Wyndham Worldwide Reports Solid Second Quarter Results

Wyndham Worldwide Corporation announced revenues for the lodging group in the second quarter of 2008, compared to the second quarter of 2007. Net income for the same period was $98 million or $0.55 diluted earnings per share, up 3 percent from the second quarter of 2007.

The company also reported EBITDA growth in each of its three business units during 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 percent 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.

Revenues increased 8 percent 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 percent in the second quarter of 2008, reflecting strong international growth of 15.2 percent, or 8.4 percent in constant currency, and a decline in domestic RevPAR of 3.7 percent. Comparable RevPAR increased 0.6 percent 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 As of June 30, 2008, the company’s hotel system consisted of approximately 6,560 properties and 551,500 rooms, of which 20 percent were international, with a development pipeline of approximately 930 hotels and approximately 109,000 rooms, of which 50 percent were new construction and over 40 percent were international.

Vacation exchange and rentals revenues increased to $314 million in the second quarter of 2008, a 9 percent 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 percent compared to the second quarter of 2007. Vacation rentals revenues were $153 million, up 12 percent compared to the second quarter of 2007, or a 3 percent increase in constant currency.

These results reflect a 15 percent increase in the average net price per vacation rental. The gains in the average net price per vacation rental were partially offset by a 2 percent decline in rental transaction volume which the company said was due to customers booking their vacations closer to the actual travel dates.