


800


-


7


(13)


1


795















Operating income


152


-


(7)


13


(1)


157

Other income, net


(6)




4

(c)





(2)

Interest expense


44


(12)

(a)







32

Interest income


(2)










(2)















Income before income taxes


116


12


(11)


13


(1)


129

Provision for income taxes


44


5

(f)

(3)

(f)

5

(f)

(1)

(f)

50















Net income


$ 72


$ 7


$ (8)


$ 8


$ -


$ 79















Earnings per share














Basic


$ 0.42


$ 0.04


$ (0.04)


$ 0.04


$ -


$ 0.46


Diluted


0.41


0.04


(0.04)


0.04


-


0.44















Weighted average shares outstanding














Basic


173


173


173


173


173


173


Diluted


179


179


179


179


179


179

__________

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 first quarter of 2011.

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

(c) Relates to a gain on the redemption of a preferred stock investment allocated to the Company in connection with our separation.

(d) Relates to a non-cash impairment charge to reduce the value of an international joint venture in the Company's hotel business.

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

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

Table 8

(2 of 2)


Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)





Three Months Ended March 31, 2010





As Reported


Early

Extinguishment

of Debt


Acquisition Costs


Legacy Adjustments


As Adjusted













Net revenues












Service fees and membership


$ 424








$ 424


Vacation ownership interest sales


217








217


Franchise fees


92








92


Consumer financing


105








105


Other


48








48

Net revenues


886


-


-


-


886













Expenses












Operating


381




(4)

(b)



377


Cost of vacation ownership interests


36








36


Consumer financing interest


24








24


Marketing and reservation


123








123


General and administrative


148






(2)

(c)

146


Depreciation and amortization


44








44

Total expenses


756


-


(4)


(2)


750













Operating income


130


-


4


2


136

Other income, net


(1)








(1)

Interest expense


50


(16)

(a)





34

Interest income


(1)








(1)













Income before income taxes


82


16


4


2


104

Provision for income taxes


32


6

(d)

1

(d)

1

(d)

40













Net income


$ 50


$ 10


$ 3


$ 1


$ 64













Earnings per share












Basic


$ 0.28


$ 0.05


$ 0.02


$ 0.01


$ 0.36


Diluted


0.27


0.05


0.02


0.01


0.34













Weighted average shares outstanding












Basic


179


179


179


179


179


Diluted


186


186


186


186


186

__________

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.

(b) Relates to costs incurred in connection with the Company's acquisition of Hoseasons during March 2010.

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

(d) 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:










Three Months Ended March 31,





2011


2010










Net cash provided by operating activities


$ 229


$ 205



Less: Property and equipment additions


(41)


(36)



Less: Equity investments and development advances


(3)


(3)



Free cash flow


$ 185


$ 166











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







2011


Q1

Q2

Q3

Q4

Full Year








Gross VOI sales


$ 319

N/A

N/A

N/A

N/A

Less: Sales under the WAAM


(18)

N/A

N/A

N/A

N/A

Gross VOI sales, net of WAAM sales


302

N/A

N/A

N/A

N/A

Less: Loan loss provision


(79)

N/A

N/A

N/A

N/A

Vacation ownership interest sales


$ 222

N/A

N/A

N/A

N/A








2010














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

_____________

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








2011


$ 18

N/A

N/A

N/A

N/A

2010


$ 20

$ 20

$ 23

$ 17

$ 80

2009


$ 24

$ 23

$ 29

$ 28

$ 104

2008


$ 33

$ 35

$ 49

$ 40

$ 156

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Note: Amounts may not foot across due to rounding.

SOURCE Wyndham Worldwide Corporation