Wyndham Worldwide Reports Drop in Quarterly Revenue

Wyndham Worldwide Corporation announced results for the three months ended March 31, 2009. First quarter 2009 adjusted net income was $74 million, or $0.41 diluted earnings per share (EPS), compared with adjusted net income of $62 million, or $0.35 diluted EPS, for the first quarter of 2008.

First quarter 2009 net cash from operating activities was approximately $210 million, compared with $87 million in the first quarter of 2008. The remaining borrowing capacity on the company’s revolving credit facility increased to approximately $355 million compared with approximately $290 million as of Dec. 31, 2008.

First quarter revenues of $901 million declined by 11 percent from the prior-year period, due to adverse foreign currency effects resulting from the strengthening U.S. dollar in the vacation exchange and rental business, the previously announced initiative to reduce sales in the company’s vacation ownership business as well as an increased loan loss provision. These items were partially offset by the recognition of previously deferred vacation ownership revenue.

Revenues for Wyndham Hotel Group were $154 million in the first quarter of 2009, a decline of 9 percent compared with the first quarter of 2008, primarily reflecting a decline in worldwide revenue per available room (RevPAR) and lower property management reimbursable revenues.

In constant currency, the first quarter of 2009 system-wide RevPAR decreased 11.3 percent, reflecting declines of 13.4 percent and 5.5 percent in domestic and international RevPAR, respectively. Including the impact of foreign currency, system-wide RevPAR declined 14 percent in the first quarter of 2009.

First quarter 2009 EBITDA was $35 million, a 24 percent decline from the first quarter of 2008, primarily driven by the decline in worldwide RevPAR and $3 million of restructuring costs, partly offset by lower marketing expenses. Excluding restructuring costs, first quarter 2009 adjusted EBITDA would have been $38 million, a 17 percent decrease from the prior year.