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  Wyndham Reports 2nd Qtr 2011 Adjusted Net Income of $108 million, Up from
$95 million for Same Period 2010; RevPAR Increased 9.7%

 

PARSIPPANY, N.J., July 27, 2011-- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2011.

Highlights:

  • Second quarter 2011 adjusted diluted earnings per share (EPS) was $0.64, compared with $0.51 in the second quarter of 2010, an increase of 25%. Second quarter 2011 reported diluted EPS was $0.67, an increase of 31%, compared with the same period in 2010.
  • Free cash flow increased 22% to $595 million for the first half, compared with $486 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.
  • During the quarter, the Company repurchased approximately 6.2 million shares of its common stock at an average price of $32.50 for $200 million.
  • The Company is increasing its full-year adjusted EPS guidance from a range of $2.15$2.25 to a range of $2.32$2.40 based on a diluted share count of 171 million.

"Wyndham Worldwide once again delivered strong results across all three of our businesses, which are each well-positioned to deliver profit growth in the future," said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. "In addition, we continue to generate significant and growing levels of sustainable free cash flow that we are deploying to drive shareholder value."

SECOND QUARTER 2011 OPERATING RESULTS

Second quarter revenues increased 13% from the prior year period to $1.1 billion. The revenue growth reflects strong RevPAR growth of 9.7% in our hotel business, contributions from acquisitions of vacation rental businesses and higher sales in the vacation ownership business.

For the second quarter of 2011, adjusted net income increased to $108 million, compared with $95 million in the second quarter of 2010. On a per share basis, adjusted net income grew 25% to $0.64 per diluted share, compared with the same period in 2010. The increase reflects strong operational performance by the Company's three business units and the significant benefit from the Company's share repurchase program, partially offset by higher tax rates compared with the second quarter of 2010. Adjusted net income for the second quarter of 2011 excludes an after-tax net benefit of $13 million related to a refund of value added taxes. This was partially offset by $5 million of after-tax costs related to a previously announced restructuring of call centers at the Company's vacation exchange and rentals business and a $2 million after-tax expense related to the resolution of certain contingent liabilities and assets.

Including the above adjustments, second quarter 2011 net income grew 20% to $114 million, or $0.67 per diluted share, compared with net income of $95 million, or $0.51 per diluted share, for the second quarter of 2010.

Free cash flow increased 22% to $595 million for the first half, compared with $486 million during the same period in 2010. The growth in free cash flow reflects higher cash earnings, more efficient working capital utilization and a refund of value added taxes. For the first half, cash provided by operating activities was $696 million, compared with $557 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $190 million in the second quarter of 2011, an increase of 7%, compared with the second quarter of 2010, reflecting a RevPAR increase and incremental revenues related to the acquisition of the TRYP hotel brand in June of 2010.

In the second quarter of 2011 system-wide RevPAR increased 9.7%. Excluding the impact of the TRYP by Wyndham hotel brand and in constant currency, the increase was 5.8%.

Second quarter 2011 EBITDA was $66 million, an increase of 32%, compared with second quarter 2010 adjusted EBITDA, primarily as a result of the RevPAR improvement and lower bad debt expense.

As of June 30, 2011, the Company's hotel system consisted of approximately 7,220 properties and 612,900 rooms. The development pipeline included over 840 hotels and approximately 111,000 rooms, of which 58% were new construction. International rooms accounted for 64% of the development pipeline.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $361 million in the second quarter of 2011, an increase of 28% compared with the second quarter of 2010, reflecting incremental revenues from acquisitions and the favorable impact from foreign currency.

Exchange revenues were $168 million, an increase of 4%, compared with the second quarter of 2010. In constant currency, exchange revenues increased 2%, reflecting a 1% increase in exchange revenue per member. The average number of members remained relatively flat.

Vacation rental revenues were $180 million, which included $46 million of incremental revenues related to acquisitions, compared with $115 million in the second quarter of 2010. In constant currency, excluding the impact of the incremental revenues from acquisitions, net revenues generated from rental transactions and related services increased 3%, reflecting a 5% increase in the average net price per vacation rental, partially offset by a 1% decline in rental transaction volume.

Adjusted EBITDA for the second quarter of 2011 was $82 million, a 5% increase compared with $78 million in the prior year period. The increase reflects incremental contributions from acquisitions. Second quarter 2011 adjusted EBITDA excludes a net benefit of $31 million related to a refund of value added taxes and $7 million of costs related to a previously announced restructuring initiative.

Vacation Ownership (Wyndham Vacation Ownership)

Gross Vacation Ownership Interest (VOI) sales were $412 million in the second quarter of 2011, up 11% from the second quarter of 2010, reflecting a 9% increase in tour flow and a 3% increase in volume per guest.

Total segment revenues were $541 million in the second quarter of 2011, compared with $505 million in the second quarter of 2010, reflecting the increase in gross VOI sales and a lower provision for loan losses.

EBITDA for the second quarter of 2011 increased 25% to $130 million, compared with EBITDA of $104 million in the second quarter of 2010. This EBITDA increase reflects the increase in VOI sales and the lower provision for loan losses.

Other Items

  • The Company repurchased approximately 6.2 million shares of its common stock during the second quarter of 2011 at an average price of $32.50 and an additional 1.5 million shares at an average price of $34.11 through July 26, 2011.
  • Net interest expense in the second quarter of 2011 was $35 million. Net interest includes $3 million of expenses related to value added tax accruals and $1 million of costs associated with the early repurchase of a portion of the Company's convertible notes, which are excluded from adjusted net income.
  • The Company previously announced the closing of a new $1 billion revolving credit facility with a maturity date of July 15, 2016 to replace its existing $980 million facility, which had been scheduled to mature in October 2013. There is no change to the Company's overall corporate debt balance as a result of this transaction.

Balance Sheet Information as of June 30, 2011:

  • Cash and cash equivalents of approximately $295 million, compared with approximately $155 million at 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 $1.1 billion, compared with $1.2 billion at December 31, 2010.
  • Securitized vacation ownership debt of $1.7 billion, unchanged from 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 $860 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 $2.15$2.25 to $2.32$2.40, based on a diluted share count of 171 million.

The Company is increasing full-year 2011 guidance:

  • Revenues from approximately $4.0$4.2 billion to approximately $4.2$4.3 billion
  • Adjusted EBITDA from approximately $925$955 million to approximately $960$975 million

The guidance reflects assumptions used for internal planning purposes. Guidance may exclude legacy items, restructuring costs, debt extinguishment, asset impairments, value added tax refunds 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 and EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to our financial results.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, July 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 July 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 July 27, 2011, at (866) 443-1216.

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 7,380 franchised hotels and vacation ownership resorts with approximately 633,700 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 Quarterly Report on Form 10-Q, filed with the SEC on April 29, 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

(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)




In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA," which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), 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 June 30, 2011 and 2010:





Three Months Ended June 30,




2011


2010




Net Revenues


EBITDA


Net Revenues


EBITDA



Lodging

$ 190


$ 66


$ 178


$ 49

(d)


Vacation Exchange and Rentals

361


106

(b)

281


78



Vacation Ownership

541


130


505


104



Total Reportable Segments

1,092


302


964


231



Corporate and Other (a)

(2)


(26)

(c)

(1)


(14)



Total Company

$ 1,090


$ 276


$ 963


$ 217













Reconciliation of EBITDA to Net Income




















EBITDA



$ 276




$ 217



Depreciation and amortization



45




42



Interest expense



37

(e)



36



Interest income



(2)




(2)



Income before income taxes



196




141



Provision for income taxes



82




46



Net income



$ 114




$ 95













__________










(a) Includes the elimination of transactions between segments.

(b) Includes (i) a $31 million net benefit resulting from a refund of value added taxes and (ii) $7 million of restructuring costs incurred in connection with a strategic initiative commenced by the Company during 2010.

(c) Includes $3 million of a net expense related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation.

(d) Includes $1 million related to costs incurred in connection with the Company's acquisition of the TRYP hotel brand during June 2010.

(e) Includes (i) $3 million of interest related to value added tax accruals and (ii) $1 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the second quarter of 2011.













The following tables summarize ne t revenues and Adjusted EBITDA for reportable segments for the three months ended June 30, 2011 and 2010 (for a description of adjustments by segment, see Table 7):





Three Months Ended June 30,




2011


2010




Net Revenues


Adjusted

EBITDA


Net Revenues


Adjusted

EBITDA



Lodging

$ 190


$ 66


$ 178


$ 50



Vacation Exchange and Rentals

361


82


281


78



Vacation Ownership

541


130


505


104



Total Reportable Segments

1,092


278


964


232



Corporate and Other

(2)


(23)


(1)


(14)



Total Company

$ 1,090


$ 255


$ 963


$ 218














Table 1

(2 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)




The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to net income for the six months ended June 30, 2011 and 2010:





Six Months Ended June 30,




2011


2010




Net Revenues


EBITDA


Net Revenues


EBITDA



Lodging

$ 339


$ 92

(c)

$ 322


$ 82

(f)


Vacation Exchange and Rentals

716


199

(d)

582


158

(g)


Vacation Ownership

992


227

(e)

950


186



Total Reportable Segments

2,047


518


1,854


426



Corporate and Other (a) (b)

(6)


(38)


(5)


(34)



Total Company

$ 2,041


$ 480


$ 1,849


$ 392













Reconciliation of EBITDA to Net Income




















EBITDA



$ 480




$ 392



Depreciation and amortization



90




85



Interest expense



81

(h)



86

(i)


Interest income



(3)




(2)



Income before income taxes



312




223



Provision for income taxes



126




78



Net income



$ 186




$ 145













__________










(a) Includes the elimination of transactions between segments.

(b) Includes $8 million of a net benefit and $1 million of a net expense during the six months ended June 30, 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 ch arge of $13 million to reduce the value of an international joint venture in the Company's hotel business.

(d) Includes (i) a $31 million net benefit resulting from a refund of value added taxes and (ii) $7 million of restructuring costs incurred in connection with a strategic initiative commenced by the Company during 2010.

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

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

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

(h) Includes (i) $12 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the first half of 2011 and (ii) $3 million of interest related to value added tax accruals.

(i) 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 following tables summarize net revenues and Adjusted EBITDA for reportable segments for the six months ended June 30, 2011 and 2010 (for a description of adjustments by segment, see Table 7):





Six Months Ended June 30,




2011


2010




Net Revenues


Adjusted

EBITDA


Net Revenues


Adjusted

EBITDA



Lodging

$ 339


$ 105


$ 322


$ 83



Vacation Exchange and Rentals

716


175


582


162



Vacation Ownership

992


226


950


186



Total Reportable Segments

2,047


506


1,854


431



Corporate and Other

(6)


(46)


(5)


(33)



Total Company

$ 2,041


$ 460


$ 1,849


$ 398














Table 2


Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)







Three Months Ended

June 30,


Six Months Ended

June 30,





2011


2010


2011


2010



Net revenues












Service and membership fees


$ 499


$ 409


$ 995


$ 833




Vacation ownership interest sales


313


271


535


488




Franchise fees


134


120


235


211




Consumer financing


103


106


206


211




Other


41


57


70


106



Net revenues


1,090


963


2,041


1,849














Expenses












Operating


458


387

(a)

868


769

(a)



Cost of vacation ownership interests


48


49


79


86




Consumer financing interest


23


29


46


53




Marketing and reservation


153


138


290


261




General and administrative (b)


126

(c)

146


266

(c)

293




Asset impairment


-


-


13

(d)

-




Restructuring


7

(e)

-


6

(f)

-




Depreciation and amortization


45


42


90


85



Total expenses


860


791


1,658


1,547














Operating income


230


172


383


302



Other income, net


(1)


(3)


(7)

(g)

(5)



Interest expense


37

(h)

36


81

(i)

86

(j)


Interest income


(2)


(2)


(3)


(2)














Income before income taxes


196


141


312


223



Provision for income taxes


82


46


126


78














Net income


$ 114


$ 95


$ 186


$ 145














Earnings per share












Basic


$ 0.68


$ 0.53


$ 1.10


$ 0.81




Diluted


0.67


0.51


1.07


0.78














Weighted average shares outstanding












Basic


167


180


170


180




Diluted


170


187


174


186



__________











(a) Includes $1 million during both the three and six months ended June 30, 2010 related to costs incurred in connection with the Company's June 2010 acquisition of the TRYP hotel brand. The six months ended June 30, 2010 also includes $4 million of costs incurred in connection with the Company's March 2010 acquisition of Hoseasons Holdings Ltd.

(b) Includes $3 million of a net expense during the three months ended June 30, 2011 and $4 million of a net benefit and $1 million of a net expense during the six months ended June 30, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation.

(c) Includes a $31 million net benefit resulting from a refund of value added taxes for both the three and six months ended June 30, 2011.

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

(e) Reflects costs incurred as a result of a strategic initiative commenced by the Company during 2010.

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

(g) The six months ended June 30, 2011, also includes $4 million of a gain related to the redemption of a preferred stock investment allocated to the Company in connection with our separation.

(h) Includes (i) $3 million of interest related to value added tax accruals and (ii) $1 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the second quarter of 2011.

(i) Includes (i) $12 million of costs incurred for the early repurchase of a portion of the Company's 3.50% convertible notes during the first half of 2011 and (ii) $3 million of interest related to non-U.S. value added tax accruals.

(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.















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

612,900

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

$ 35.38

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

3,755

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

$ 178.46

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

328

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

$ 549.09

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

$ 412,000

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

177,000

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

$ 2,227

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

7,220

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




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

$ 80,000

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

$ 19,000

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

$ 11,000

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 cons truction 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 for each standard one-week rental.


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


Vacation Ownership


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


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


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

$ 75

N/A

N/A

N/A


$ 52

$ 69

$ 82

$ 62

$ 265



Marketing, Reservation and Wyndham Rewards Revenues (a)

54

75

N/A

N/A

N/A


50

65

76

60

251



Hotel Management Reimbursable Revenues (b)

19

19

N/A

N/A

N/A


21

20

18

18

77



Ancillary Revenues (c)

18

21

N/A

N/A

N/A


21

24

27

23

95



Total Lodging

149

190

N/A

N/A

N/A


144

178

203

163

688
















Vacation Exchange and Rentals














Exchange Revenues

194

168

N/A

N/A

N/A


189

161

163

153

666



Rental Revenues

150

180

N/A

N/A

N/A


105

115

161

114

495



Ancillary Revenues (d)

12

13

N/A

N/A

N/A


6

5

6

15

32




Total Vacation Exchange and Rentals

356

361

N/A

N/A

N/A


300

281

330

282

1,193

















Vacation Ownership














Vacation Ownership Interest Sales

222

313

N/A

N/A

N/A


217

271

308

276

1,072



Consumer Financing

102

103

N/A

N/A

N/A


105

106

107

107

425



Property Management Fees

110

108

N/A

N/A

N/A


100

100

104

101

405



WAAM Commissions

10

11

N/A

N/A

N/A


3

8

12

8

31



Ancillary Revenues (e)

6

6

N/A

N/A

N/A


19

20

2

5

46



Total Vacation Ownership

450

541

N/A

N/A

N/A


444

505

533

497

1,979


Total Reportable Segments

$ 955

$ 1,092

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 and homeowners.

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

















Table 5

Wyndham Worldwide Corporation

SCHED ULE OF DEBT

(In millions)





June 30,

2011


March 31,

2011


December 31,
2010


September 30,
2010


June 30,

2010













Securitized vacation ownership debt (a)











Term notes

$ 1,446


$ 1,666


$ 1,498


$ 1,400


$ 1,255


Bank conduit facility (b)

242


148


152


215


291


Securitized vacation ownership debt (c)

1,688


1,814


1,650


1,615


1,546


Less: Current portion of securitized vacation ownership debt

190


216


223


187


248


Long-term securitized vacation ownership debt

$ 1,498


$ 1,598


$ 1,427


$ 1,428


$ 1,298













Debt:











Revolving credit facility (due October 2013) (d)

$ 107


$ 5


$ 154


$ 26


$ -


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

803


797


798


798


798


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

242


241


241


240


239


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

32


41


266


289


362


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


247


-


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

245


245


-


-


-


Vacation rentals capital leases

120


120


115


120


110


Other

1


28


26


34


36


Total debt

2,044


1,971


2,094


2,001


1,792


Less: Current portion of debt

43


12


11


32


29


Long-term debt

$ 2,001


$ 1,959


$ 2,083


$ 1,969


$ 1,763


__________











(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 non-recourse vacation ownership bank conduit facility with a term through June 2013 and borrowing capacity of $600 million. As of June 30, 2011, this facility has remaining borrowing capacity of $358 million.

(c) This debt is collateralized by $2,672 million, $2,778 million, $2,865 million, $2,874 million and $2,862 million of underlying vacation ownership contract receivables and related assets as of June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively.

(d) Represents a $980 million revolving credit facility that expires on October 1, 2013. As of June 30, 2011, the Company has $13 million of outstanding letters of credit and a remaining borrowing capacity of $860 million. During July 2011, the Company replaced its $980 million revolving credit facility with a five-year $1.0 billion revolving credit facility that expires on July 15, 2016.

(e) Represents senior unsecured notes issued by the Company during December 2006. The balance as of June 30, 2011 represents $800 million aggregate principal less $2 million of unamortized discount, plus a $5 million fair value hedge derivative.

(f) Represents senior unsecured notes issued by the Company during May 2009. The balance as of June 30, 2011 represents $250 million aggregate principal less $8 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 half 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:






















June 30,

2011


March 31,

2011


December 31,

2010


September 30,

2010


June 30,

2010























Debt principal

$ 12


$ 17


$ 116


$ 138


$ 230







Unamortized discount

(1)


(1)


(12)


(17)


(31)







Debt less discount

11


16


104


121


199







Fair value of conversion feature (*)

21


25


162


168


163







Convertible notes

$ 32


$ 41


$ 266


$ 289


$ 362


__________


(*) 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 June 30, 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 June 30, 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 June 30, 2011 represents $250 million aggregate principal less $5 million of unamortized discount.



















Table 6

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS





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


Brand

Number of

Properties

Number of

Rooms

Average

Occupancy Rate

Average Daily

Rate (ADR)

Average Revenue

Per Available

Room (RevPAR)









Lodging







Wyndham Hotels and Resorts

98

26,488

62.7%

$109.96

$68.98









TRYP by Wyndham

94

13,659

66.6%

$103.39

$68.88









Wingate by Wyndham

166

15,234

62.8%

$82.01

$51.51









Hawthorn Suites by Wyndham

74

7,054

63.8%

$75.96

$48.49









Ramada

884

117,365

53.9%

$75.47

$40.70









Baymont

255

21,381

51.2%

$62.66

$32.08









Days Inn

1,865

149,032

50.2%

$61.60

$30.92









Super 8

2,214

139,196

54.6%

$54.95

$30.01









Howard Johnson

462

46,291

49.1%

$61.11

$30.00









Travelodge

434

32,364

49.0%

$65.77

$32.23









Microtel Inns & Suites

317

22,579

55.9%

$58.85

$32.88









Knights Inn

347

21,221

40.1%

$42.71

$17.14









Dream

5

990

71.6%

$173.17

$124.00









Night

1

72

92.8%

$228.31

$211.96










Total Lodging

7,216

612,926

53.0%

$66.73

$35.38









Vacation Ownership







Wyndham Vacation Ownership resorts

162

20,760

N/A

N/A

N/A










Total Wyndham Worldwide

7,378

633,686


















As of and For the Three Months Ended June 30, 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

99

27,771

59.5%

$108.71

$64.66










TRYP by Wyndham

92

13,236

N/A

N/A

N/A










Wingate by Wyndham

164

15,020

61.5%

$79.97

$49.15










Hawthorn Suites by Wyndham

80

7,563

57.7%

$78.07

$45.08










Ramada

901

118,521

51.3%

$71.95

$36.88










Baymont

242

20,496

49.6%

$61.26

$30.38










Days Inn

1,857

148,457

48.6%

$60.66

$29.47










Super 8

2,149

134,189

51.6%

$55.89

$28.86










Howard Johnson

477

45,513

46.8%

$60.84

$28.48










Travelodge

442

32,762

45.9%

$62.35

$28.63










Microtel Inns & Suites

318

22,666

52.3%

$56.90

$29.76










Knights Inn

338

20,157

37.9%

$41.80

$15.84










Other

2

404

N/A

N/A

N/A











Total Lodging

7,161

606,755

50.2%

$64.27

$32.25










Vacation Ownership







Wyndham Vacation Ownership resorts

160

20,569

N/A

N/A

N/A











Total Wyndham Worldwide

7,321

627,324





__________


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











Table 6

(2 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS






As of and For the Six Months Ended June 30, 2011


Brand

Number of

Properties

Number of

Rooms

Average

Occupancy Rate

Average Daily

Rate (ADR)

Average Revenue

Per Available

Room (RevPAR)










Lodging







Wyndham Hotels and Resorts

98

26,488

58.1%

$108.43

$63.01










TRYP by Wyndham

94

13,659

57.5%

$106.68

$61.36










Wingate by Wyndham

166

15,234

59.3%

$80.29

$47.63










Hawthorn Suites by Wyndham

74

7,054

60.7%

$75.14

$45.63










Ramada

884

117,365

49.7%

$74.51

$37.01










Baymont

255

21,381

46.2%

$61.04

$28.20










Days Inn

1,865

149,032

45.4%

$60.08

$27.27










Super 8

2,214

139,196

49.3%

$53.39

$26.31










Howard Johnson

462

46,291

45.1%

$59.36

$26.77










Travelodge

434

32,364

44.9%

$63.04

$28.32










Microtel Inns & Suites

317

22,579

51.1%

$57.13

$29.19










Knights Inn

347

21,221

37.0%

$41.84

$15.47










Dream

5

990

71.9%

$174.20

$125.27










Night

1

72

93.1%

$246.94

$229.87











Total Lodging

7,216

612,926

48.3%

$65.35

$31.57










Vacation Ownership







Wyndham Vacation Ownership resorts

162

20,760

N/A

N/A

N/A











Total Wyndham Worldwide

7,378

633,686


















As of and For the Six Months Ended June 30, 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

99

27,771

55.4%

$110.61

$61.25










TRYP by Wyndham

92

13,236

N/A

N/A

N/A










Wingate by Wyndham

164

15,020

56.6%

$78.81

$44.63










Hawthorn Suites by Wyndham

80

7,563

53.4%

$77.56

$41.41










Ramada

901

118,521

47.2%

$72.32

$34.15










Baymont

242

20,496

45.5%

$59.65

$27.13










Days Inn

1,857

148,457

43.6%

$59.39

$25.92










Super 8

2,149

134,189

46.4%

$54.59

$25.34










Howard Johnson

477

45,513

42.8%

$59.42

$25.44










Travelodge

442

32,762

42.0%

$61.92

$25.99










Microtel Inns & Suites

318

22,666

48.0%

$56.04

$26.88










Knights Inn

338

20,157

35.5%

$40.46

$14.36










Other

2

404

N/A

N/A

N/A











Total Lodging

7,161

606,755

45.7%

$63.60

$29.04










Vacation Ownership







Wyndham Vacation Ownership resorts

160

20,569

N/A

N/A

N/A











Total Wyndham Worldwide

7,321

627,324





__________







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)




Three months ended March 31, 2011

Net

Revenues


Reported

EBITDA

Legacy

Adjustments (b)

Asset

Impairment (c)

Restructuring

Costs

VAT

Adjustments (e)

Adjusted

EBITDA


Lodging

$ 149


$ 27

$ -

$ 13

$ -


$ -

$ 40


Vacation Exchange and Rentals

356


93

-

-

-


-

93


Vacation Ownership

450


97

-

-

(1)

(d)

-

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
























Three months ended June 30, 2011











Lodging

$ 190


$ 66

$ -

$ -

$ -


$ -

$ 66


Vacation Exchange and Rentals

361


106

-

-

7

(f)

(31)

82


Vacation Ownership

541


130

-

-

-


-

130


Total Reportable Segments

1,092


302

-

-

7


(31)

278


Corporate and Other (a)

(2)


(26)

3

-

-


-

(23)


Total Company

$ 1,090


$ 276

$ 3

$ -

$ 7


$ (31)

$ 255













__________











(a) Includes the elimination of transactions between segments.

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

(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.

(e) Relates to a net benefit resulting from a refund of value added taxes.

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














Table 7

(2 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATIONS

(In millions)




Three months ended March 31, 2010

Net

Revenues


Reported

EBITDA

Acquisition

Costs (b)

Legacy

Adjustments (c)

Restructuring

Costs (d)

Adjusted

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 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






Three Months Ended June 30, 2011

















As

Reported


Early

Extinguishment of

Debt


Legacy

Adjustments


Restructuring

Costs


VAT

Adjustments


As

Adjusted


Net revenues














Service fees and membership

$ 499










$ 499



Vacation ownership interest sales

313










313



Franchise fees

134










134



Consumer financing

103










103



Other

41










41


Net revenues

1,090


-


-


-


-


1,090
















Expenses














Operating

458










458



Cost of vacation ownership interests

48










48



Consumer financing interest

23










23



Marketing and reservation

153










153



General and administrative

126




(3)

(b)



31

(d)

154



Restructuring

7






(7)

(c)



-



Depreciation and amortization

45










45


Total expenses

860


-


(3)


(7)


31


881
















Operating income

230


-


3


7


(31)


209


Other income, net

(1)










(1)


Interest expense

37


(1)

(a)





(3)

(e)

33


Interest income

(2)










(2)
















Income before income taxes

196


1


3


7


(28)


179


Provision for income taxes

82


1

(f)

1

(f)

2

(f)

(15)

(f)

71
















Net income

$ 114


$ -


$ 2


$ 5


$ (13)


$ 108
















Earnings per share














Basic

$ 0.68


$ -


$ 0.01


$ 0.03


$ (0.08)


$ 0.65



Diluted

0.67


-


0.01


0.03


(0.08)


0.64
















Weighted average shares outstanding














Basic

167


167


167


167


167


167



Diluted

170


170


170


170


170


170


__________













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 second quarter of 2011.

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

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

(d) Relates to a net benefit resulting from a refund of value added taxes.

(e) Relates to interest on value added tax accruals.

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

















Table 8

(2 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






Six Months Ended June 30, 2011



















As

Reported


Early

Extinguishment of

Debt


Legacy

Adjustments


Asset

Impairment


Restructuring

Costs


VAT

Adjustments


As

Adjusted


Net revenues
















Service fees and membership

$ 995












$ 995



Vacation ownership interest sales

535












535



Franchise fees

235












235



Consumer financing

206












206



Other

70












70


Net revenues

2,041


-


-


-


-


-


2,041


















Expenses
















Operating

868












868



Cost of vacation ownership interests

79












79



Consumer financing interest

46












46



Marketing and reservation

290












290



General and administrative

266




4

(b)





31

(f)

301



Asset impairment

13






(13)

(d)





-



Restructuring

6








(6)

(e)



-



Depreciation and amortization

90












90


Total expenses

1,658


-


4


(13)


(6)


31


1,674


















Operating income

383


-


(4)


13


6


(31)


367


Other income, net

(7)




4

(c)







(3)


Interest expense

81


(12)

(a)







(3)

(g)

66


Interest income

(3)












(3)


















Income before income taxes

312


12


(8)


13


6


(28)


307


Provision for income taxes

126


5

(h)

(3)

(h)

5

(h)

2

(h)

(15)

(h)

120


















Net income

$ 186


$ 7


$ (5)


$ 8


$ 4


$ (13)


$ 187


















Earnings per share
















Basic

$ 1.10


$ 0.04


$ (0.03)


$ 0.05


$ 0.03


$ (0.08)


$ 1.10



Diluted

1.07


0.04


(0.03)


0.04


0.02


(0.07)


1.07


















Weighted average shares outstanding
















Basic

170


170


170


170


170


170


170



Diluted

174


174


174


174


174


174


174


__________















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 half 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) Primarily relates to costs incurred as a result of a strategic initiative commenced by the Company during 2010.

(f) Relates to a net benefit resulting from a refund of value added taxes.

(g) Relates to interest on value added tax accruals.

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



















Table 8

(3 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)






Three Months Ended June 30, 2010













As Reported


Acquisition Costs


Legacy Adjustments (b)


As Adjusted


Net revenues










Service fees and membership

$ 409






$ 409



Vacation ownership interest sales

271






271



Franchise fees

120






120



Consumer financing

106






106



Other

57






57


Net revenues

963


-


-


963












Expenses










Operating

387


(1)

(a)



386



Cost of vacation ownership interests

49






49



Consumer financing interest

29






29



Marketing and reservation

138






138



General and administrative

146




-


146



Depreciation and amortization

42






42


Total expenses

791


(1)


-


790












Operating income

172


1


-


173


Other income, net

(3)






(3)


Interest expense

36






36


Interest income

(2)






(2)












Income before income taxes

141


1


-


142


Provision for income taxes

46


-

(c)

1

(c)

47












Net income

$ 95


$ 1


$ (1)


$ 95












Earnings per share










Basic

$ 0.53


$ -


$ -


$ 0.53



Diluted

0.51


-


-


0.51












Weighted average shares outstanding










Basic

180


180


180


180



Diluted

187


187


187


187


__________









Note: EPS amounts may not foot due to rounding.

(a) Relates to costs incurred in connection with the Company's acquisition of the TRYP hotel brand during June 2010.

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

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














Table 8

(4 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)







Six Months Ended June 30, 2010

















As Reported


Early

Extinguishment of

Debt


Acquisition

Costs


Legacy

Adjustments


As Adjusted


Net revenues













Service fees and membership


$ 833








$ 833



Vacation ownership interest sales


488








488



Franchise fees


211








211



Consumer financing


211








211



Other


106








106


Net revenues


1,849


-


-


-


1,849















Expenses













Operating


769




(5)

(b)



764



Cost of vacation ownership interests


86








86



Consumer financing interest


53








53



Marketing and reservation


261








261



General and administrative


293






(1)

(c)

292



Depreciation and amortization


85








85


Total expenses


1,547


-


(5)


(1)


1,541















Operating income


302


-


5


1


308


Other income, net


(5)




-




(5)


Interest expense


86


(16)

(a)





70


Interest income


(2)








(2)















Income before income taxes


223


16


5


1


245


Provision for income taxes


78


6

(d)

1

(d)

1

(d)

86















Net income


$ 145


$ 10


$ 4


$ -


$ 159















Earnings per share













Basic


$ 0.81


$ 0.05


$ 0.02


$ -


$ 0.89



Diluted


0.78


0.05


0.02


-


0.85















Weighted average shares outstanding













Basic


180


180


180


180


180



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 acquisitions of Hoseasons Holdings Ltd. during March 2010 and the TRYP hotel brand during June 2010.

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

(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:










Six Months Ended June 30,





2011


2010











Net cash provided by operating activities

$ 696


$ 557




Less: Property and equipment additions

(96)


(63)




Less: Equity investments and development advances

(5)


(8)




Free cash flow

$ 595


$ 486












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

$ 412

N/A

N/A

N/A


Less: Sales under the WAAM


(18)

(19)

N/A

N/A

N/A


Gross VOI sales, net of WAAM sales


302

393

N/A

N/A

N/A


Less: Loan loss provision


(79)

(80)

N/A

N/A

N/A


Vacation ownership interest sales


$ 222

$ 313

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