Wyndham Worldwide Reports Solid Second Quarter 2008 Results

Net revenues increased 3% to $1.1 billion EBITDA growth in all three businesses Adjusted EPS up 8% to $0.53

PARSIPPANY, N.J., July 31 // PRNewswire-FirstCall // -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2008.

SECOND QUARTER 2008 HIGHLIGHTS:

  • Second quarter 2008 revenues were $1.1 billion, an increase of 3% from second quarter 2007.
  • System-wide revenue per available room (RevPAR) increased 1.4% in the second quarter of 2008 compared to the second quarter of 2007.
  • Average number of vacation exchange members increased 5%, or 176,000 members, compared to the second quarter of 2007, reaching nearly 3.7 million members.
  • Average net price per vacation rental increased 15% for the second quarter of 2008 compared to the second quarter of 2007, or 5% in constant currency.
  • Gross Vacation Ownership Interest sales increased 2% compared to the second quarter of 2007.
  • Second quarter reported EPS grew by 6%, or 8% on an adjusted basis. Second quarter 2008 net income was $98 million or $0.55 diluted earnings per share. Adjusted net income excluding legacy items was $94 million or $0.53 adjusted diluted earnings per share.
  • As previously announced, the Company completed two securitization transactions involving the issuance of investment grade asset-backed notes in the amount of $200 million by Sierra Timeshare 2008-1 Receivables Funding, LLC and $450 million by Sierra Timeshare 2008-2 Receivables Funding, LLC.
  • The Company completed the acquisition of the Microtel Inns & Suites (R) and Hawthorn Suites (R) hotel brands for a purchase price of $131 million.



"We delivered solid earnings this quarter despite a challenging global economic environment, reflecting the strength and resilience of our business model," said Stephen P. Holmes, Wyndham Worldwide chairman and chief executive officer. "While we continue to experience pressure in our industry, the diversity and flexibility of our business model allows us to tailor and execute on our sales and marketing initiatives to navigate this difficult environment. I remain confident in our growth prospects."

SECOND QUARTER 2008 OPERATING RESULTS

Revenues for the second quarter of 2008 were $1.1 billion, up 3% compared to the second quarter of 2007. The Company also reported EBITDA growth in each of its three business units during the second quarter of 2008, compared to the second quarter of 2007.

Net income for the second quarter of 2008 was $98 million or $0.55 diluted earnings per share, compared to $96 million or $0.52 diluted earnings per share for the second quarter of 2007.

Excluding $4 million in after-tax net benefit from the resolution of, and adjustment to, certain legacy items, adjusted net income for the second quarter of 2008 would have been $94 million, or $0.53 adjusted diluted earnings per share, an 8% increase compared to $89 million, or adjusted diluted earnings per share of $0.49 in the second quarter of 2007. Adjusted net income in the second quarter of 2007 excluded $4 million in after-tax separation and related costs and $11 million in after-tax net benefit from the resolution of, and adjustment to, certain legacy items.

On May 1, 2008, the Company provided second quarter EPS guidance of $0.46-$0.48, which assumed $25-$35 million in percentage-of-completion (POC) related deferred revenue. Actual results included $5 million in POC related deferred revenue.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues increased 8% to $200 million in the second quarter of 2008 compared with the second quarter of 2007, reflecting higher international revenues, incremental property management reimbursable revenues and increased revenue generated by the Company's loyalty program.

System-wide RevPAR increased 1.4% in the second quarter of 2008, reflecting strong international growth of 15.2%, or 8.4% in constant currency, and a decline in domestic RevPAR of 3.7%. Comparable RevPAR increased 0.6% over the prior year period.

Property management reimbursable revenues were $26 million and marketing/reservation revenues, including Wyndham Rewards revenues, were $77 million in the second quarter of 2008, compared to $22 million and $75 million, respectively, in the second quarter of 2007; these items contribute little, if any, EBITDA.

Second quarter 2008 EBITDA grew to $62 million compared to $59 million in the second quarter of 2007.

As of June 30, 2008, the Company's hotel system consisted of approximately 6,560 properties and 551,500 rooms, of which 20% were international, with a development pipeline of approximately 930 hotels and approximately 109,000 rooms, of which 50% were new construction and over 40% were international.

Vacation Exchange and Rentals (Group RCI)

Revenues increased to $314 million in the second quarter of 2008, a 9% increase compared with the second quarter of 2007, reflecting growth in the average number of members and an increase in the average net price per vacation rental, including favorable currency translations. In constant currency, revenues increased 4% compared to the second quarter of 2007.

Vacation rentals revenues were $153 million, up 12% compared to the second quarter of 2007, or a 3% increase in constant currency. These results reflect a 15% increase in the average net price per vacation rental, or 5% in constant currency, primarily due to favorable mix, and the conversion of an existing Landal park from franchised to a managed property. The gains in the average net price per vacation rental were partially offset by a 2% decline in rental transaction volume which we believe is due to customers booking their vacations closer to the actual travel dates.

Annual dues and exchange revenues were $119 million, up 2% compared to the second quarter of 2007, or a 1% increase in constant currency. The increase was primarily driven by a 5% increase in the average number of members, partially offset by a 3% decrease in the average revenue per member.

Other ancillary revenues were $42 million, up 17% compared to the second quarter of 2007. The increase was primarily due to an adjustment recorded during the second quarter of 2007 that reduced Asia Pacific consulting revenue by $5 million and EBITDA by $6 million.

Second quarter 2008 EBITDA was $54 million, compared to second quarter 2007 EBITDA of $49 million. In constant currency, EBITDA increased $5 million compared to the second quarter of 2007.

Vacation Ownership (Wyndham Vacation Ownership)

Gross Vacation Ownership Interest sales were $532 million for the second quarter of 2008, up 2% compared to the second quarter of 2007. This increase was primarily driven by a 3% increase in tour flow.

Consumer finance revenues increased $16 million to $104 million in the second quarter of 2008, up 18% compared to the second quarter of 2007, reflecting continued growth in the portfolio due to higher gross VOI sales.

Reported revenues were $621 million in the second quarter of 2008, down 1% compared to the second quarter of 2007, reflecting a higher provision for loan losses. Deferred revenue under the POC method of accounting was $5 million during both the 2008 and 2007 periods.

EBITDA for the second quarter of 2008 was $112 million, compared to $100 million in the second quarter of 2007, which included $5 million of separation and related costs.

Other Items

Interest expense for the second quarter of 2008 was $18 million, unchanged from the second quarter of 2007. Interest income for the quarter was $3 million, up $1 million from the comparable prior year period. Depreciation and amortization increased $5 million to $46 million reflecting increased capital investments over the past two years.
Balance Sheet Information as of June 30, 2008:

  • Cash and cash equivalents of approximately $240 million compared to approximately $210 million at December 31, 2007
  • Vacation ownership contract receivables, net, of $3.1 billion compared to $2.9 billion at December 31, 2007
  • Vacation ownership and other inventory of approximately $1.3 billion compared to $1.2 billion at December 31, 2007
  • Securitized vacation ownership debt of $2.1 billion, unchanged since December 31, 2007
  • Other debt of $1.6 billion, compared to $1.5 billion at December 31, 2007



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

Share Repurchase

The Company repurchased approximately 108,000 shares of stock during the second quarter of 2008 at an average price of $19.74. At June 30, 2008, approximately $155 million remained under the Company's previously announced share repurchase program.

Outlook

For the third quarter 2008, the Company expects EPS of $0.80 - $0.82 based on weighted average shares of approximately 178 million.

The Company is updating the full-year 2008 guidance as follows:

  • Revenues of $4,525 - $ 4,625 million
  • Adjusted* EBITDA of $900 - $920 million
  • Depreciation and amortization expense of $175 - $185 million
  • Interest expense, net of $75 - $85 million
  • Adjusted* net income of $388 - $414 million
  • Adjusted* EPS of $2.18 - $2.32 based on weighted average shares of approximately 178 million
  • Deferred POC revenue of $70 - $100 million



* All guidance excludes legacy items, which may have a positive or negative impact on reported results, and rebranding charges.

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 this press release.

Conference Call Information

Wyndham Worldwide Corporation will provide a webcast of its conference call to discuss the Company's second quarter 2008 financial results and outlook for the remainder of 2008 on Thursday, July 31, 2008 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's Web site at http://www.wyndhamworldwide.com/investors/. An archive of this webcast will be available at the Web site for approximately 90 days beginning at noon EDT on July 31. The conference call also may be accessed by dialing (888) 395-6878 and providing the pass code "Wyndham." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available at (888) 402-8740 beginning at noon EDT on July 31 until 5 p.m. EDT on August 4.

About Wyndham Worldwide

As one of the world's largest hospitality companies, Wyndham Worldwide offers individual consumers and business-to-business customers a broad suite of hospitality products and services across various accommodation alternatives and price ranges through its premier portfolio of world-renowned brands. Wyndham Hotel Group encompasses approximately 6,560 franchised hotels and approximately 551,500 hotel rooms worldwide. Group RCI offers its nearly 3.7 million members access to more than 67,000 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 approximately 145 vacation ownership resorts serving over 800,000 owners throughout North America, the Caribbean and the South Pacific. Wyndham Worldwide, headquartered in Parsippany, N.J., employs more than 33,000 employees globally.

For more information about Wyndham Worldwide, please visit the Company's web site at http://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, financing transactions and the number of hotel rooms the Company intends to add in future periods.

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 markets, the economic environment for the hospitality industry, the impact of war and terrorist activity, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's 2007 Annual Report on Form 10-K, filed with the SEC on February 29, 2008. Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.






Table 1
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)


In addition to other measures, management evaluates the operating results
of each of its reportable segments based upon net revenues and "EBITDA,"
which is defined as net income before depreciation and amortization,
interest expense (excluding interest on securitized vacation ownership
debt), interest income and income taxes, each of which is presented on the
Company's Consolidated Statements of Income. The Company's presentation of
EBITDA may not be comparable to similarly-titled measures used by other
companies.

The following tables summarize net revenues and EBITDA for reportable
segments, as well as reconcile EBITDA to net income for the three and
six months ended June 30, 2008 and 2007:



Three Months Ended June 30,
2008 2007

Net Net
Revenues EBITDA Revenues EBITDA(e)
Lodging $200 $62 $186 $59
Vacation Exchange and Rentals 314 54 288 49
Vacation Ownership 621 112 629 100
Total Reportable Segments 1,135 228 1,103 208
Corporate and Other (a) (b) (3) (7) (3) 3
Total Company $1,132 $221 $1,100 $211

Reconciliation of EBITDA to Net
Income

EBITDA $221 $211
Depreciation and amortization 46 41
Interest expense 18 18
Interest income (3) (2)
Income before income taxes 160 154
Provision for income taxes 62 58
Net income $98 $96


Six Months Ended June 30,
2008 2007

Net Net
Revenues EBITDA Revenues EBITDA(e)
Lodging $370 $108 $338 $104
Vacation Exchange and Rentals 654 147 601 134
Vacation Ownership 1,124 120 (d) 1,178 162
Total Reportable Segments 2,148 375 2,117 400
Corporate and Other (a) (c) (4) (24) (5) 2
Total Company $2,144 $351 $2,112 $402

Reconciliation of EBITDA to Net
Income

EBITDA $351 $402
Depreciation and amortization 90 79
Interest expense 37 35
Interest income (5) (5)
Income before income taxes 229 293
Provision for income taxes 89 111
Net income $140 $182


(a) Includes the elimination of transactions between segments.
(b) Includes $7 million and $17 million of a net benefit during the three
months ended June 30, 2008 and 2007, respectively, related to the
resolution of and adjustment to certain contingent liabilities and
assets.
(c) Includes $4 million and $30 million of a net benefit during the six
months ended June 30, 2008 and 2007, respectively, related to the
resolution of and adjustment to certain contingent liabilities and
assets.
(d) Includes an impairment charge of $28 million due to the Company's
initiative to rebrand its vacation ownership trademarks to the Wyndham
brand.
(e) Includes separation and related costs of $5 million and $2 million for
Vacation Ownership and Corporate and Other, respectively, during the
three months ended June 30, 2007 and $8 million and $5 million for
Vacation Ownership and Corporate and Other, respectively, during the
six months ended June 30, 2007.



Table 2
Wyndham Worldwide Corporation
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)


Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Net revenues
Vacation ownership interest
sales $414 $443 $708 $816
Service fees and membership 424 387 876 790
Franchise fees 136 137 249 251
Consumer financing 104 88 203 169
Other 54 45 108 86
Net revenues 1,132 1,100 2,144 2,112

Expenses
Operating 465 447 905 853
Cost of vacation ownership
interests 80 104 140 195
Marketing and reservation 218 207 427 404
General and administrative (a) 152 124 298 245
Separation and related costs (b) - 7 - 13
Trademark impairment (c) - - 28 -
Depreciation and amortization 46 41 90 79
Total expenses 961 930 1,888 1,789

Operating income 171 170 256 323
Other income, net (4) - (5) -
Interest expense 18 18 37 35
Interest income (3) (2) (5) (5)

Income before income taxes 160 154 229 293
Provision for income taxes 62 58 89 111

Net income $98 $96 $140 $182

Earnings per share
Basic $0.55 $0.53 $0.79 $0.98
Diluted 0.55 0.52 0.79 0.98

Weighted average shares outstanding
Basic 177 181 177 185
Diluted 178 183 178 186


(a) Includes $7 million and $17 million of a net benefit during the
three months ended June 30, 2008 and 2007, respectively, and $4
million and $30 million of a net benefit during the six months ended
June 30, 2008 and 2007, respectively, related to the resolution of
and adjustment to certain contingent liabilities and assets.
(b) Represents costs that the Company incurred in connection with the
execution of its separation from its former parent, Cendant (now
Avis Budget Group, Inc.). Such amounts, net of tax, were $4 million
and $8 million during the three and six months ended June 30, 2007,
respectively.
(c) Represents an impairment charge due to the Company's initiative to
rebrand its vacation ownership trademarks to the Wyndham brand.
Such amount, net of tax, was $17 million during the six months ended
June 30, 2008.



Table 3
(1 of 2)
Wyndham Worldwide Corporation
OPERATING STATISTICS

Year Q1 Q2 Q3 Q4 Full Year
Lodging (a)
Number of Rooms (b)
2008 551,100 551,500 N/A N/A N/A
2007 539,300 541,700 540,900 550,600 N/A
2006 525,500 535,900 533,700 543,200 N/A
2005 519,300 516,000 512,000 532,700 N/A

RevPAR
2008 $32.21 $38.87 N/A N/A N/A
2007 $31.35 $38.35 $43.10 $33.09 $36.48
2006 $30.45 $36.97 $40.82 $31.41 $34.95
2005 $25.53 $31.91 $36.86 $29.72 $31.00

Royalty,
Marketing and
Reservation
Revenue
(in 000s) 2008 $104,162 $127,238 N/A N/A N/A
2007 $105,426 $129,453 $146,290 $107,870 $489,041
2006 $102,741 $125,409 $138,383 $104,505 $471,039
2005 $84,704 $104,281 $119,829 $99,804 $408,620

Vacation Exchange
and Rentals
Average Number
of Members
(in 000s) 2008 3,632 3,682 N/A N/A N/A
2007 3,474 3,506 3,538 3,588 3,526
2006 3,292 3,327 3,374 3,429 3,356
2005 3,148 3,185 3,233 3,271 3,209

Annual Dues and
Exchange
Revenue Per
Member 2008 $150.84 $128.91 N/A N/A N/A
2007 $155.60 $132.33 $131.38 $124.59 $135.85
2006 $152.10 $130.37 $132.31 $128.13 $135.62
2005 $159.12 $134.98 $125.64 $124.05 $135.76

Vacation Rental
Transactions
(in 000s) 2008 387 319 N/A N/A N/A
2007 398 326 360 293 1,376
2006 385 310 356 293 1,344
2005 367 311 344 278 1,300

Average Net
Price Per
Vacation Rental 2008 $412.74 $477.63 N/A N/A N/A
2007 $349.73 $415.71 $506.78 $426.93 $422.83
2006 $312.51 $374.91 $442.75 $356.16 $370.93
2005 $331.37 $363.14 $412.66 $325.62 $359.27

Vacation Ownership
Gross Vacation
Ownership
Interest Sales
(in 000s) 2008 $458,000 $532,000 N/A N/A N/A
2007 $430,000 $523,000 $552,000 $488,000 $1,993,000
2006 $357,000 $434,000 $482,000 $469,000 $1,743,000
2005 $281,000 $354,000 $401,000 $360,000 $1,396,000

Tours 2008 255,000 314,000 N/A N/A N/A
2007 240,000 304,000 332,000 268,000 1,144,000
2006 208,000 273,000 312,000 254,000 1,046,000
2005 195,000 250,000 272,000 217,000 934,000

Volume
Per Guest
(VPG)
2008 $1,668 $1,583 N/A N/A N/A
2007 $1,607 $1,596 $1,545 $1,690 $1,606
2006 $1,475 $1,426 $1,434 $1,623 $1,486
2005 $1,349 $1,284 $1,349 $1,507 $1,368


Note: Full year amounts may not foot across due to rounding.
(a) Quarterly drivers in the Lodging segment include the acquisitions of
Wyndham Hotels and Resorts (October 2005) and Baymont Inn & Suites
(April 2006) from their acquisition dates forward. Therefore, the
operating statistics are not presented on a comparable basis.
(b) Numbers include affiliated rooms from the fourth quarter of 2006
forward.



Table 3
(2 of 2)
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 affiliated with Wyndham Hotels and
Resorts brand for which we receive a fee for reservation and/or other
services provided or (iii) properties managed under the CHI Limited 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.

Royalty, Marketing and Reservation Revenues: Royalty, marketing and
reservation revenues are typically based on a percentage of the gross room
revenues of each hotel. Royalty revenue is generally a fee charged to each
franchised or managed hotel for the use of one of our trade names, while
marketing and reservation revenues are fees that we collect and are
contractually obligated to spend to support marketing and reservation
activities. Marketing and reservation fees are also included in Table 4
within Marketing, Reservation and Wyndham Rewards Revenues.

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.

Annual Dues and Exchange Revenue Per Member: Represents total revenues
from annual membership dues and exchange fees generated for the period
divided by the average number of vacation exchange members during the
period.

Vacation Rental Transactions: Represents the gross number of transactions
that are generated in connection with customers booking their vacation
rental stays through us. In our European vacation rentals businesses, one
rental transaction is recorded each time a standard one-week rental is
booked; however, in the United States, one rental transaction is recorded
each time a vacation rental stay is booked, regardless of whether it is
less than or more than one week.

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

Vacation Ownership

Gross Vacation Ownership Interest Sales: Represents gross sales of
vacation ownership interests (including tele-sales upgrades, which are a
component of upgrade sales) before deferred sales and loan loss
provisions.

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

Volume per Guest (VPG): Represents revenue per guest and is calculated by
dividing the gross vacation ownership interest sales, excluding tele-sales
upgrades, which are a component of upgrade sales, by the number of tours.

General

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



Table 4
Wyndham Worldwide Corporation
ADDITIONAL DATA



Year Q1 Q2 Q3 Q4 Full Year
Lodging (a)
Number of
Properties (b) 2008 6,550 6,560 N/A N/A N/A
2007 6,450 6,460 6,460 6,540 N/A
2006 6,300 6,440 6,420 6,470 N/A
2005 6,400 6,380 6,350 6,350 N/A

Marketing,
Reservation and
Wyndham Rewards
Revenues
(in 000s) (c) 2008 $62,200 $76,507 N/A N/A N/A
2007 $61,369 $74,575 $84,820 $65,208 $285,973
2006 $58,572 $70,931 $78,856 $61,135 $269,495
2005 $45,066 $56,558 $65,812 $58,053 $225,491

Property
Management
Reimbursable
Revenue
(in 000s) (d) 2008 $27,128 $26,326 N/A N/A N/A
2007 $15,624 $22,338 $25,612 $28,414 $91,987
2006 $15,732 $19,935 $17,210 $16,263 $69,142
2005 $- $- $- $17,291 $17,291
Vacation Ownership
Deferred
Revenues
(in 000s) (e) 2008 $(81,716) $(5,240) N/A N/A N/A
2007 $ 3,906 $(4,908) $506 $(21,092) $(21,588)
2006 $12,708 $(221) $(23,491) $(10,675) $(21,679)
2005 $492 $(9,150) $(5,856) $(2,022) $(16,536)

Provision for
Loan Losses
(in 000s) (f) 2008 $82,344 $112,669 N/A N/A N/A
2007 $60,869 $75,032 $85,762 $83,644 $305,307
2006 $61,242 $55,872 $63,213 $78,680 $259,007
2005 $24,652 $27,754 $44,050 $31,644 $128,101


Note: Full year amounts may not foot across due to rounding.
(a) Information includes the acquisitions of Wyndham Hotels and Resorts
(October 2005) and Baymont Inn & Suites (April 2006) from their
acquisition dates forward. Therefore, the data is not presented on a
comparable basis.
(b) Numbers include affiliated hotels from the fourth quarter of 2006
forward.
(c) 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. Marketing and reservation fees are also
included in the above table within royalty, marketing and reservation
revenues. Wyndham Rewards revenues represent fees we receive relating
to our loyalty program.
(d) Primarily represents payroll costs in our hotel management business
that we incur and pay on behalf of property owners and for which we
are reimbursed by the property owners.
(e) Represents the revenue that is deferred under the percentage of
completion method of accounting. Under the percentage of completion
method of accounting, a portion of the total revenue from a vacation
ownership contract sale is not recognized if the construction of the
vacation resort has not yet been fully completed. This revenue will
be recognized in future periods in proportion to the costs incurred as
compared to the total expected costs for completion of construction of
the vacation resort. Positive amounts represent the recognition of
previously deferred revenues.
(f) Represents provision for estimated losses on vacation ownership
contract receivables originated during the period. Beginning January
1, 2006, the Company recorded such provision as a contra revenue to
vacation ownership interest sales on the Consolidated and Combined
Statements of Income, as required by Statement of Financial Accounting
Standards No. 152, "Accounting for Real Estate Time-Sharing
Transactions." Prior to January 1, 2006, the Company recorded such
provision, net of estimated inventory recoveries, as a separate
expense line item on the Combined Statements of Income and thus 2005
amounts are not comparable to 2006, 2007 and 2008 amounts.



Table 5
Wyndham Worldwide Corporation
SCHEDULE OF DEBT
(In millions)


Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
2008 2008 2007 2007 2007

Securitized vacation
ownership debt
Term notes $1,727 $1,278 $1,435 $1,148 $1,322
Bank conduit facility (a) 354 841 646 777 491
Securitized vacation ownership
debt (b) 2,081 2,119 2,081 1,925 1,813
Less: Current portion of
securitized vacation ownership
debt 284 268 237 304 242
Long-term securitized vacation
ownership debt $1,797 $1,851 $1,844 $1,621 $1,571

Debt:
6.00% Senior unsecured notes
(due December 2016) (c) $797 $797 $797 $797 $797
Term loan (due July 2011) 300 300 300 300 300
Revolving credit facility
(due July 2011) (d) 145 95 97 133 215
Vacation ownership bank
borrowings 196 181 164 148 130
Vacation rentals capital leases 162 165 154 153 147
Other 13 14 14 14 14

Total debt 1,613 1,552 1,526 1,545 1,603
Less: Current portion of debt 207 193 175 159 140
Long-term debt $1,406 $1,359 $1,351 $1,386 $1,463


(a) This 364-day vacation ownership bank conduit facility has availability
of $1,200 million and expires in October 2008.
(b) This debt is collateralized by $2,723 million, $2,667 million, $2,596
million, $2,428 million and $2,288 million of underlying vacation
ownership contract receivables and related assets at June 30, 2008,
March 31, 2008, December 31, 2007, September 30, 2007 and June 30,
2007, respectively.
(c) The balance at June 30, 2008 represents $800 million aggregate
principal less $3 million of unamortized discount.
(d) The Company's revolving credit facility has a borrowing capacity of
$900 million. At June 30, 2008, the Company has $67 million of
outstanding letters of credit and a remaining borrowing capacity of
$688 million.



Table 6
(1 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS


As of and For the Three Months Ended June 30, 2008

Average
Revenue
Number Average Average Per
of Number Occu- Daily Avail-
Proper- of pancy Rate able Room
Brand ties Rooms Rate (ADR) (RevPAR)

Wyndham Hotels and Resorts 82 22,412 65.4% $128.99 $84.40

Wingate Inn 156 14,289 65.8% $92.79 $61.09

Ramada 865 107,272 55.4% $84.75 $46.98

Baymont 210 18,067 51.7% $65.40 $33.82

AmeriHost Inn 15 954 50.2% $73.75 $37.02

Days Inn 1,876 152,892 53.3% $65.70 $35.05

Super 8 2,095 129,738 57.3% $59.83 $34.31

Howard Johnson 470 45,256 49.4% $65.12 $32.18

Travelodge 490 36,666 50.9% $68.83 $35.03

Knights Inn 290 19,544 43.8% $43.45 $19.03

Unmanaged, Affiliated and Managed,
Non-Proprietary Hotels (*) 14 4,367 N/A N/A N/A

Total 6,563 551,457 54.6% $71.20 $38.87


As of and For the Three Months Ended June 30, 2007

Average
Revenue
Number Average Average Per
of Number Occu- Daily Avail-
Proper- of pancy Rate able Room
Brand ties Rooms Rate (ADR) (RevPAR)

Wyndham Hotels and Resorts 75 19,945 62.7% $118.17 $74.06

Wingate Inn 154 14,172 69.9% $91.30 $63.84

Ramada 859 105,299 57.8% $78.11 $45.12

Baymont 169 14,986 55.4% $69.77 $38.63

AmeriHost Inn 54 3,673 49.7% $67.16 $33.35

Days Inn 1,862 150,984 56.3% $62.63 $35.24

Super 8 2,054 126,450 59.1% $58.17 $34.39

Howard Johnson 468 44,667 50.7% $65.05 $32.99

Travelodge 496 37,284 51.4% $66.25 $34.04

Knights Inn 252 18,019 43.3% $43.75 $18.93

Unmanaged, Affiliated and Managed,
Non-Proprietary Hotels (*) 19 6,197 N/A N/A N/A

Total 6,462 541,676 56.5% $67.86 $38.35


NOTE: A glossary of terms is included in Table 3 (2 of 2).
(*) Represents 1) affiliated properties for which we receive a fee for
reservation services provided and 2) properties managed under the CHI
Limited joint venture. These properties are not branded; as such,
certain operating statistics (such as average occupancy rate, ADR and
RevPAR) are not relevant.



Table 6
(2 of 2)
Wyndham Worldwide Corporation
HOTEL BRAND SYSTEMS DETAILS


As of and For the Six Months Ended June 30, 2008

Average
Revenue
Number Average Average Per
of Number Occu- Daily Avail-
Proper- of pancy Rate able Room
Brand ties Rooms Rate (ADR) (RevPAR)

Wyndham Hotels and Resorts 82 22,412 63.7% $123.38 $78.62

Wingate Inn 156 14,289 62.0% $92.35 $57.28

Ramada 865 107,272 52.8% $82.35 $43.46

Baymont 210 18,067 48.9% $65.52 $32.06

AmeriHost Inn 15 954 45.5% $67.98 $30.93

Days Inn 1,876 152,892 49.6% $63.98 $31.73

Super 8 2,095 129,738 52.9% $58.43 $30.93

Howard Johnson 470 45,256 46.6% $64.18 $29.91

Travelodge 490 36,666 48.0% $68.29 $32.81

Knights Inn 290 19,544 40.9% $42.27 $17.28

Unmanaged, Affiliated and Managed,
Non-Proprietary Hotels (*) 14 4,367 N/A N/A N/A

Total 6,563 551,457 51.1% $69.53 $35.55


As of and For the Six Months Ended June 30, 2007

Average
Revenue
Number Average Average Per
of Number Occu- Daily Avail-
Proper- of pancy Rate able Room
Brand ties Rooms Rate (ADR) (RevPAR)

Wyndham Hotels and Resorts 75 19,945 65.1% $113.69 $74.05

Wingate Inn 154 14,172 66.6% $89.62 $59.64

Ramada 859 105,299 54.0% $76.51 $41.32

Baymont 169 14,986 52.3% $66.30 $34.68

AmeriHost Inn 54 3,673 46.0% $64.99 $29.87

Days Inn 1,862 150,984 51.7% $61.28 $31.70

Super 8 2,054 126,450 54.2% $56.37 $30.53

Howard Johnson 468 44,667 47.1% $63.38 $29.84

Travelodge 496 37,284 48.7% $63.33 $30.86

Knights Inn 252 18,019 40.8% $41.88 $17.07

Unmanaged, Affiliated and Managed,
Non-Proprietary Hotels (*) 19 6,197 N/A N/A N/A

Total 6,462 541,676 52.6% $66.29 $34.87


NOTE: A glossary of terms is included in Table 3 (2 of 2).
(*) Represents 1) affiliated properties for which we receive a fee for
reservation services provided and 2) properties managed under the CHI
Limited joint venture. These properties are not branded; as such,
certain operating statistics (such as average occupancy rate, ADR and
RevPAR) are not relevant.



Table 7
(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)

Six
Months
Three Months Ended Ended
March 31, June 30, June 30,
2008 2008 2008

Reported EBITDA $130 $221 $351
Resolution of and adjustment to
contingent liabilities and assets (a) 3 (7) (4)
Trademark impairment (b) 28 - 28

Adjusted EBITDA $161 $214 $375

Reported PreTax Income $70 $160 $229
Resolution of and adjustment to
contingent liabilities and assets (a) 3 (7) (4)
Trademark impairment (b) 28 - 28

Adjusted PreTax Income $101 $153 $253

Reported Tax Provision $(28) $(62) $(89)
Resolution of and adjustment to
contingent liabilities and assets (c) - 3 3
Trademark impairment (c) (11) - (11)

Adjusted Tax Provision $(39) $(59) $(97)

Reported Net Income $42 $98 $140
Resolution of and adjustment to
contingent liabilities and assets 3 (4) (1)
Trademark impairment 17 - 17

Adjusted Net Income $62 $94 $156

Reported Diluted EPS $0.24 $0.55 $0.79
Resolution of and adjustment to
contingent liabilities and assets 0.01 (0.02) (0.01)
Trademark impairment 0.10 - 0.10

Adjusted Diluted EPS $0.35 $0.53 $0.88

Diluted Shares 178 178 178


Note: Amounts may not foot due to rounding.
(a) Relates to the net (benefit)/expense from the resolution of and
adjustment to certain contingent liabilities and assets.
(b) Represents an impairment charge due to the Company's initiative to
rebrand its vacation ownership trademarks to the Wyndham brand.
(c) Relates to the tax effect of the adjustments.



Table 7
(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS
(In millions, except per share data)


Six
Months
Three Months Ended Ended
March 31, June 30, June 30,
2007 2007 2007

Reported EBITDA $192 $211 $402
Separation and related costs (a) 6 7 13
Resolution of and adjustment to
contingent liabilities and assets (b) (13) (17) (30)

Adjusted EBITDA $185 $201 $385

Reported PreTax Income $139 $154 $293
Separation and related costs (a) 6 7 13
Resolution of and adjustment to
contingent liabilities and assets (b) (13) (17) (30)

Adjusted PreTax Income $132 $144 $276

Reported Tax Provision $(53) $(58) $(111)
Separation and related costs (c) (2) (3) (5)
Resolution of and adjustment to
contingent liabilities and assets (c) 4 6 10

Adjusted Tax Provision $(51) $(55) $(106)

Reported Net Income $86 $96 $182
Separation and related costs 4 4 8
Resolution of and adjustment to
contingent liabilities and assets (9) (11) (20)

Adjusted Net Income $81 $89 $170

Reported Diluted EPS $0.45 $0.52 $0.98
Separation and related costs 0.02 0.02 0.04
Resolution of and adjustment to
contingent liabilities and assets (0.05) (0.06) (0.10)

Adjusted Diluted EPS $0.43 $0.49 $0.91

Diluted Shares 190 183 186


Note: Amounts may not foot due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group).
(b) Relates to the net benefit from the resolution of and adjustment to
certain contingent liabilities and assets.
(c) Relates to the tax effect of the adjustments.



Table 8
(1 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)

Three Months Ended June 30, 2008


As Legacy As
Reported Adjustments Adjusted
Net revenues
Vacation ownership interest sales $414 $414
Service fees and membership 424 424
Franchise fees 136 136
Consumer financing 104 104
Other 54 54
Net revenues 1,132 - 1,132

Expenses
Operating 465 465
Cost of vacation ownership
interests 80 80
Marketing and reservation 218 218
General and administrative 152 7 (a) 159
Depreciation and amortization 46 46
Total expenses 961 7 968

Operating income 171 (7) 164
Other income, net (4) (4)
Interest expense 18 18
Interest income (3) (3)

Income before income taxes 160 (7) 153
Provision for income taxes 62 (3) (b) 59

Net income $98 $(4) $94

Earnings per share
Basic $0.55 $(0.02) $0.53
Diluted 0.55 (0.02) 0.53

Weighted average shares outstanding
Basic 177 177 177
Diluted 178 178 178


Note: EPS amounts may not foot across due to rounding.
(a) Relates to the net benefit from the resolution of and adjustment to
certain contingent liabilities and assets.
(b) Relates to the tax effect of the adjustment.



Table 8
(2 of 4)
Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)

Six Months Ended June 30, 2008


Trade-
Legacy mark
As Adjust- Impair- As
Reported ments ment Adjusted
Net revenues
Vacation ownership interest sales $708 $708
Service fees and membership 876 876
Franchise fees 249 249
Consumer financing 203 203
Other 108 108
Net revenues 2,144 - - 2,144

Expenses
Operating 905 905
Cost of vacation ownership interests 140 140
Marketing and reservation 427 427
General and administrative 298 4 (a) 302
Trademark impairment 28 (28) (b) -
Depreciation and amortization 90 90
Total expenses 1,888 4 (28) 1,864

Operating income 256 (4) 28 280
Other income, net (5) (5)
Interest expense 37 37
Interest income (5) (5)

Income before income taxes 229 (4) 28 253
Provision for income taxes 89 (3) (c) 11 (c) 97

Net income $140 $(1) $17 $156

Earnings per share
Basic $0.79 $(0.01) $0.10 $0.88
Diluted 0.79 (0.01) 0.10 0.88

Weighted average shares outstanding
Basic 177 177 177 177
Diluted 178 178 178 178


Note: EPS amounts may not foot across due to rounding.
(a) Relates to the net benefit from the resolution of and adjustment to
certain contingent liabilities and assets.
(b) Represents an impairment charge due to the Company's initiative to
rebrand its vacation ownership trademarks to the Wyndham brand.
(c) 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, 2007

Separa-
tion
and
Related Legacy
As Adjust- Adjust- As
Reported ments ments Adjusted
Net revenues
Vacation ownership interest sales $443 $443
Service fees and membership 387 387
Franchise fees 137 137
Consumer financing 88 88
Other 45 45
Net revenues 1,100 - - 1,100

Expenses
Operating 447 447
Cost of vacation ownership interests 104 104
Marketing and reservation 207 207
General and administrative 124 17 (b) 141
Separation and related costs 7 (7)(a) -
Depreciation and amortization 41 41
Total expenses 930 (7) 17 940

Operating income 170 7 (17) 160
Interest expense 18 18
Interest income (2) (2)

Income before income taxes 154 7 (17) 144
Provision for income taxes 58 3 (c) (6)(c) 55

Net income $96 $4 $(11) $89

Earnings per share
Basic $0.53 $0.02 $(0.06) $0.49
Diluted 0.52 0.02 (0.06) 0.49

Weighted average shares outstanding
Basic 181 181 181 181
Diluted 183 183 183 183


Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group).
(b) Relates to the net benefit from the resolution of certain contingent
liabilities.
(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, 2007

Separa-
tion
and
Related Legacy
As Adjust- Adjust- As
Reported ments ments Adjusted

Net revenues
Vacation ownership interest sales $816 $816
Service fees and membership 790 790
Franchise fees 251 251
Consumer financing 169 169
Other 86 86
Net revenues 2,112 - - 2,112

Expenses
Operating 853 853
Cost of vacation ownership interests 195 195
Marketing and reservation 404 404
General and administrative 245 30 (b) 275
Separation and related costs 13 (13)(a) -
Depreciation and amortization 79 79
Total expenses 1,789 (13) 30 1,806

Operating income 323 13 (30) 306
Interest expense 35 35
Interest income (5) (5)

Income before income taxes 293 13 (30) 276
Provision for income taxes 111 5 (c) (10)(c) 106

Net income $182 $8 $(20) $170

Earnings per share
Basic $0.98 $0.04 $(0.11) $0.92
Diluted 0.98 0.04 (0.10) 0.91

Weighted average shares outstanding
Basic 185 185 185 185
Diluted 186 186 186 186


Note: EPS amounts may not foot across due to rounding.
(a) Represents the costs incurred in connection with the Company's
separation from Cendant (now Avis Budget Group).
(b) Relates to the net benefit from the resolution of certain contingent
liabilities and assets.
(c) Relates to the tax effect of the adjustments.




SOURCE Wyndham Worldwide Corporation

###

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