Wyndham Worldwide's First Quarter Net Income Jumps 9% to $1 Billion

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Wyndham Worldwide, whose Wyndham Hotel Group is the world's largest hotel company with over 7,150 hotels and approximately 609,300 rooms in 65 countries, said momentum in its lodging and time-share segments helped its bottom line during the first quarter, according to the company's recently reported quarterly earnings.

First quarter revenues were $1.0 billion, an increase of 9 percent from the prior year period. The increase reflected growth in all of Wyndham's business units but the growth was led by the company's Lodging and Vacation Ownership businesses.

For the first quarter of 2012, adjusted net income was $90 million, or $0.60 per diluted share, compared with $79 million, or $0.44 per diluted share for the same period in 2011. The increase in adjusted net income primarily reflected stronger operating results inWyndham's Lodging and Vacation Ownership businesses, the company said. Adjusted net income for the first quarter of 2012 excludes a $62 million early extinguishment charge related to $650 million of debt tender offers and $4 million of benefits related to legacy and other adjustments.

Including the early extinguishment charge and legacy benefits, reported net income for the first quarter of 2012 was $32 million, or $0.21 per diluted share, compared with net income of $72 million, or $0.41 per diluted share, for the first quarter of 2011.

Free cash flow increased 4 percent to $193 million for the quarter ended March 31, 2012, compared with $185 million during the same period in 2011. The growth in free cash flow primarily reflects reduced capital expenditures. The company defines free cash flow as net cash provided by operating activities less capital expenditures, equity investments and development advances. For the quarter ended March 31, 2012, cash provided by operating activities was $228 million, compared with $229 million in the prior year period.

"First quarter results were strong, reflecting the power of our fee-for-service business model across economic cycles, continuing innovation throughout the company, robust free cash flow and disciplined capital allocation," said Wyndham CEO/Chairman Stephen P. Holmes. "Furthermore, consumers are traveling.  Our vacation ownership and hotel businesses are showing great momentum and our exchange and rentals business proved resilient despite the difficult economic climate in Europe.  As always, we will continue to focus on driving operational improvements in 2012 and beyond."

Wyndham Hotel Group, or the company's lodging division, showed a 24 percent increase in revenues to $185 million in the first quarter, compared with the first quarter of 2011. The increase reflects domestic RevPAR gains of 9 percent, as part of a total system RevPAR improvement of 7 percent, revenues associated with the recently opened Wyndham Grand hotel in Orlando, and higher inter-segment licensing fees for use of the Wyndham brand trade name.

Adjusted EBITDA was $49 million, an increase of 23 percent compared with the first quarter of 2011, largely reflecting the revenue increases discussed above, partially offset by the operating costs associated with the recently opened Wyndham Grand hotel and higher marketing costs.

In the company's Vacation Ownership division, known as Wyndham Vacation Ownership, revenues were $501 million in the first quarter of 2012, up 11 percent increase over the first quarter of 2011, primarily reflecting increased vacation ownership interest (VOI) sales.

Gross sales at Wyndham's Orlando-based time-share division rose 20.4 percent to $384 million in the first quarter of 2012, up 20 percent from the first quarter of 2011, primarily reflecting a 10 percent increase in volume per guest and an 8 percent increase in tour flow. It said tours of its time-share properties rose by 8 percent and those guests spent more on time-share products.

Adjusted EBITDA for the first quarter of 2012 was $103 million, a 7 percent increase compared with the first quarter of 2011. In the related Vacation Exchange and Rentals division (Wyndham Exchange & Rentals), overall revenues were $361 million in the first quarter of 2012, compared to $356 million in the first quarter of 2011.

Wyndham Hotel Group, part of the Wyndham Worldwide (NYSE:WYN) family of companies, is the world's largest hotel company with over 7,150 hotels and approximately 609,300 rooms in 65 countries.

As of March 31, 2012, the company's hotel system development pipeline included approximately 840 hotels and 108,200 rooms, of which 56 percent were new construction and 55 percent were international.

The company's brands are comprised of  Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wingate by Wyndham, Baymont Inn & Suites, Microtel Inn & Suites by Wyndham, Hawthorn Suites® by Wyndham, TRYP by Wyndham, Howard Johnson, Travelodge and Knights Inn.  In addition, the company has license agreements to franchise the Planet Hollywood Hotels, Dream and Night brands and provide management services globally.

All hotels are independently owned and operated excluding certain Wyndham and TRYP by Wyndham hotels as well as certain international Ramada, Days Inn and Super 8 hotels, which may be managed by one of the affiliates of Wyndham Hotel Group. Wyndham Hotel Group is based in Parsippany, N.J.