Wyndham Posts Higher Fourth Quarter, Full Year Profits
Wyndham Posts Higher Fourth Quarter, Full Year Profits
Wyndham Worldwide Corporation reported fourth quarter revenues increased 3 percent from the prior year period to $937 million. Excluding the $47 million of vacation ownership revenue associated with the percentage-of-completion (POC) accounting method in the fourth quarter of 2009, fourth quarter 2010 adjusted revenue growth was 8 percent. The company said its adjusted revenue growth reflects continued sales momentum across its three business units and incremental contributions from acquisitions.
For the fourth quarter of 2010, adjusted net income increased by 15 percent to $84 million, compared with $73 million for the same period in 2009. The increase primarily reflects higher revPAR in the lodging business, strong operational performance by the vacation ownership business and a lower effective tax rate. Adjusted net income for the fourth quarter of 2010 excludes a $6 million after-tax restructuring charge, a $2 million after-tax loss incurred for the repurchase of a portion of the company's 3.5 percent convertible notes and a $3 million after-tax net benefit related to the adjustment and resolution of certain contingent liabilities and assets.
Reported net income for the fourth quarter of 2010 was $78 million, or $0.43 per diluted share, compared with net income of $73 million, or $0.40 per diluted share, for the fourth quarter of 2009. Reported revenues for full year 2010 were $3.9 billion, an increase of 3 percent over the prior-year period. Excluding the $187 million of vacation ownership revenue associated with the POC accounting method for the full year 2009, full year 2010 adjusted revenue growth was 8 percent. The adjusted revenue growth reflects continued sales momentum across the company's three business units and incremental contributions from acquisitions.
Adjusted net income for the full year 2010 increased by 13 percent to $368 million, compared with $327 million for the prior-year period. The increase primarily reflects higher revPAR in the lodging business, strong operational performance by the vacation ownership business, contributions from acquisitions in the exchange and rentals and lodging businesses and a lower effective tax rate. Adjusted net income for the full year 2010 excludes a $41 million after-tax net benefit principally related to the resolution of the IRS examination of taxable years 2003 through 2006, an $18 million after-tax charge for the early extinguishment of debt, a $6 million after-tax charge for acquisition costs and a $6 million after-tax restructuring charge.
Reported net income for full year 2010 was $379 million, or $2.05 per diluted share, compared with net income of $293 million, or $1.61 per diluted share, for the prior-year period. Free cash flow increased 11 percent to $603 million in the twelve-month period ended December 31, 2010 compared with $541 million in the same period in 2009. The growth of free cash flow reflects higher cash earnings and more efficient working capital utilization. For the twelve months ended Dec. 31, 2010, cash provided by operating activities was $635 million, or $780 million excluding the previously announced one-time payment of $145 million related to a contingent IRS tax liability. Cash provided by operating activities was $689 million for the prior-year period.
Revenues for Wyndham Hotel Group were $163 million in the fourth quarter of 2010, an increase of 9 percent, compared with the fourth quarter of 2009 reflecting revPAR improvement of 10 percent as well as incremental revenue from the recently acquired Tryp hotel brand and higher fees generated from ancillary services provided to franchisees. EBITDA was $40 million, an increase of 25 percent, compared with the fourth quarter of 2009 reflecting the revPAR improvement and the absence of a $6 million impairment charge recorded in 2009, partially offset by higher operating costs.
As of Dec. 31, 2010, Wyndham’s hotel system consisted of approximately 7,210 properties and 612,700 rooms. The development pipeline included more than 900 hotels and approximately 103,000 rooms, of which 55 percent were new construction and 51 percent were international. Revenue for Wyndham exchange and rentals was $282 million in the fourth quarter of 2010, an increase of 9 percent compared with the fourth quarter of 2009. In constant currency, revenues increased by 12 percent.
Excluding restructuring costs of $9 million and costs related to the acquisition of James Villa Holidays of $1 million, fourth quarter 2010 adjusted EBITDA decreased 13 percent compared with the prior-year period, reflecting the seasonality of the acquired rental businesses. Excluding the impact of acquisitions, adjusted EBITDA for the fourth quarter of 2010 was flat compared with the fourth quarter of 2009. For the full year 2011, the company expects revenues of approximately $4 billion to $4.2 billion and adjusted EBITDA off approximately $925 to $955 million.
