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Forward Looking Statements
Certain statements in this presentation constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. Such forward-looking statements include projections. Such projections were not prepared in accordance with public guidelines of the American Institute of Certified Public Accountants regarding projections and forecasts, nor have such projections been audited, examined or otherwise reviewed by independent auditors of Wyndham Worldwide Corporation (“WYN”).
Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Wyndham Worldwide to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
You are cautioned not to place undue reliance on these forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward looking statements are specified in Wyndham Worldwide’s most recent Form 10-K under “Risk Factors” filed with the Securities and Exchange Commission. Except for ongoing obligations of Wyndham Worldwide to disclose material information under the federal securities laws, Wyndham Worldwide does not undertake any obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
The information in this presentation should be read in conjunction with the consolidated financial statements and accompanying notes, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Wyndham Worldwide's 2012 Form 10-K and Form 10-Q for the quarterly period ending September 30, 2013 filed with the Securities and Exchange Commission on February 15, 2013 and October 23, 2013 respectively.
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T H E W Y N D H A M W O R L D W I D E S T O R Y
Powerful Cash Flow Drives Dependable Growth
Target$750MSuccessful! 17-21%
CAGR
3
Sustainableannual
free cash flow
BusinessExecution
EPS growth*
* 2011-2015
Agenda
Strong execution
Delivers dependable growth
Three solid platforms
4
W Y N D H A M W O R L D W I D E T O D AY
Leading Positions in Leisure Industry
5
MajorBrands Include
BusinessSegment
% of 2012 Adjusted EBITDA
Market PositionWorldwide
Hotel Group#1
Hotel franchisorby hotels
23%
Exchange & Rentals #1Timeshare
exchange and rentalcompany
29%
Vacation Ownership#1
Timesharedeveloper
48%
W Y N D H A M W O R L D W I D E T O D AY
Majority of Income from Fee-for-Service Businesses
6
• Hotel Franchising Fees• Vacation Exchange Fees• Vacation Rentals Fees• Property Management Fees• WAAM 1.0
Fee-for-ServiceBusinesses
~ 40% ~ 60%Other
Advantages:
Strong cash flow
Low capital intensity
Recurring revenues
ü
ü
ü
ü Stable earnings
Revenues
W Y N D H A M W O R L D W I D E T O D AY
Uniquely Positioned in the Industry
7
High(15%)
Low(0%)
Cash FlowYield
HighLow Diversified Revenuesproduct lines & demographics
Other lodging companies
• High free cash flow• Diversified revenue
streams
WYN
Three Strong Platforms for Growth
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Exchange & Rentals
Vacation Ownership
HotelGroup
2009 2010 2011 2012 2013E
$178M$190M
$265M$298M
H O T E L G R O U P
Building On Leading Global Position
Strengths• World’s largest hotel franchisor
– over 638,300 rooms and 7,440 hotels
• Leader of the economy & midscale segment
Strategic Priorities• Grow system size
– add new rooms – retain every desired property
• Strengthen value proposition– upgrade and improve technology– generate more bookings through our own channels
• Drive organizational excellence– consolidate central reservation systems– call center efficiency
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Adjusted EBITDA
$214M
$271M
$290M - $305M(1)
(1) Based on guidance as of July 24, 2013
• Expand into new geographic markets– grow organically and through targeted M&A
• Leverage web technology investments– enhance online experience & reduce costs
• Drive revenue and customer retention– develop compelling products and services
Strategic Priorities
E X C H A N G E A N D R E N TA L S
Extending the Lead
• Leading vacation rental facilitator
• Access to approx.106,000 rental properties
• Approx.1.4 million transactions completed during 2012
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• Leading timeshare exchange network
• Approximately 3.7 million members
• Over 4,000 vacation ownership resorts in approximately 100 countries
Rentals Strengths Exchange Strengths
2009 2010 2011 2012 2013E
$293M$308M
$348M
Adjusted EBITDA
$340M(1)
(1) Adjusted EBITDA decrease primarily due to currency ($17M)
$355M - $370M(2)
(2) Based on guidance as of July 24, 2013
VA C AT I O N O W N E R S H I P
A Transformed Business
Strengths• World’s largest vacation ownership business
– 190 resorts and approx. 915,000 owners
• Leading innovator
• Property management and consumer finance have fee-for-service components
Strategic Priorities• Drive further cash flow improvements
– develop “Just-in-Time” and asset-lite inventory models (WAAM)
• Drive greater sales and marketing efficiencies
• Deliver better service to owners to enable greater owner satisfaction
2009 2010 2011 2012 2013E
$423M$440M
$608M$514M
Adjusted EBITDA
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$552M
$595M - $620M(1)
(1) Based on guidance as of July 24, 2013
VA C AT I O N O W N E R S H I P
A Closer Look
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• 50% of existing owners Recurring upgrade sales
• Property management fees = $63M EBITDA(1)Recurring income
• Financing receivablesRecurring interest income
• Clean business modelAccounting transparency
(1) For full year 2012
• Allows remote market salesFlexible points based product
Agenda
Strong execution
Delivers dependable growth
Three solid platforms
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Strong Record of Execution – Key Initiatives
14
Deliveredstrong cash flow
and2012 EPS growth
of 34%
Vacation Ownership transformed
Leverage web to improve margins of Vacation Exchange
Strengthen Hotel Group value proposition
1
2
4
Grow Vacation Rentals business3
Strong balance sheet and financial position5
Vacation Ownership Transformed
15(1) Weighted Average FICO of Portfolio (at origination)
Major Benefits
Margin increased from16% to 24%
Average FICO scores(1) increased to 725
Inventory spend reduced from nearly $700M to approx. $125M
Major Actions
Right-sized the business
Tightened consumer lending practices
Developed WAAM concept
VA C AT I O N O W N E R S H I P – A C L O S E R L O O K
Fee-for-Service Vacation Ownership Model Gaining Traction
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Affiliate with developers of unsold properties
Wyndham Asset Affiliation Model (WAAM)
Traditional VacationOwnership Model
Invest in development of resort properties
Reduces capital intensity
Increases recurring management fees
Improves returns
Advantages
üü
ü
Leverage Web to Improve Margins of Vacation Exchange
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~250 bps of segment margin improvement
• Enhanced search
• Improved Exchange value transparency
• Improved resortphotography and videos
• Better websites for club affiliates
Key Actions Web Penetration(1)
(1) As of December 31, 2012
2008 2012
13%
46%
Grow Vacation Rentals Business
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• 5,000 professional managers have an average of ~110 units in the U.S.
highly fragmented
Market is under-penetrated
• $24B of annual revenue in the U.S.– $14B rent-by-owner market – $10B professionally managed market
large
• Just 10% of US adults have stayed in a rental over the past 10 years under-penetrated
U.S. Market
Enhance Content • Overhaul information and
images of 7,000 properties
• Improve search engine results
Revamp Websites• Drive direct channel
bookings
• Improve conversion - increases of 10% to 60%
Strengthen Hotel Group Value Proposition
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Build value proposition through Apollo
Improve Rate Integrity• Better manage rates and
inventory
• Enhance property management system synergies
Strong Balance Sheet and Financial Position
20
Annual sustainable free cash flow target $750 million
Well stacked capital deck – no near-term maturities
Investment grade ratings from three major rating agencies
Cost-efficient commercial paper program
Agenda
Strong execution
Delivers dependable growth
Three solid platforms
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Segment Long-term Growth Dynamics
22
Hotel Group
• Continued RevPAR recovery
• Apollo
• International expansion
Exchange & Rentals
• Migration to web for Exchange business
• U.S. penetration in rentals
Vacation Ownership
• WAAM / Just in Time
• Voyager benefits
• Credit Pre-screening Program
High-single digit growth
Mid-single digitgrowth
Mid-single digitgrowth
Organic EBITDA growth of 6-8%
Our Cash Flow will Enhance Strong, Sustainable Growth
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6-8%
17-21%*
EBITDA ofBase Business
Company EPSGrowth
Share Repurchaseand M&A
* 2010-2015
Disciplined Capital Deployment Drive Shareholder Value
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Dividends Share Repurchase Targeted M&A Investment
Disciplined CapitalDeployment of ~$1B Annually
Free Cash Flow: $750M targetMaintain existing leverage: $100M EBITDA = $300M of debt
Currently ~$162M annually~32% of adj. net income(1)
$623M in 2012Focus on fee-for-service businesses and tuck-in
acquisitions
(1) Based on guidance as February 6, 2013
Clear Evidence Our Business Model is Working
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2010 2011 2012 2013E
$2.49
$2.00
2010 2011 2012 2013E
$860M
$976M
Adjusted EBITDA Adjusted EPS
+25%
+13%
$1,054M
+10%
$3.23
+30%
(1) Based on guidance as of October 23, 2013 (2) Includes share repurchases through September 30, 2013
(1)
$1,140M - $1,165M$3.78 - $3.80(2)
+12%
+8%
(1)
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Free Cash Flow Yield
WYN Valuation Framework
WYN
Peer Average
8.7%
5.2%
WYN
Peer Average
9.8x
12.4x
2013 Enterprise Value / EBITDA
WYN
Peer Average
17.4
22.3
Price/Earnings
I N S U M M A R Y
Powerful Cash Flow Drives Dependable Growth
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Strong record of execution
• Transformed Vacation Ownership business model
• ~$750M annual sustainable free cash flow target
Execution
Building on three solid platforms
• Extending lead of all platforms
• Continuing to optimize operations
Solid Platforms
Delivering dependable growth
• Using free cash flow for targeted growth
• Targeting 17-21% EPS growth
Growth
Investor contact: Margo C. Happer Senior Vice President, Investor RelationsWyndham Worldwide Corporation(973) [email protected]
