Wyndham Worldwide Reports Second Quarter 2014 Earnings

Adjusted Diluted EPS Growth of 19%

Raises Full Year EBITDA and EPS Guidance

News provided by

Jul 24, 2014, 06:30 ET

PARSIPPANY, N.J., July 24, 2014 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended June 30, 2014.

SECOND QUARTER HIGHLIGHTS:

Adjusted diluted earnings per share (EPS) was $1.17, an increase of 19% from adjusted diluted EPS of $0.98 in the second quarter of 2013. Reported diluted EPS was $1.20, compared with $0.98 in the second quarter of 2013.
Revenues increased 7% compared with the second quarter of 2013.
Adjusted EBITDA increased 9% compared with the second quarter of 2013.
The Company repurchased 2.3 million shares of its common stock for $170 million.

"We delivered strong results in the second quarter, improving upon the positive trends from the first quarter," said Stephen P. Holmes, chairman and CEO. "Domestic RevPAR growth continued to accelerate, net Vacation Ownership Interest sales increased ten percent and we are seeing continued strong growth in rental transaction volume."

SECOND QUARTER 2014 OPERATING RESULTS

Second quarter revenues were $1.3 billion, an increase of 7% from the prior year period. The increase reflects growth in all of the Company's business segments.

Adjusted net income was $150 million, or $1.17 per diluted share, compared with $133 million, or $0.98 per diluted share for the same period in 2013. The performance reflects solid operating results across all of the Company's businesses and lower interest expense. EPS growth also benefited from the Company's share repurchase program.

Reported net income for the second quarter of 2014 was $153 million, or $1.20 per diluted share, compared with $133 million, or $0.98 per diluted share, for the second quarter of 2013. Reported net income included items excluded from adjusted net income. The net result of these items favorably impacted second quarter 2014 net income by $3 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $695 million for the six months ended June 30, 2014, compared with $654 million for the same period in 2013. The growth of free cash flow largely reflects favorable timing of working capital. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the six months ended June 30, 2014, net cash provided by operating activities was $793 million, compared with $758 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $283 million in the second quarter of 2014, an 8% increase over the second quarter of 2013. The increase predominantly reflects higher RevPAR.

Domestic RevPAR increased 8.8%, partially offset by a 1.8% decline in international RevPAR, resulting in a 5.6% increase in total system-wide RevPAR compared with the second quarter of 2013. International RevPAR declined due to unfavorable currency movements and growth in lower-RevPAR countries such as China.

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 12% increase compared with the second quarter of 2013. The increase was primarily due to higher RevPAR.

As of June 30, 2014, the Company's hotel system consisted of approximately 7,540 properties and 650,200 rooms, a 2.4% room increase compared with the second quarter of 2013. The development pipeline included over 970 hotels and approximately 117,000 rooms, of which 57% were international and 67% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $402 million in the second quarter of 2014, a 7% increase over the second quarter of 2013. In constant currency and excluding the impact of acquisitions, revenues were up 3%.

Exchange revenues were $168 million, flat compared with the second quarter of 2013, as a 1.7% increase in average number of members was offset by a 1.8% decline in exchange revenue per member.

Vacation rental revenues were $217 million, a 13% increase over the second quarter of 2013. Excluding the impact of foreign currency and acquisitions, vacation rental revenues were up 6%, reflecting a 4.9% increase in transaction volume and a 1.2% increase in the average net price per vacation rental.

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 2% increase compared with the second quarter of 2013.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $673 million in the second quarter of 2014, a 7% increase over the second quarter of 2013, primarily reflecting higher gross VOI sales and a lower loan loss provision.

Gross VOI sales were $496 million in the second quarter of 2014, an increase of 3% over the second quarter of 2013, reflecting a 1.1% increase in volume per guest, a 1.0% increase in tour flow and increased tele-sales upgrades.

Adjusted EBITDA for the second quarter of 2014 was $185 million, a 15% increase compared with the second quarter of 2013, primarily reflecting the revenue increases.

OTHER ITEMS

The Company repurchased 2.3 million shares of common stock for $170 million during the second quarter of 2014. From July 1 through July 23, 2014, the Company repurchased an additional 0.5 million shares for $37 million. The Company's remaining share repurchase authorization totals $311 million as of July 23, 2014.
Reported net interest expense in the second quarter of 2014 was $26 million, compared with $32 million in the second quarter of 2013, reflecting lower rates associated with a fixed-for-floating rate swap and a $2 million benefit from a value added tax adjustment.

BALANCE SHEET INFORMATION AS OF JUNE 30, 2014:

Cash and cash equivalents of $247 million, compared with $194 million at December 31, 2013
Vacation ownership contract receivables, net, of $2.7 billion, compared with $2.8 billion at December 31, 2013
Vacation ownership and other inventory of $1.0 billion, unchanged from December 31, 2013
Securitized vacation ownership debt of $1.9 billion, unchanged from December 31, 2013
Long-term debt of $2.8 billion, compared with $2.9 billion at December 31, 2013. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of June 30, 2014, compared with $1.3 billion as of December 31, 2013

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

OUTLOOK

Note to Editors: The guidance excludes possible future share repurchases, while analysts' estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.

For the full year 2014, the Company provides the following guidance:

Revenues of approximately $5.250 - $5.350 billion (unchanged)
Adjusted EBITDA of approximately $1.230 - $1.245 billion up from $1.215 - $1.240 billion
Adjusted EPS of approximately $4.34 - $4.44 based on a diluted share count of 128 million up from $4.23 - $4.33 based on a diluted share count of 130 million

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Thursday, July 24, 2014 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company's website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available on the website for approximately 90 days beginning at noon EDT on July 24, 2014. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on July 24, 2014, at 888-296-6944.

The Company will post guidance information on its website following the conference call.

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 and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. 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 and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company's reported results.

ABOUT WYNDHAM WORLDWIDE CORPORATION

One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands. The world's largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world's best-known hotel brands, with approximately 7,500 franchised hotels and 650,200 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world's largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 107,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 200 vacation ownership resorts serving approximately 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 associates globally. For more information, 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 and related financial and operating measures.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company's Annual Report on Form 10-K, filed with the SEC on February 14, 2014. Except for the Company's ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

									Table 1
									(1 of 2)
Wyndham Worldwide Corporation
OPERATING RESULTS OF REPORTABLE SEGMENTS
(In millions)


In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and "EBITDA", which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, 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, 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 attributable to Wyndham shareholders for the three months ended June 30, 2014 and 2013:

	Three Months Ended June 30,
	2014				2013
	Net Revenues		EBITDA		Net Revenues		EBITDA
Lodging	$	283	$	87	$	262	$	78
Vacation Exchange and Rentals		402		89		376		85
Vacation Ownership		673		185		630		161
Total Reportable Segments		1,358		361		1,268		324
Corporate and Other ^(a)		(15)		(35)		(15)		(27)
Total Company	$	1,343	$	326	$	1,253	$	297

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

			Three Months Ended June 30,
			2014				2013
EBITDA			$	326			$	297
Depreciation and amortization				59				54
Interest expense				29				34
Interest income				(3)				(2)
Income before income taxes				241				211
Provision for income taxes				88				78
Net income attributable to Wyndham shareholders			$	153			$	133

__________
^(a) Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):


	Three Months Ended June 30,
	2014				2013
	Net Revenues		Adjusted EBITDA		Net Revenues		Adjusted EBITDA
Lodging	$	283	$	87	$	262	$	78
Vacation Exchange and Rentals		402		87		376		85
Vacation Ownership		673		185		630		161
Total Reportable Segments		1,358		359		1,268		324
Corporate and Other		(15)		(35)		(15)		(27)
Total Company	$	1,343	$	324	$	1,253	$	297

									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 attributable to Wyndham shareholders for the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014				2013
	Net Revenues		EBITDA		Net Revenues		EBITDA
Lodging	$	520	$	151	$	485	$	137
Vacation Exchange and Rentals		781		174		750		179
Vacation Ownership		1,266		300		1,179		272
Total Reportable Segments		2,567		625		2,414		588
Corporate and Other ^(a)		(31)		(69)		(27)		(57)
Total Company	$	2,536	$	556	$	2,387	$	531

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

			Six Months Ended June 30,
			2014				2013
EBITDA			$	556			$	531
Depreciation and amortization				115				106
Interest expense				56				66
Early extinguishment of debt				-				111
Interest income				(5)				(4)
Income before income taxes				390				252
Provision for income taxes				146				92
Net income				244				160
Net income attributable to noncontrolling interest				(1)				-
Net income attributable to Wyndham shareholders			$	243			$	160

__________
^(a) Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the six months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):


	Six Months Ended June 30,
	2014				2013
	Net Revenues		Adjusted EBITDA		Net Revenues		Adjusted EBITDA
Lodging	$	520	$	155	$	485	$	137
Vacation Exchange and Rentals		781		182		750		179
Vacation Ownership		1,266		300		1,179		274
Total Reportable Segments		2,567		637		2,414		590
Corporate and Other		(31)		(69)		(27)		(57)
Total Company	$	2,536	$	568	$	2,387	$	533

									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,
		2014		2013		2014		2013
Net revenues
	Service and membership fees	$	616	$	583	$	1,205	$	1,152
	Vacation ownership interest sales		382		347		685		611
	Franchise fees		166		152		293		274
	Consumer financing		106		106		211		211
	Other		73		65		142		139
Net revenues			1,343		1,253		2,536		2,387

Expenses
	Operating		572		548		1,106		1,056
	Cost of vacation ownership interests		42		32		81		64
	Consumer financing interest		17		20		35		40
	Marketing and reservation		206		181		387		357
	General and administrative		181		177		376		342
	Depreciation and amortization		59		54		115		106
Total expenses			1,077		1,012		2,100		1,965

Operating income			266		241		436		422
Other income, net			(1)		(2)		(5)		(3)
Interest expense			29		34		56		66
Early extinguishment of debt			-		-		-		111
Interest income			(3)		(2)		(5)		(4)

Income before income taxes			241		211		390		252
Provision for income taxes			88		78		146		92
Net income			153		133		244		160
Net income attributable to noncontrolling interest			-		-		(1)		-
Net income attributable to Wyndham shareholders		$	153	$	133	$	243	$	160

Earnings per share
	Basic	$	1.21	$	0.99	$	1.91	$	1.18
	Diluted		1.20		0.98		1.89		1.17

Weighted average shares outstanding
	Basic		127		135		127		136
	Diluted		128		136		129		137
__________

Note: For a description of adjustments to Net Income, see Table 8.

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

The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:

		Year		Q1		Q2		Q3		Q4		Full Year
Lodging
	Number of Rooms	2014		646,900		650,200		N/A		N/A		N/A
		2013		631,800		635,100		638,300		645,400		N/A
		2012		609,300		608,300		618,100		627,400		N/A
		2011		609,600		612,900		611,200		613,100		N/A

	RevPAR	2014	$	32.30	$	40.11		N/A		N/A		N/A
		2013	$	31.05	$	38.00	$	41.78	$	33.07	$	36.00
		2012	$	29.73	$	37.23	$	40.39	$	31.86	$	34.80
		2011	$	27.71	$	35.38	$	39.49	$	30.65	$	33.34

Vacation Exchange and Rentals
	Average Number of Members (in 000s)	2014		3,727		3,748		N/A		N/A		N/A
		2013		3,668		3,686		3,711		3,728		3,698
		2012		3,684		3,670		3,672		3,670		3,674
		2011		3,766		3,755		3,744		3,734		3,750

	Exchange Revenue Per Member	2014	$	200.78	$	179.17		N/A		N/A		N/A
		2013	$	210.96	$	182.42	$	169.95	$	161.21	$	181.02
		2012	$	204.56	$	177.07	$	171.14	$	165.86	$	179.68
		2011	$	205.64	$	178.46	$	172.38	$	161.68	$	179.59

	Vacation Rental Transactions (in 000s) ^(a)	2014		429		376		N/A		N/A		N/A
		2013		423		355		433		273		1,483
		2012		418		325		390		259		1,392
		2011		398		328		370		250		1,347

	Average Net Price Per Vacation Rental^(a)	2014	$	410.04	$	577.13		N/A		N/A		N/A
		2013	$	392.64	$	540.38	$	677.81	$	506.62	$	532.11
		2012	$	379.40	$	524.40	$	635.44	$	484.69	$	504.55
		2011	$	377.71	$	549.09	$	701.81	$	497.04	$	530.78

Vacation Ownership ^(a)
	Gross Vacation Ownership Interest (VOI) Sales (in 000s) ^(b)	2014	$	410,000	$	496,000		N/A		N/A		N/A
		2013	$	384,000	$	481,000	$	536,000	$	488,000	$	1,889,000
		2012	$	384,000	$	460,000	$	502,000	$	435,000	$	1,781,000
		2011	$	319,000	$	412,000	$	455,000	$	409,000	$	1,595,000

	Tours (in 000s) ^(c)	2014		170		208		N/A		N/A		N/A
		2013		163		206		225		195		789
		2012		148		186		207		183		724
		2011		137		177		197		173		685

	Volume Per Guest (VPG) ^(c)	2014	$	2,272	$	2,280		N/A		N/A		N/A
		2013	$	2,211	$	2,256	$	2,278	$	2,370	$	2,281
		2012	$	2,414	$	2,361	$	2,315	$	2,225	$	2,324
		2011	$	2,192	$	2,227	$	2,197	$	2,296	$	2,229

Note:	Full year amounts may not add across due to rounding.
^(a)	Includes the impact of acquisitions from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.
^(b)	Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time beginning in the second quarter of 2012 (see Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).
^(c)	Includes the impact of WAAM Just-in-Time related tours beginning in the second quarter of 2012.




ADDITIONAL DATA


		Year		Q1		Q2		Q3		Q4		Full Year
Lodging
	Number of Properties	2014		7,500		7,540		N/A		N/A		N/A
		2013		7,380		7,410		7,440		7,490		N/A
		2012		7,150		7,170		7,260		7,340		N/A
		2011		7,190		7,220		7,190		7,210		N/A

Vacation Ownership
	Provision for Loan Losses (in 000s) ⁽^*⁾	2014	$	60,000	$	70,000		N/A		N/A		N/A
		2013	$	84,000	$	90,000	$	102,000	$	73,000	$	349,000
		2012	$	96,000	$	100,000	$	124,000	$	89,000	$	409,000
		2011	$	79,000	$	80,000	$	96,000	$	83,000	$	339,000

Note:	Full year amounts may not add across due to rounding.
(*)	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.

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, or company owned, (ii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided and (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 paid annual membership dues as of the end of the period or who are within the allowed grace period. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with the Company's 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 during the period in connection with customers booking their vacation rental stays through the Company. 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 during the period divided by the number of vacation rental transactions during the period.

Vacation Ownership

Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM 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.

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

Volume per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. The Company has 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 2011-2014.

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)


		2014										2013
			Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Lodging
	Royalties and Franchise Fees	$	68		$ 88		N/A		N/A		N/A	$	64	$	79	$	91	$	75	$	309
	Marketing, Reservation and Wyndham Rewards Revenues ^(a)		76		101		N/A		N/A		N/A		73		92		118		83		365
	Hotel Management Reimbursable Revenues ^(b)		37		39		N/A		N/A		N/A		25		38		37		35		135
	Intersegment Trademark Fees		9		11		N/A		N/A		N/A		8		10		11		10		39
	Owned Hotel Revenues		24		20		N/A		N/A		N/A		26		20		18		19		84
	Ancillary Revenues ^(c)		23		24		N/A		N/A		N/A		26		23		22		23		95
	Total Lodging		237		283		N/A		N/A		N/A		222		262		297		245		1,027

Vacation Exchange and Rentals
	Exchange Revenues		187		168		N/A		N/A		N/A		193		168		158		150		669
	Rental Revenues		176		217		N/A		N/A		N/A		166		192		293		138		789
	Ancillary Revenues ^(d)		16		17		N/A		N/A		N/A		15		16		19		17		68
	Total Vacation Exchange and Rentals		379		402		N/A		N/A		N/A		374		376		470		305		1,526

Vacation Ownership
	Vacation Ownership Interest Sales		303		382		N/A		N/A		N/A		263		347		384		384		1,379
	Consumer Financing		105		106		N/A		N/A		N/A		105		106		107		108		426
	Property Management Fees		143		145		N/A		N/A		N/A		146		141		143		137		567
	WAAM Fee-for-Service Commissions		33		30		N/A		N/A		N/A		24		30		33		20		107
	Ancillary Revenues ^(e)		9		10		N/A		N/A		N/A		11		6		10		9		36
	Total Vacation Ownership		593		673		N/A		N/A		N/A		549		630		677		658		2,515
Total Reportable Segments		$	1,209		$ 1,358		N/A		N/A		N/A	$	1,145	$	1,268	$	1,444	$	1,208	$	5,068


		2012										2011
			Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Lodging
	Royalties and Franchise Fees	$	62	$	80	$	88	$	71	$	301	$	58	$	75	$	85	$	66	$	284
	Marketing, Reservation and Wyndham Rewards Revenues ^(a)		68		99		98		80		345		54		75		94		76		299
	Hotel Management Reimbursable Revenues ^(b)		21		22		25		23		91		19		19		21		20		79
	Intersegment Trademark Fees ^(f)		8		9		9		8		34		1		2		3		4		10
	Owned Hotel Revenues		8		8		7		18		41		-		-		-		5		5
	Ancillary Revenues ^(c)		18		15		22		23		78		17		19		19		17		72
	Total Lodging		185		233		249		223		890		149		190		222		188		749

Vacation Exchange and Rentals
	Exchange Revenues		188		162		157		153		660		194		168		161		150		673
	Rental Revenues		159		170		248		125		702		150		180		260		125		715
	Ancillary Revenues ^(d)		14		16		15		15		60		12		13		15		16		56
	Total Vacation Exchange and Rentals		361		348		420		293		1,422		356		361		436		291		1,444

Vacation Ownership
	Vacation Ownership Interest Sales		271		342		373		337		1,323		222		313		320		295		1,150
	Consumer Financing		103		102		106		110		421		102		103		105		105		415
	Property Management Fees		110		108		117		125		460		110		108		105		101		424
	WAAM Fee-for-Service Commissions		12		11		4		6		33		10		11		23		21		65
	Ancillary Revenues ^(e)		5		7		8		12		32		6		6		6		5		23
	Total Vacation Ownership		501		570		608		590		2,269		450		541		559		527		2,077
Total Reportable Segments		$	1,047	$	1,151	$	1,277	$	1,106	$	4,581	$	955	$	1,092	$	1,217	$	1,006	$	4,270


Note: Full year amounts may not add across due to rounding.
^(a)	Marketing and reservation revenues represent fees the Company receives 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 the Company receives relating to its loyalty program.
^(b)	Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During both Q1 and Q2 2014, reimbursable revenues of $2 million, which eliminate in consolidation, were charged to the Company's vacation ownership business. During Q2, Q3 and Q4 2013, such amounts were $1 million, $3 million and $2 million, respectively.
^(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.
^(f)	During 2011, $3 million, $1 million and $2 million of intersegment trademark fees were recorded as a reduction of expenses in Q1, Q2 and Q3, respectively. As such, total inter-segment trademark fees for 2011 were $16 million.

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


	June 30, 2014		March 31, 2014		December 31, 2013		September 30, 2013		June 30, 2013

Securitized vacation ownership debt ^(a)
Term notes	$	1,600	$	1,823	$	1,648	$	1,615	$	1,569
Bank conduit facility ^(b)		291		156		262		273		289
Total securitized vacation ownership debt ^(c)		1,891		1,979		1,910		1,888		1,858
Less: Current portion of securitized vacation ownership debt		187		192		184		186		217
Long-term securitized vacation ownership debt	$	1,704	$	1,787	$	1,726	$	1,702	$	1,641


Debt:
Revolving credit facility (due July 2018) ^(d)	$	16	$	10	$	23	$	74	$	41
Commercial paper ^(e)		107		184		210		164		168
$315 million 6.00% senior unsecured notes (due December 2016)^(f)		318		318		318		318		319
$300 million 2.95% senior unsecured notes (due March 2017)		299		299		298		298		298
$14 million 5.75% senior unsecured notes (due February 2018)		14		14		14		14		14
$450 million 2.50% senior unsecured notes (due March 2018)		448		447		447		447		447
$40 million 7.375% senior unsecured notes (due March 2020)		40		40		40		40		40
$250 million 5.625% senior unsecured notes (due March 2021)		246		246		246		246		246
$650 million 4.25% senior unsecured notes (due March 2022)^(g)		646		645		643		644		644
$400 million 3.90% senior unsecured notes (due March 2023)^(h)		403		395		387		396		397
Capital leases		186		188		191		185		184
Other		99		100		114		117		133
Total long-term debt		2,822		2,886		2,931		2,943		2,931
Less: Current portion of long-term debt		50		52		49		55		52
Long-term debt	$	2,772	$	2,834	$	2,882	$	2,888	$	2,879

__________

^(a)

The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") 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 August 2015 and borrowing capacity of $650 million. As of June 30, 2014, this facility had a remaining borrowing capacity of $359 million.

^(c)

This debt is collateralized by $2,287 million, $2,328 million, $2,314 million, $2,306 million and $2,414 million of underlying vacation ownership contract receivables and related assets as of June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively.

^(d)

Represents a $1.5 billion revolving credit facility that expires in July 2018. As of June 30, 2014, the Company had $9 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $107 million, the remaining borrowing capacity was $1.4 billion as of June 30, 2014.

^(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.1 billion, as of June 30, 2014.

^(f)

Includes unamortized gains from the settlement of a derivative in the amount of $3 million as of June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013 and $4 million as of June 30, 2013.

^(g)

Includes a $2 million increase and $2 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

^(h)

Includes a $5 million increase and $10 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

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


		As of and For the Three Months Ended June 30, 2014
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		178	39,816	66.7%	$117.57	$78.43

TRYP by Wyndham		117	16,740	66.9%	$96.01	$64.19

Wingate by Wyndham		158	14,436	68.7%	$88.24	$60.65

Hawthorn Suites by Wyndham		98	9,737	68.1%	$77.37	$52.72

Ramada		829	114,195	57.2%	$79.00	$45.15

Baymont		346	28,325	56.9%	$66.36	$37.78

Days Inn		1,807	146,139	55.8%	$64.86	$36.20

Super 8		2,436	155,711	60.0%	$50.77	$30.46

Howard Johnson		439	46,214	50.4%	$62.88	$31.68

Travelodge		425	31,075	54.3%	$67.35	$36.60

Microtel Inns & Suites by Wyndham		318	22,744	63.8%	$67.26	$42.88

Knights Inn		383	23,472	46.4%	$46.78	$21.70

Dream		5	989	72.9%	$246.03	$179.38

Night		3	630	72.8%	$158.86	$115.62

	Total Lodging	7,542	650,223	58.0%	$69.13	$40.11

Vacation Ownership
Wyndham Vacation Ownership resorts		201	23,450	N/A	N/A	N/A

	Total Wyndham Worldwide	7,743	673,673


		As of and For the Three Months Ended June 30, 2013
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		136	32,400	63.5%	$118.31	$75.10

TRYP by Wyndham		103	14,344	64.6%	$95.59	$61.75

Wingate by Wyndham		158	14,493	65.0%	$86.67	$56.34

Hawthorn Suites by Wyndham		91	9,118	67.6%	$72.51	$49.02

Ramada		837	114,691	54.4%	$80.42	$43.78

Baymont		325	26,860	55.6%	$63.70	$35.42

Days Inn		1,833	148,411	51.7%	$64.78	$33.46

Super 8		2,356	150,467	59.0%	$52.70	$31.08

Howard Johnson		446	45,089	48.2%	$62.57	$30.18

Travelodge		437	32,607	51.9%	$66.48	$34.50

Microtel Inns & Suites by Wyndham		310	22,080	60.7%	$64.85	$39.34

Knights Inn		374	22,963	42.5%	$45.08	$19.17

Dream		5	990	75.5%	$262.46	$198.18

Night		3	630	61.5%	$169.06	$103.91

	Total Lodging	7,414	635,143	55.2%	$68.78	$38.00

Vacation Ownership
Wyndham Vacation Ownership resorts		190	23,410	N/A	N/A	N/A

	Total Wyndham Worldwide	7,604	658,553
_______________
NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

						Table 6
						(2 of 2)
Wyndham Worldwide Corporation
BRAND SYSTEM DETAILS


		As of and For the Six Months Ended June 30, 2014
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		178	39,816	61.1%	$115.42	$70.55

TRYP by Wyndham		117	16,740	59.2%	$91.64	$54.22

Wingate by Wyndham		158	14,436	63.9%	$85.95	$54.93

Hawthorn Suites by Wyndham		98	9,737	64.7%	$76.76	$49.66

Ramada		829	114,195	53.7%	$79.22	$42.52

Baymont		346	28,325	52.0%	$64.25	$33.40

Days Inn		1,807	146,139	50.2%	$63.56	$31.92

Super 8		2,436	155,711	55.8%	$49.63	$27.69

Howard Johnson		439	46,214	47.0%	$62.41	$29.32

Travelodge		425	31,075	49.5%	$64.82	$32.08

Microtel Inns & Suites by Wyndham		318	22,744	58.8%	$65.08	$38.24

Knights Inn		383	23,472	43.6%	$45.50	$19.84

Dream		5	989	73.4%	$217.94	$159.91

Night		3	630	66.3%	$139.04	$92.20

	Total Lodging	7,542	650,223	53.5%	$67.78	$36.23

Vacation Ownership
Wyndham Vacation Ownership resorts		201	23,450	N/A	N/A	N/A

	Total Wyndham Worldwide	7,743	673,673


		As of and For the Six Months Ended June 30, 2013
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		136	32,400	60.2%	$115.98	$69.80

TRYP by Wyndham		103	14,344	59.3%	$96.39	$57.15

Wingate by Wyndham		158	14,493	61.0%	$85.05	$51.88

Hawthorn Suites by Wyndham		91	9,118	63.1%	$71.57	$45.19

Ramada		837	114,691	51.5%	$79.58	$41.01

Baymont		325	26,860	50.7%	$62.15	$31.50

Days Inn		1,833	148,411	47.3%	$63.27	$29.91

Super 8		2,356	150,467	54.4%	$51.38	$27.96

Howard Johnson		446	45,089	45.6%	$61.78	$28.17

Travelodge		437	32,607	47.8%	$64.89	$31.02

Microtel Inns & Suites by Wyndham		310	22,080	56.4%	$63.01	$35.56

Knights Inn		374	22,963	40.4%	$43.34	$17.53

Dream		5	990	68.5%	$220.79	$151.31

Night		3	630	57.5%	$146.22	$84.14

	Total Lodging	7,414	635,143	51.3%	$67.35	$34.55

Vacation Ownership
Wyndham Vacation Ownership resorts		190	23,410	N/A	N/A	N/A

	Total Wyndham Worldwide	7,604	658,553
_______________
NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

												Table 7
												(1 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION
(In millions)


Three months ended March 31, 2014	Net Revenues		Reported EBITDA		Executive Departure Costs		Venezuela Currency Devaluation^(b)		VAT Adjustment^(c)		Adjusted EBITDA
Lodging	$	237	$	64	$	4	$	-	$	-	$	68
Vacation Exchange and Rentals		379		85		-		10		-		95
Vacation Ownership		593		115		-		-		-		115
Total Reportable Segments		1,209		264		4		10		-		278
Corporate and Other ^(a)		(16)		(34)		-		-		-		(34)
Total Company	$	1,193	$	230	$	4	$	10	$	-	$	244

Three months ended June 30, 2014
Lodging	$	283	$	87	$	-	$	-	$	-	$	87
Vacation Exchange and Rentals		402		89		-		-		(2)		87
Vacation Ownership		673		185		-		-		-		185
Total Reportable Segments		1,358		361		-		-		(2)		359
Corporate and Other ^(a)		(15)		(35)		-		-		-		(35)
Total Company	$	1,343	$	326	$	-	$	-	$	(2)	$	324

________________

^(a)

Includes the elimination of transactions between segments.

^(b)

Represents the devaluation of the official exchange rate of Venezuela.

^(c)

Reversal of a reserve for value-added taxes.

														Table 7
														(2 of 2)
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATION
(In millions)


Three months ended March 31, 2013	Net Revenues		Reported EBITDA		Legacy Adjustments ^(b)		Acquisition Costs ^(c)		Restructuring Costs ^(d)		Asset Impairment ^(e)		Adjusted EBITDA
Lodging	$	222	$	58	$	-	$	-	$	-	$	-	$	58
Vacation Exchange and Rentals		374		94		-		-		-		-		94
Vacation Ownership		549		111		-		2		-		-		113
Total Reportable Segments		1,145		263		-		2		-		-		265
Corporate and Other ^(a)		(12)		(29)		-		-		-		-		(29)
Total Company	$	1,133	$	234	$	-	$	2	$	-	$	-	$	236

Three months ended June 30, 2013
Lodging	$	262	$	78	$	-	$	-	$	-	$	-	$	78
Vacation Exchange and Rentals		376		85		-		-		-		-		85
Vacation Ownership		630		161		-		-		-		-		161
Total Reportable Segments		1,268		324		-		-		-		-		324
Corporate and Other ^(a)		(15)		(27)		-		-		-		-		(27)
Total Company	$	1,253	$	297	$	-	$	-	$	-	$	-	$	297

Three months ended September 30, 2013
Lodging	$	297	$	95	$	-	$	-	$	-	$	-	$	95
Vacation Exchange and Rentals		470		141		-		-		-		-		141
Vacation Ownership		677		176		-		-		-		-		176
Total Reportable Segments		1,444		412		-		-		-		-		412
Corporate and Other ^(a)		(17)		(33)		(1)		-		-		-		(34)
Total Company	$	1,427	$	379	$	(1)	$	-	$	-	$	-	$	378

Three months ended December 31, 2013
Lodging	$	245	$	47	$	-	$	-	$	9	$	8	$	64
Vacation Exchange and Rentals		305		36		-		-		-		-		36
Vacation Ownership		658		172		-		-		-		-		172
Total Reportable Segments		1,208		255		-		-		9		8		272
Corporate and Other ^(a)		(13)		(33)		-		-		-		-		(33)
Total Company	$	1,195	$	222	$	-	$	-	$	9	$	8	$	239

Twelve months ended December 31, 2013
Lodging	$	1,027	$	279	$	-	$	-	$	9	$	8	$	296
Vacation Exchange and Rentals		1,526		356		-		-		-		-		356
Vacation Ownership		2,515		619		-		2		-		-		621
Total Reportable Segments		5,068		1,254		-		2		9		8		1,273
Corporate and Other ^(a)		(59)		(122)		1		-		-		-		(121)
Total Company	$	5,009	$	1,132	$	1	$	2	$	9	$	8	$	1,152

________________

Note: The sum of the quarters may not agree to the twelve months ended December 31, 2013 due to rounding.

^(a)

Includes the elimination of transactions between segments.

^(b)

Relates to a net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.

^(c)

Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013).

^(d)

Relates to costs incurred as a result of an organizational realignment initiative.

^(e)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark.

											Table 8
											(1 of 3)

Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)

		Three Months Ended June 30, 2014

		As Reported		Legacy Adjustments			VAT Adjustment ^(b)			As Adjusted non-GAAP
Net revenues
	Service and membership fees	$	616	$			$			$	616
	Vacation ownership interest sales		382								382
	Franchise fees		166								166
	Consumer financing		106								106
	Other		73								73
Net revenues			1,343		-			-			1,343

Expenses
	Operating		572								572
	Cost of vacation ownership interests		42								42
	Consumer financing interest		17								17
	Marketing and reservation		206								206
	General and administrative		181					2			183
	Depreciation and amortization		59								59
Total expenses			1,077		-			2			1,079

Operating income			266		-			(2)			264
Other income, net			(1)								(1)
Interest expense			29					2			31
Interest income			(3)								(3)

Income before income taxes			241		-			(4)			237
Provision for income taxes			88		1	^(a)		(2)	^(c)		87
Net income attributable to Wyndham shareholders		$	153	$	(1)		$	(2)		$	150

Earnings per share
	Basic	$	1.21	$	-		$	(0.02)		$	1.18
	Diluted		1.20		-			(0.02)			1.17

Weighted average shares outstanding
	Basic		127		127			127			127
	Diluted		128		128			128			128
__________
The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

Note:

EPS amounts may not add due to rounding.

^(a)

Relates to the reversal of a state tax accrual.

^(b)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

^(c)

Relates to the tax effect of the adjustment.

																	Table 8
																	(2 of 3)

Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)

		Six Months Ended June 30, 2014


		As Reported		Executive Departure Costs ^(a)			Venezuela Currency Devaluation ^(c)			Legacy Adjustments			VAT Adjustment^(e)			As Adjusted non-GAAP
Net revenues
	Service and membership fees	$	1,205	$			$			$			$			$	1,205
	Vacation ownership interest sales		685														685
	Franchise fees		293														293
	Consumer financing		211														211
	Other		142														142
Net revenues			2,536		-			-			-			-			2,536

Expenses
	Operating		1,106					(10)									1,096
	Cost of vacation ownership interests		81														81
	Consumer financing interest		35														35
	Marketing and reservation		387														387
	General and administrative		376		(4)									2			374
	Depreciation and amortization		115														115
Total expenses			2,100		(4)			(10)			-			2			2,088

Operating income			436		4			10			-			(2)			448
Other income, net			(5)														(5)
Interest expense			56											2			58
Interest income			(5)														(5)

Income before income taxes			390		4			10			-			(4)			400
Provision for income taxes			146		1	^(b)		1	^(b)		1	^(d)		(2)	^(b)		147

Net income			244		3			9			(1)			(2)			253
Net income attributable to noncontrolling interest			(1)		-			-			-			-			(1)

Net income attributable to Wyndham shareholders		$	243	$	3		$	9		$	(1)		$	(2)		$	252

Earnings per share
	Basic	$	1.91	$	0.02		$	0.07		$	-			$ (0.02)		$	1.98
	Diluted		1.89		0.02			0.07			-			(0.02)			1.96

Weighted average shares outstanding
	Basic		127		127			127			127			127			127
	Diluted		129		129			129			129			129			129
__________
The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

Note: EPS amounts may not add due to rounding.

(a)

Related to costs associated with an executive's departure at the Company's lodging business.

(b)

Relates to the tax effect of the adjustment.

(c)

Represents the devaluation of the official exchange rate of Venezuela at the Company's vacation exchange and rental business.

(d)

Relates to the reversal of a state tax accrual.

(e)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

														Table 8
														(3 of 3)

Wyndham Worldwide Corporation
NON-GAAP FINANCIAL INFORMATION
(In millions, except per share data)

		Six Months Ended June 30, 2013


		As Reported		Legacy Adjustments			Acquisition Costs			Early Extinguishment of Debt			As Adjusted non-GAAP
Net revenues
	Service fees and membership	$	1,152										$	1,152
	Vacation ownership interest sales		611											611
	Franchise fees		274											274
	Consumer financing		211											211
	Other		139											139
Net revenues			2,387		-			-			-			2,387

Expenses
	Operating		1,056					(2)	^(b)					1,054
	Cost of vacation ownership interests		64											64
	Consumer financing interest		40											40
	Marketing and reservation		357											357
	General and administrative		342											342
	Depreciation and amortization		106											106
Total expenses			1,965		-			(2)			-			1,963

Operating income			422		-			2			-			424
Other income, net			(3)											(3)
Interest expense			66											66
Early extinguishment of debt			111								(111)	^(c)		-
Interest income			(4)											(4)

Income before income taxes			252		-			2			111			365
Provision for income taxes			92		(1)	^(a)		1	^(d)		42	^(d)		134

Net income		$	160	$	1		$	1		$	69		$	231

Earnings per share
	Basic	$	1.18	$	0.01		$	0.01		$	0.51		$	1.71
	Diluted		1.17		0.01			0.01			0.50			1.69

Weighted average shares outstanding
	Basic		136		136			136			136			136
	Diluted		137		137			137			137			137
__________
The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

Note: EPS amounts may not add due to rounding.
^(a)	Relates to a state tax payment for legacy tax matters.
^(b)	Relates to the costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013) at the Company's vacation ownership business.
^(c)	Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior unsecured notes and the remaining portion of the 9.875% senior unsecured notes.
^(d)	Relates to the tax effect of the adjustment.

										Table 9
Wyndham Worldwide Corporation
NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION
(In millions)

FREE CASH FLOW
We define free cash flow to be net cash provided by operating activities less property and equipment additions which we also refer to as capital expenditures.
We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.

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

	Six Months Ended June 30,
	2014				2013

Net cash provided by operating activities	$	793			$	758
Less: Property and equipment additions		(98)				(104)
Free cash flow	$	695			$	654


GROSS VOI SALES

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

Year
2014	Q1		Q2		Q3		Q4		Full Year

Gross VOI sales ^(a)	$	410	$	496		N/A		N/A		N/A
Less: Sales under WAAM Fee-for-Service		(44)		(40)		N/A		N/A		N/A
Gross VOI sales, net of WAAM Fee-for-Service sales		366		456		N/A		N/A		N/A
Less: Loan loss provision		(60)		(70)		N/A		N/A		N/A
Less: Impact of percentage-of-completion accounting		(3)		(4)		N/A		N/A		N/A
Vacation ownership interest sales ^(a)	$	303	$	382		N/A		N/A		N/A

2013

Gross VOI sales ^(a)	$	384	$	481	$	536	$	488	$	1,889
Less: Sales under WAAM Fee-for-Service		(36)		(44)		(51)		(29)		(160)
Gross VOI sales, net of WAAM Fee-for-Service sales		347		437		486		459		1,729
Less: Loan loss provision		(84)		(90)		(102)		(73)		(349)
Less: Impact of percentage of completion accounting		-		-		-		(1)		(1)
Vacation ownership interest sales ^(a)	$	263	$	347	$	384	$	384	$	1,379

2012

Gross VOI sales ^(a)	$	384	$	460	$	502	$	435	$	1,781
Less: Sales under WAAM Fee-for-Service		(17)		(18)		(5)		(10)		(49)
Gross VOI sales, net of WAAM Fee-for-Service sales		367		442		497		426		1,732
Less: Loan loss provision		(96)		(100)		(124)		(89)		(409)
Vacation ownership interest sales ^(a)	$	271	$	342	$	373	$	337	$	1,323

2011

Gross VOI sales	$	319	$	412	$	455	$	409	$	1,595
Less: Sales under WAAM Fee-for-Service		(18)		(19)		(38)		(31)		(106)
Gross VOI sales, net of WAAM Fee-for-Service 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
_____________
Note: Amounts may not add due to rounding.
^(a) Includes VOI sales under WAAM Just-in-Time beginning in the second quarter of 2012.



The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):

	Q1		Q2		Q3		Q4		Full Year

2014	$	25	$	21		N/A		N/A		N/A
2013	$	24	$	18	$	22	$	25	$	89
2012	$	27	$	20	$	22	$	28	$	97
2011	$	18	$	18	$	21	$	11	$	68

SOURCE Wyndham Worldwide Corporation

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