EXHIBIT 99.1

 

Wyndham Worldwide Reports Fourth Quarter and Full Year 2011 Earnings

Full Year Adjusted EPS Growth of 25%

Completes $902 Million of Share Repurchases and Increases Dividend 53%

PARSIPPANY, N.J. (February 8, 2012) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months and year ended December 31, 2011.

Highlights:

 

•

Fourth quarter adjusted diluted earnings per share (EPS) was $0.47, compared with $0.46 in the fourth quarter of 2010, an increase of 2%. Fourth quarter 2011 reported diluted EPS was $0.37, a decrease of 14% from the same period in 2010, reflecting non-cash impairment charges in the Company’s Lodging business.

 

•

Free cash flow increased to $754 million for the year ended December 31, 2011, compared with $603 million in 2010.

 

•

The Company’s Board of Directors authorized an increase in the quarterly cash dividend to $0.23 from $0.15 per share, beginning with the dividend that is expected to be declared in the first quarter of 2012.

 

•

During the quarter, the Company repurchased 6.7 million shares of its common stock for $225 million at an average price of $33.78. For the full-year 2011, the Company repurchased 28.7 million shares of its common stock for $902 million at an average price of $31.45.

“2011 was another excellent year for our company,” said Stephen P. Holmes, chairman and CEO, Wyndham Worldwide. “In an environment of ongoing economic uncertainty, our businesses continued to execute at a high level. As expected, we generated robust free cash flow and effectively deployed that cash flow. We remain well positioned for growth and that confidence is reflected in the 53% dividend increase authorized by our Board of Directors.”

FOURTH QUARTER 2011 OPERATING RESULTS

Fourth quarter revenues increased 7% from the prior year period to $1.0 billion. The increase reflects organic growth in the Company’s Lodging and Vacation Ownership businesses and incremental contributions from acquisitions at its Vacation Exchange and Rentals business.

---

For the fourth quarter of 2011, adjusted net income was $73 million, or $0.47 per diluted share, compared with $84 million, or $0.46 per diluted share for the same period in 2010. The decrease in adjusted net income primarily reflects a higher adjusted tax rate and higher adjusted net interest expense. Adjusted net income for the fourth quarter of 2011 excludes $27 million, after-tax, of non-cash impairment charges at our Lodging business, a $7 million tax benefit related to value added tax (VAT) adjustments, and a $3 million tax benefit related to legacy adjustments. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Reported net income for the fourth quarter of 2011 was $56 million, or $0.37 per diluted share, compared with net income of $78 million, or $0.43 per diluted share, for the fourth quarter of 2010.

FULL YEAR 2011 OPERATING RESULTS

Reported revenues for full year 2011 were $4.3 billion, an increase of 10% over the prior-year period. The revenue increase resulted from higher RevPAR in the Lodging business, higher Vacation Ownership Interest (VOI) sales and Wyndham Asset Affiliation Model (WAAM) commissions in the Vacation Ownership business, and contributions from acquisitions along with higher average net price per vacation rental in the Vacation Exchange and Rentals business. Adjusted net income for the full year 2011 was $414 million or $2.49 per diluted share, compared with $368 million or $2.00 per diluted share for the prior-year period. Adjusted net income for the full year 2011 excludes an aggregate of $3 million of net benefits, after tax. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Reported net income for full year 2011 was $417 million, or $2.51 per diluted share, compared with net income of $379 million, or $2.05 per diluted share, for the prior-year period.

Free cash flow increased to $754 million in the year ended December 31, 2011 compared with $603 million in the same period in 2010. The growth of free cash flow largely reflects stronger operating results and a $67 million benefit generated by a refund of VAT and related interest income. The Company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances and excludes a 2010 cash payment of $145 million related to contingent IRS tax liabilities. For the year ended December 31, 2011, cash provided by operating activities was $1.0 billion compared with $635 million for the prior-year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $188 million in the fourth quarter of 2011, an increase of 15%, compared with the fourth quarter of 2010, reflecting a RevPAR improvement of 5% and revenues associated with the newly opened Wyndham Grand hotel in Orlando. The revenue increase also included a $15 million reclassification, primarily related to certain reservation fees, which had no impact on EBITDA.

---

Excluding $44 million of non-cash impairment charges, adjusted EBITDA was $41 million, an increase of 3% compared with the fourth quarter of 2010, largely reflecting RevPAR improvement and lower bad debt expense. These benefits were partially offset by the timing of higher marketing costs.

As of December 31, 2011, the Company’s hotel system consisted of 7,205 properties and over 613,100 rooms. The development pipeline included nearly 850 hotels and 111,900 rooms, of which 57% were new construction and 60% were international.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $291 million in the fourth quarter of 2011, an increase of 3% compared with the fourth quarter of 2010. In constant currency and excluding the impact of acquisitions, revenues were flat.

Exchange revenues were $150 million, a decrease of 2% compared with the fourth quarter of 2010. The average number of members was flat. In constant currency, exchange revenues and exchange revenue per member were also flat.

Vacation rental revenues were $125 million, a 10% increase compared with the fourth quarter of 2010. Excluding the impact of foreign currency and acquisitions, vacation rental revenues were flat as a 5% increase in the average net price per vacation rental was offset by a 5% decline in vacation rental transactions.

Adjusted EBITDA for the fourth quarter of 2011 decreased $4 million compared with the prior-year period, reflecting the impact of unfavorable foreign currency and the seasonality of recently acquired businesses.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $527 million in the fourth quarter of 2011, a 6% increase over the fourth quarter of 2010, reflecting increased VOI sales and WAAM commissions.

Gross VOI sales were $409 million in the fourth quarter of 2011, up 10% from the fourth quarter of 2010, primarily reflecting an 8% increase in tour flow and a 4% increase in volume per guest.

EBITDA for the fourth quarter of 2011 was $139 million, compared with EBITDA of $131 million in the fourth quarter of 2010, a 6% increase. EBITDA growth includes contributions from increased VOI sales and WAAM commissions.

Other Items

•

The Company repurchased approximately 6.7 million shares of common stock for $225 million during the fourth quarter of 2011 at an average price of $33.78 and an additional 1.5 million shares for $60 million at an average price of $39.02 through February 7, 2012. The Company has $311 million remaining on its current share repurchase authorization.

---

•

Net interest expense in the fourth quarter of 2011 was $36 million, an increase of $2 million from the fourth quarter of 2010, primarily reflecting higher average borrowings, partially offset by the absence of $3 million of charges for the early extinguishment of debt in the fourth quarter of 2010.

Balance Sheet Information as of December 31, 2011:

•

Cash and cash equivalents of approximately $140 million, compared with $156 million at December 31, 2010

•

Vacation ownership contract receivables, net, of $2.8 billion, compared with $3.0 billion at December 31, 2010

•

Vacation ownership and other inventory of approximately $1.1 billion, compared with $1.2 billion at December 31, 2010

•

Securitized vacation ownership debt of $1.9 billion, compared with $1.7 billion at December 31, 2010

•

Long-term debt of $2.2 billion, compared with $2.1 billion at December 31, 2010. The remaining borrowing capacity on the revolving credit facility was $771 million, compared with $788 million as of December 31, 2010

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

Outlook

For the full year 2012, the Company expects:

•

Revenues of approximately $4.4 – $4.6 billion

•

Adjusted EBITDA of approximately $1.030 – $1.055 billion

•

EPS Guidance of $2.85 – $3.00, up from $2.72 – $2.82

•

Diluted shares of 153 million

The guidance reflects assumptions used for internal planning purposes. Guidance may exclude non-recurring or special items, 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.

Conference Call Information

Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, February 8, 2012 at 8:30 a.m. EST. Listeners may access the webcast live through the Company’s website at www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the website for approximately 90 days beginning at noon EST on February 8, 2012. The conference call may also be accessed by dialing (800) 369-2052 and providing the passcode “WYNDHAM.” Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EST on February 8, 2012, at (800) 947-6332.

---

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA 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 reported results.

About Wyndham Worldwide Corporation

As one of the world’s largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses 7,205 hotels with approximately 613,100 rooms worldwide. Wyndham Exchange & Rentals offers leisure travelers, including its 3.7 million members, access to approximately 100,000 vacation properties located in approximately 100 countries. Wyndham Vacation Ownership develops, markets and sells vacation ownership interests and provides consumer financing to owners through its network of over 160 vacation ownership resorts serving over 813,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs approximately 27,800 employees globally.

For more information about Wyndham Worldwide, please visit www.wyndhamworldwide.com.

Forward-Looking Statements

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

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation

---

ownership businesses, as well as those described in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on October 26, 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.

# # #

Investor and Media contact:

Margo C. Happer

Senior Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-6472

margo.happer@wyn.com

---

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 December 31, 2011 and 2010:

 

		Three Months Ended December 31,
		2011								2010
		Net Revenues				EBITDA				Net Revenues				EBITDA
Lodging		$	188			$	(3	)(b)		$	163			$	40
Vacation Exchange and Rentals			291				38				282				32	(c)
Vacation Ownership			527				139				497				131
Total Reportable Segments			1,006				174				942				203
Corporate and Other (a)			(6	)			(26	)			(5	)			(20	)(d)
Total Company		$	1,000			$	148			$	937			$	183
Reconciliation of EBITDA to Net Income
EBITDA						$	148							$	183
Depreciation and amortization							45								44
Interest expense							37								34	(e)
Interest income							(1	)							—
Income before income taxes							67								105
Provision for income taxes							11								27
Net income						$	56							$	78

 

(a)	Includes the elimination of transactions between segments.

(b)	Includes non-cash impairment charges of $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes.

(c)	Includes (i) restructuring costs of $9 million and (ii) $1 million related to costs incurred in connection with the Company’s November 2010 acquisition of James Villa Holidays.

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

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

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

 

		Three Months Ended December 31,
		2011								2010
		Net Revenues				Adjusted EBITDA				Net Revenues				Adjusted EBITDA
Lodging		$	188			$	41			$	163			$	40
Vacation Exchange and Rentals			291				38				282				42
Vacation Ownership			527				139				497				131
Total Reportable Segments			1,006				218				942				213
Corporate and Other			(6	)			(26	)			(5	)			(23	)
Total Company		$	1,000			$	192			$	937			$	190

---

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 twelve months ended December 31, 2011 and 2010:

 

		Twelve Months Ended December 31,
		2011								2010
		Net Revenues				EBITDA				Net Revenues				EBITDA
Lodging		$	749			$	157	(b)		$	688			$	189	(h)
Vacation Exchange and Rentals			1,444				368	(c)			1,193				293	(i)
Vacation Ownership			2,077				515	(d)			1,979				440
Total Reportable Segments			4,270				1,040				3,860				922
Corporate and Other (a)			(16	)			(84	)(e)			(9	)			(24	)(e)
Total Company		$	4,254			$	956			$	3,851			$	898
Reconciliation of EBITDA to Net Income
EBITDA						$	956							$	898
Depreciation and amortization							178								173
Interest expense							152	(f)							167	(j)
Interest income							(24	)(g)							(5	)
Income before income taxes							650								563
Provision for income taxes							233								184
Net income						$	417							$	379

 

(a)	Includes the elimination of transactions between segments.

(b)	Includes non-cash impairment charges of (i) $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes and (ii) $13 million related to a write-down of an international joint venture.

(c)

Includes (i) a $31 million net benefit resulting from a refund of value added taxes, (ii) $7 million of restructuring costs incurred in connection with a strategic initiative commenced by the Company during 2010 and (iii) a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

(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 $16 million and $54 million of a net benefit during 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

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

(g)	Includes $16 million of interest income related to a refund of value added taxes.

(h)	Includes $1 million related to costs incurred in connection with the Company’s June 2010 acquisition of the Tryp hotel brand.

(i)	Includes (i) restructuring costs of $9 million and (ii) $6 million related to costs incurred in connection with the Company’s March 2010 acquisition of Hoseasons, September 2010 acquistion of ResortQuest and November 2010 acquisition of James Villa Holidays.

(j)	Includes (i) $16 million of costs incurred for the early extinguishment of the Company’s term loan facility and revolving foreign credit facility during March 2010 and (ii) $14 million of costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during 2010.

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

 

		Twelve Months Ended December 31,
		2011								2010
		Net Revenues				Adjusted EBITDA				Net Revenues				Adjusted EBITDA
Lodging		$	749			$	214			$	688			$	190
Vacation Exchange and Rentals			1,444				348				1,193				308
Vacation Ownership			2,077				514				1,979				440
Total Reportable Segments			4,270				1,076				3,860				938
Corporate and Other			(16	)			(100	)			(9	)			(78	)
Total Company		$	4,254			$	976			$	3,851			$	860

---

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

 

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2011				2010				2011				2010
Net revenues
Service and membership fees		$	434			$	409			$	2,012			$	1,706
Vacation ownership interest sales			295				276				1,150				1,072
Franchise fees			127				107				522				461
Consumer financing			105				107				415				425
Other			39				38				155				187
Net revenues			1,000				937				4,254				3,851
Expenses
Operating			422				409	(a)			1,781	(b)			1,587	(a)(c)
Cost of vacation ownership interests			37				47				152				184
Consumer financing interest			25				25				92				105
Marketing and reservation			156				121				628				531
General and administrative (d)			170				145				593	(e)			540
Asset impairments			44	(f)			—				57	(f)			4	(g)
Restructuring			—				9	(h)			6	(i)			9	(h)
Depreciation and amortization			45				44				178				173
Total expenses			899				800				3,487				3,133
Operating income			101				137				767				718
Other income, net			(2	)			(2	)			(11	)(j)			(7	)
Interest expense			37				34	(k)			152	(l)			167	(k)
Interest income			(1	)			—				(24	)(m)			(5	)
Income before income taxes			67				105				650				563
Provision for income taxes			11				27				233	(n)			184
Net income		$	56			$	78			$	417			$	379
Earnings per share
Basic		$	0.37			$	0.45			$	2.57			$	2.13
Diluted			0.37				0.43				2.51				2.05
Weighted average shares outstanding
Basic			151				174				162				178
Diluted			154				182				166				185

 

(a)	Includes costs of $1 million incurred in connection with the Company’s November 2010 acquisition of James Villa Holidays.

(b)	Includes a $4 million charge related to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

(c)	Includes costs of $6 million incurred in connection with the Company’s March 2010 acquisition of Hoseasons, June 2010 acquisition of the Tryp hotel brand and September 2010 acquisition of ResortQuest.

(d)

Includes $3 million of a net benefit during the three months ended December 31, 2010 and $12 million of a net expense and $54 million of a net benefit during the twelve months ended December 31, 2011 and 2010, respectively, related to the resolution of and adjustment to certain contingent liabilities and assets resulting from our separation from Cendant.

(e)	Includes a $31 million net benefit resulting from a refund of value added taxes.

(f)	Includes non-cash impairment charges of (i) $44 million primarily related to the write-down of certain franchise and management agreements and development advance notes and (ii) $13 million related to a write-down of an international joint venture at the Company’s lodging business.

(g)	Represents a non-cash impairment charge to reduce the value of certain vacation ownership properties and related assets held for sale that were no longer consistent with the Company’s development plans.

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

(i)	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.

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

(k)

Includes $3 million and $14 million, respectively for the three and twelve months ended December 31, 2010 related to costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during the third and fourth quarters of 2010. The twelve months ended December 31, 2010 also includes $16 million of costs incurred for the early extinguishment of the Company’s term loan facility and revolving foreign credit facility during March 2010.

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

(m)	Includes $16 million of interest income related to the refund of value added taxes.

(n)	Includes a benefit of $13 million related to the reversal of a tax valuation allowance.

---

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				611,200				613,100				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			$	39.49			$	30.65			$	33.34
			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				3,744				3,734				3,750
			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			$	172.38			$	161.68			$	179.59
			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				370				250				1,347
			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			$	701.81			$	497.04			$	530.78
			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			$	455,000			$	409,000			$	1,595,000
			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				197,000				173,000				685,000
			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			$	2,197			$	2,296			$	2,229
			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 add 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), James Villa Holidays (November 2010) and two tuck-in acquisitions (third quarter 2011) 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				7,190				7,210				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			$	—			$	—			$	—			$	—			$	—
			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			$	96,000			$	83,000			$	339,000
			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			$	38,000			$	31,000			$	106,000
			2010			$	5,000			$	13,000			$	20,000			$	14,000			$	51,000
WAAM Commission Revenues (in 000s)			2011			$	10,000			$	11,000			$	23,000			$	21,000			$	65,000
			2010			$	3,000			$	8,000			$	12,000			$	9,000			$	31,000

 

Note: Full year amounts may not add 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.

(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 Statements 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 services and products.

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

Vacation Rental Transactions: Represents the number of transactions that are generated 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			$	85			$	66			$	284			$	52			$	69			$	82			$	62			$	265
Marketing, Reservation and Wyndham Rewards Revenues (a)			54				75				94				76				299				50				65				76				60				251
Hotel Management Reimbursable Revenues (b)			19				19				21				20				79				21				20				18				18				77
Ancillary Revenues (c)			18				21				22				26				87				21				24				27				23				95
Total Lodging			149				190				222				188				749				144				178				203				163				688
Vacation Exchange and Rentals
Exchange Revenues			194				168				161				150				673				189				161				163				153				666
Rental Revenues			150				180				260				125				715				105				115				161				114				495
Ancillary Revenues (d)			12				13				15				16				56				6				5				6				15				32
Total Vacation Exchange and Rentals			356				361				436				291				1,444				300				281				330				282				1,193
Vacation Ownership
Vacation Ownership Interest Sales			222				313				320				295				1,150				217				271				308				276				1,072
Consumer Financing			102				103				105				105				415				105				106				107				107				425
Property Management Fees			110				108				105				101				424				100				100				104				101				405
WAAM Commissions			10				11				23				21				65				3				8				12				8				31
Ancillary Revenues (e)			6				6				6				5				23				19				20				2				5				46
Total Vacation Ownership			450				541				559				527				2,077				444				505				533				497				1,979
Total Reportable Segments		$	955			$	1,092			$	1,217			$	1,006			$	4,270			$	888			$	964			$	1,066			$	942			$	3,860
		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 add 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 operations.

---

Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

 

			December				December				December				December				December
		December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
Securitized vacation ownership debt (a)
Term notes		$	1,625			$	1,512			$	1,446			$	1,666			$	1,498
Bank conduit facility (b)			237				218				242				148				152
Securitized vacation ownership debt (c)			1,862				1,730				1,688				1,814				1,650
Less: Current portion of securitized vacation ownership debt			196				179				190				216				223
Long-term securitized vacation ownership debt		$	1,666			$	1,551			$	1,498			$	1,598			$	1,427
Debt:
Revolving credit facility (due July 2016) (d)		$	218			$	169			$	107			$	5			$	154
6.00% senior unsecured notes (due December 2016) (e)			811				812				803				797				798
9.875% senior unsecured notes (due May 2014) (f)			243				243				242				241				241
3.50% convertible notes (due May 2012) (g)			36				27				32				41				266
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				247
5.625% senior unsecured notes (due March 2021) (j)			245				245				245				245				—
Vacation rentals capital leases			102				108				120				120				115
Other			4				1				1				28				26
Total debt			2,153				2,099				2,044				1,971				2,094
Less: Current portion of debt			46				37				43				12				11
Long-term debt		$	2,107			$	2,062			$	2,001			$	1,959			$	2,083

 

(a)

The Company’s vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities (“SPE”) that are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company’s creditors and legally are not the Company’s assets. Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.

(b)	Represents a non-recourse vacation ownership bank conduit facility with a term through June 2013 and borrowing capacity of $600 million. As of December 31, 2011, this facility had remaining borrowing capacity of $363 million.

(c)	This debt is collateralized by $2,638 million, $2,502 million, $2,672 million, $2,778 million and $2,865 million of underlying vacation ownership contract receivables and related assets as of December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively.

(d)	Represents a $1.0 billion revolving credit facility that expires on July 15, 2016. As of December 31, 2011, the Company had $11 million of outstanding letters of credit and a remaining borrowing capacity of $771 million.

(e)	Represents senior unsecured notes issued by the Company during December 2006. The balance as of December 31, 2011 represents $800 million aggregate principal less $2 million of unamortized discount, plus $13 million of unamortized gains from the settlement of a derivative.

(f)	Represents senior unsecured notes issued by the Company during May 2009. The balance as of December 31, 2011 represents $250 million aggregate principal less $7 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 2010, the Company repurchased a portion of these notes. During 2011, the Company repurchased a portion of these notes, primarily through the completion of a cash tender offer. The following table details the components of the convertible notes:

 

 

(*)

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 December 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 December 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 December 31, 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 December 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			100				26,180				55.2	%		$	109.87			$	60.66
TRYP by Wyndham			91				13,076				59.8	%		$	97.58			$	58.33
Wingate by Wyndham			162				14,836				55.3	%		$	78.47			$	43.42
Hawthorn Suites by Wyndham			74				7,036				56.3	%		$	72.93			$	41.09
Ramada			845				114,306				49.4	%		$	77.79			$	38.41
Baymont			259				21,605				42.9	%		$	60.63			$	25.99
Days Inn			1,864				150,436				42.8	%		$	59.07			$	25.31
Super 8			2,249				142,254				49.2	%		$	51.24			$	25.19
Howard Johnson			451				45,115				43.9	%		$	59.39			$	26.08
Travelodge			440				33,081				42.2	%		$	61.45			$	25.95
Microtel Inns & Suites			315				22,441				49.0	%		$	58.62			$	28.75
Knights Inn			349				21,698				37.8	%		$	40.37			$	15.25
Dream			5				990				75.8	%		$	242.68			$	183.83
Night			1				72				94.5	%		$	261.24			$	247.00
Total Lodging			7,205				613,126				47.0	%		$	65.18			$	30.65
Vacation Ownership
Wyndham Vacation Ownership resorts			162				20,803				N/A				N/A				N/A
Total Wyndham Worldwide			7,367				633,929
		As of and For the Three Months Ended December 31, 2010
Brand		Number of Properties				Number of Rooms				Average Occupancy Rate				Average Daily Rate (ADR)				Average Revenue Per Available Room (RevPAR)
Lodging
Wyndham Hotels and Resorts			101				28,311				52.0	%		$	108.89			$	56.62
TRYP by Wyndham			94				13,692				62.0	%		$	101.09			$	62.64
Wingate by Wyndham			165				15,066				54.0	%		$	77.24			$	41.73
Hawthorn Suites by Wyndham			76				7,100				53.3	%		$	71.94			$	38.34
Ramada			896				119,042				48.8	%		$	75.61			$	36.93
Baymont			261				21,933				41.9	%		$	59.18			$	24.78
Days Inn			1,877				149,980				41.4	%		$	58.09			$	24.05
Super 8			2,174				136,267				46.1	%		$	52.53			$	24.21
Howard Johnson			474				46,362				42.5	%		$	57.45			$	24.42
Travelodge			436				31,908				40.8	%		$	60.54			$	24.72
Microtel Inns & Suites			316				22,539				45.9	%		$	56.57			$	25.97
Knights Inn			336				20,335				35.0	%		$	40.98			$	14.35
Other			1				200				N/A				N/A				N/A
Total Lodging			7,207				612,735				45.3	%		$	64.44			$	29.18
Vacation Ownership
Wyndham Vacation Ownership resorts			162				20,641				N/A				N/A				N/A
Total Wyndham Worldwide			7,369				633,376

 

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 SYSTEMS DETAILS

 

		As of and For the Twelve Months Ended December 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			100				26,180				58.4	%		$	108.27			$	63.22
TRYP by Wyndham			91				13,076				60.5	%		$	103.27			$	62.48
Wingate by Wyndham			162				14,836				59.7	%		$	80.61			$	48.11
Hawthorn Suites by Wyndham			74				7,036				61.1	%		$	74.76			$	45.69
Ramada			845				114,306				51.4	%		$	76.40			$	39.29
Baymont			259				21,605				47.5	%		$	62.00			$	29.43
Days Inn			1,864				150,436				47.0	%		$	61.42			$	28.88
Super 8			2,249				142,254				52.1	%		$	54.32			$	28.29
Howard Johnson			451				45,115				46.7	%		$	60.72			$	28.33
Travelodge			440				33,081				46.7	%		$	65.12			$	30.41
Microtel Inns & Suites			315				22,441				52.7	%		$	59.07			$	31.11
Knights Inn			349				21,698				38.7	%		$	42.32			$	16.39
Dream			5				990				75.6	%		$	198.31			$	149.88
Night			1				72				94.0	%		$	241.42			$	227.05
Total Lodging			7,205				613,126				50.2	%		$	66.46			$	33.34
Vacation Ownership
Wyndham Vacation Ownership resorts			162				20,803				N/A				N/A				N/A
Total Wyndham Worldwide			7,367				633,929
		As of and For the Twelve Months Ended December 31, 2010
Brand		Number of Properties				Number of Rooms				Average Occupancy Rate				Average Daily Rate (ADR)				Average Revenue Per Available Room (RevPAR)
Lodging
Wyndham Hotels and Resorts			101				28,311				55.0	%		$	109.23			$	60.10
TRYP by Wyndham			94				13,692				62.6	%		$	92.47			$	57.86
Wingate by Wyndham			165				15,066				57.6	%		$	79.09			$	45.56
Hawthorn Suites by Wyndham			76				7,100				55.4	%		$	75.78			$	41.98
Ramada			896				119,042				49.6	%		$	73.45			$	36.43
Baymont			261				21,933				46.5	%		$	60.60			$	28.19
Days Inn			1,877				149,980				45.5	%		$	60.46			$	27.52
Super 8			2,174				136,267				49.3	%		$	55.54			$	27.41
Howard Johnson			474				46,362				45.2	%		$	60.05			$	27.13
Travelodge			436				31,908				44.7	%		$	63.51			$	28.39
Microtel Inns & Suites			316				22,539				49.8	%		$	57.35			$	28.54
Knights Inn			336				20,335				37.3	%		$	42.28			$	15.76
Other			1				200				N/A				N/A				N/A
Total Lodging			7,207				612,735				48.0	%		$	64.85			$	31.14
Vacation Ownership
Wyndham Vacation Ownership resorts			162				20,641				N/A				N/A				N/A
Total Wyndham Worldwide			7,369				633,376

 

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)

 

			0				0				0				0				0				0				0				0
		Net Revenues				Reported EBITDA				Legacy Adjustments(b)				Asset Impairments				Restructuring Costs				VAT Adjustments(e)				CTA Writeoff(f)				Adjusted EBITDA
Three months ended March 31, 2011
Lodging		$	149			$	27			$	—			$	13	(c)		$	—			$	—			$	—			$	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	(g)			(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
Three months ended September 30, 2011
Lodging		$	222			$	67			$	—			$	—			$	—			$	—			$	—			$	67
Vacation Exchange and Rentals			436				131				—				—				—				—				4				135
Vacation Ownership			559				149				—				—				—				—				—				149
Total Reportable Segments			1,217				347				—				—				—				—				4				351
Corporate and Other (a)			(5	)			(18	)			(8	)			—				—				—				—				(26	)
Total Company		$	1,212			$	329			$	(8	)		$	—			$	—			$	—			$	4			$	325
Three months ended December 31, 2011
Lodging		$	188			$	(3	)		$	—			$	44	(h)		$	—			$	—			$	—			$	41
Vacation Exchange and Rentals			291				38				—				—				—				—				—				38
Vacation Ownership			527				139				—				—				—				—				—				139
Total Reportable Segments			1,006				174				—				44				—				—				—				218
Corporate and Other (a)			(6	)			(26	)			—				—				—				—				—				(26	)
Total Company		$	1,000			$	148			$	—			$	44			$	—			$	—			$	—			$	192
Twelve months ended December 31, 2011
Lodging		$	749			$	157			$	—			$	57	(c)(h)		$	—			$	—			$	—			$	214
Vacation Exchange and Rentals			1,444				368				—				—				7	(g)			(31	)			4				348
Vacation Ownership			2,077				515				—				—				(1	)(d)			—				—				514
Total Reportable Segments			4,270				1,040				—				57				6				(31	)			4				1,076
Corporate and Other (a)			(16	)			(84	)			(16	)			—				—				—				—				(100	)
Total Company		$	4,254			$	956			$	(16	)		$	57			$	6			$	(31	)		$	4			$	976

 

(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 related to a write-down of an international joint venture at the Company’s lodging 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 the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

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

(h)	Relates to non-cash impairment charges primarily related to the write-down of certain franchise and management agreements and development advance notes at the Company’s lodging business.

---

Table 7

(2 of 2)

Wyndham Worldwide

NON-GAAP RECONCILIATIONS

(In millions)

 

			0				0				0				0				0				0
		Net Revenues				Reported EBITDA				Acquisition Costs(b)				Legacy Adjustments(c)				Restructuring Costs(d)				Adjusted EBITDA
Three months ended March 31, 2010
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 add 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 December 31, 2011
		As Reported				Legacy Adjustments				Asset Impairments				VAT Adjustments				As Adjusted
Net revenues
Service fees and membership		$	434															$	434
Vacation ownership interest sales			295																295
Franchise fees			127																127
Consumer financing			105																105
Other			39																39
Net revenues			1,000				—				—				—				1,000
Expenses
Operating			422																422
Cost of vacation ownership interests			37																37
Consumer financing interest			25																25
Marketing and reservation			156																156
General and administrative			170																170
Asset impairments			44								(44	)(a)							—
Depreciation and amortization			45																45
Total expenses			899				—				(44	)			—				855
Operating income			101				—				44				—				145
Other income, net			(2	)															(2	)
Interest expense			37																37
Interest income			(1	)															(1	)
Income before income taxes			67				—				44				—				111
Provision for income taxes			11				3	(b)			17	(c)			7	(d)			38
Net income		$	56			$	(3	)		$	27			$	(7	)		$	73
Earnings per share
Basic		$	0.37			$	(0.02	)		$	0.18			$	(0.05	)		$	0.49
Diluted			0.37				(0.02	)			0.18				(0.05	)			0.47
Weighted average shares outstanding
Basic			151				151				151				151				151
Diluted			154				154				154				154				154

 

 

Note: EPS amounts may not add due to rounding.

(a)	Relates to non-cash impairment charges primarily due to the write-down of certain franchise and management agreements and development advance notes at the Company’s lodging business.

(b)	Relates to the reversal of certain legacy tax liabilities resulting from our separation from Cendant.

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

(d)	Relates to additional tax benefits from the utilization of foreign tax credits generated from the value added tax refund and related interest income recorded during the second and third quarters of 2011.

---

Table 8

(2 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

		Twelve Months Ended December 31, 2011
		As Reported				Early Extinguishment of Debt				Tax Valuation Allowance				Legacy Adjustments				Asset Impairments				Restructuring Costs				VAT Adjustments				CTA Writeoff				As Adjusted
Net revenues
Service fees and membership		$	2,012																															$	2,012
Vacation ownership interest sales			1,150																																1,150
Franchise fees			522																																522
Consumer financing			415																																415
Other			155																																155
Net revenues			4,254				—				—				—				—				—				—				—				4,254
Expenses
Operating			1,781																												(4	)(i)			1,777
Cost of vacation ownership interests			152																																152
Consumer financing interest			92																																92
Marketing and reservation			628																																628
General and administrative			593												12	(b)											31	(f)							636
Asset impairment			57																(57	)(d)															—
Restructuring			6																				(6	)(e)											—
Depreciation and amortization			178																																178
Total expenses			3,487				—				—				12				(57	)			(6	)			31				(4	)			3,463
Operating income			767				—				—				(12	)			57				6				(31	)			4				791
Other income, net			(11	)											4	(c)																			(7	)
Interest expense			152				(12	)(a)																			(3	)(g)							137
Interest income			(24	)																							16	(h)							(8	)
Income before income taxes			650				12				—				(16	)			57				6				(44	)			4				669
Provision for income taxes			233				5	(j)			13	(k)			(2	)(l)			22	(j)			1	(j)			(17	)(j)			—	(j)			255
Net income		$	417			$	7			$	(13	)		$	(14	)		$	35			$	5			$	(27	)		$	4			$	414
Earnings per share
Basic		$	2.57			$	0.04			$	(0.08	)		$	(0.08	)		$	0.21			$	0.03			$	(0.17	)		$	0.02			$	2.55
Diluted			2.51				0.04				(0.08	)			(0.08	)			0.21				0.03				(0.17	)			0.02				2.49
Weighted average shares outstanding
Basic			162				162				162				162				162				162				162				162				162
Diluted			166				166				166				166				166				166				166				166				166

 

Note: EPS amounts may not add due to rounding.

(a)	Relates to costs incurred for the early repurchase of a portion of the Company’s 3.50% convertible notes during 2011.

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

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

(d)	Relates to non-cash impairment charges due to a write-down of certain franchise and management agreements and development advance notes and the write-down of an international joint venture in the Company’s lodging 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 interest income associated with a refund of value added taxes.

(i)	Relates to the write-off of foreign exchange translation adjustments associated with the liquidation of a foreign entity.

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

(k)	Relates to the reversal of a tax valuation allowance.

(l)	Relates to the tax effect of the adjustments and the reversal of certain legacy tax liabilities resulting from our separation from Cendant.

---

Table 8

(3 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

		Three Months Ended December 31, 2010
		As Reported				Early Extinguishment of Debt				Acquisition Costs				Legacy Adjustments				Restructuring Costs				As Adjusted
Net revenues
Service fees and membership		$	409																			$	409
Vacation ownership interest sales			276																				276
Franchise fees			107																				107
Consumer financing			107																				107
Other			38																				38
Net revenues			937				—				—				—				—				937
Expenses
Operating			409								(1	)(b)											408
Cost of vacation ownership interests			47																				47
Consumer financing interest			25																				25
Marketing and reservation			121																				121
General and administrative			145												3	(c)							148
Restructuring			9																(9	)(d)			—
Depreciation and amortization			44																				44
Total expenses			800				—				(1	)			3				(9	)			793
Operating income			137								1				(3	)			9				144
Other income, net			(2	)																			(2	)
Interest expense			34				(3	)(a)															31
Income before income taxes			105				3				1				(3	)			9				115
Provision for income taxes			27				1	(e)			—	(e)			—	(e)			3	(e)			31
Net income		$	78			$	2			$	1			$	(3	)		$	6			$	84
Earnings per share
Basic		$	0.45			$	0.01			$	0.01			$	(0.02	)		$	0.04			$	0.48
Diluted			0.43				0.01				—				(0.02	)			0.03				0.46
Weighted average shares outstanding
Basic			174				174				174				174				174				174
Diluted			182				182				182				182				182				182

 

Note: EPS amounts may not add across due to rounding.

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

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

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

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

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

---

Table 8

(4 of 4)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

 

		Twelve Months Ended December 31, 2010
		As Reported				Early Extinguishment of Debt				Acquisition Costs				Legacy Adjustments				Restructuring Costs				As Adjusted
Net revenues
Service fees and membership		$	1,706																			$	1,706
Vacation ownership interest sales			1,072																				1,072
Franchise fees			461																				461
Consumer financing			425																				425
Other			187																				187
Net revenues			3,851				—				—				—				—				3,851
Expenses
Operating			1,587								(7	)(b)											1,580
Cost of vacation ownership interests			184																				184
Consumer financing interest			105																				105
Marketing and reservation			531																				531
General and administrative			540												54	(c)							594
Asset impairment			4																				4
Restructuring			9																(9	)(d)			—
Depreciation and amortization			173																				173
Total expenses			3,133				—				(7	)			54				(9	)			3,171
Operating income			718				—				7				(54	)			9				680
Other income, net			(7	)							—												(7	)
Interest expense			167				(30	)(a)															137
Interest income			(5	)																			(5	)
Income before income taxes			563				30				7				(54	)			9				555
Provision for income taxes			184				12	(e)			1	(e)			(13	)(e)			3	(e)			187
Net income		$	379			$	18			$	6			$	(41	)		$	6			$	368
Earnings per share
Basic		$	2.13			$	0.10			$	0.04			$	(0.23	)		$	0.03			$	2.08
Diluted			2.05				0.10				0.03				(0.22	)			0.03				2.00
Weighted average shares outstanding
Basic			178				178				178				178				178				178
Diluted			185				185				185				185				185				185

 

Note: EPS amounts may not add across due to rounding.

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

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

(c)

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

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

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

---

Table 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 less capital expenditures, equity investments and development advances and 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 development advances, can be used for strategic opportunities, including making acquisitions, paying dividends, repurchasing the Company’s common stock and strengthening the balance sheet. Analysis of free cash flow also facilitates management’s comparisons of the Company’s operating results to its competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period.

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

 

		Twelve Months Ended December 31,
		2011				2010
Net cash provided by operating activities		$	1,003			$	635
Less: Property and equipment additions			(239	)			(167	)
Less: Equity investments and development advances			(10	)			(10	)
Plus: Cash payments related to contingent IRS tax liabilities			—				145
Free cash flow		$	754			$	603

GROSS VOI SALES                        

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

 

		Full Year			Full Year				Full Year				Full Year				Full Year				Full Year
Year
2011				Q1				Q2				Q3				Q4				Full Year
Gross VOI sales				$	319			$	412			$	455			$	409			$	1,595
Less: Sales under the WAAM					(18	)			(19	)			(38	)			(31	)			(106	)
Gross VOI sales, net of WAAM sales					302				393				417				378				1,489
Less: Loan loss provision					(79	)			(80	)			(96	)			(83	)			(339	)
Vacation ownership interest sales				$	222			$	313			$	320			$	295			$	1,150
2010
Gross VOI sales				$	308			$	371			$	412			$	373			$	1,464
Less: Sales under 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 add 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			$	18			$	21			$	11			$	68
2010				$	20			$	20			$	23			$	17			$	80
2009				$	24			$	23			$	29			$	28			$	104
2008				$	33			$	35			$	49			$	40			$	156

 

Note: Amounts may not add across due to rounding.