Wyndham Worldwide (WYN)

Total liabilities decreased $166 million primarily due to (i) a $147 million decrease in net borrowings reflecting net changes of $76 million in our securitized vacation ownership debt and $71 million in our other long-term debt primarily related to our revolving credit facility, (ii) a $51 million decrease in deferred income primarily due to the recognition of previously deferred revenues due to higher sales generated from vacation resorts where construction was more complete, partially offset by cash received in advance on arrival-based bookings within our vacation exchange and rentals business and (iii) a $29 million decrease in deferred income taxes primarily attributable to lower gross VOI sales and additional restructuring accruals. Such increases were partially offset by a $68 million increase in accounts payable primarily due to seasonality at our European vacation rental and travel agency businesses, partially offset by the impact of the reduced sales pace at our vacation ownership business.

 

Total stockholders’ equity increased $37 million due to (i) $45 million of net income generated during the three months ended March 31, 2009, (ii) a change of $7 million in deferred equity compensation and (iii) $4 million of unrealized gains on cash flow hedges. Such increases were partially offset by (i) $9 million of currency translation adjustments, (ii) the payment of $7 million in dividends and (iii) a $3 million decrease to our pool of excess tax benefits available to absorb tax deficiencies due to the exercise and vesting of equity awards.

 

expense, (ii) $8 million of excess cash related to the Separation returned to us by our former Parent and (iii) $5 million as a result of the exercise of stock options during 2008.

 

Total stockholders’ equity decreased $151 million principally due to $480 million of treasury stock purchased through our stock repurchase program. Such decrease was partially offset by (i) $298 million of net income generated during the nine months ended September 30, 2007, (ii) a reduction in retained earnings of $20 million related to the establishment of a liability for unrecognized tax benefits in connection with our adoption of FIN 48 and (iii) the payment of $7 million in dividends.

 

within our lodging business to acquire a minority equity interest, (iv) a $69 million increase in other current assets primarily due to increased restricted cash resulting from increased VOI sales and contractual renovations at one of our managed Landal parks, increased assets held for sale due to the approved sale of certain vacation ownership assets and the timing of receivables that will reverse in the third and/or fourth quarters of 2007 and (v) a $31 million increase in property and equipment primarily due to building within our vacation ownership and vacation exchange and rentals businesses and additions related to back office expenditures at corporate resulting from our separation from Cendant. Such increases were partially offset by a $71 million decrease in due from former Parent and subsidiaries related to payments made from Cendant to reimburse us for monies they collected on our behalf and expenses we paid on their behalf relating to the separation and the reduction of our right to receive proceeds from the sale of Cendant’s preferred stock sale investment in and warrants of Affinion as a result of Affinion’s redemption of a portion of the preferred stock investment owned by Avis Budget Group.

 

Total liabilities increased $733 million primarily due to (i) $516 million of additional net borrowings reflecting an additional series of term notes payable, Sierra Timeshare 2007-1 Receivables Funding, LLC, secured by vacation ownership contract receivables in the initial principal amount of $600 million entered into in May 2007, $215 million of net proceeds from borrowings on our revolving credit facility and a $155 million securitization facility entered into in February 2007, partially offset by $271 million of payments made on our securitized vacation ownership term notes, $134 million of net payments made on our securitized vacation ownership bank conduit facility and $73 million to repay our vacation rental bank borrowings, (ii) a $91 million increase in deferred income primarily due to cash received in advance on arrival-based bookings and increased deferred revenue resulting from new enrollments and renewals within our vacation exchange and rentals business, (iii) a $79 million increase in accrued expenses and other current liabilities primarily due to increased accrued legal settlements at our vacation ownership and vacation exchange and rentals businesses, increased marketing expenses to promote growth in our businesses, increased accrued health and welfare benefits and increased local taxes payable to certain foreign jurisdictions within our vacation exchange and rentals business, (iv) a $77 million increase in deferred income taxes primarily attributable to higher VOI sales, (v) a $24 million increase in accounts payable primarily due to seasonality of bookings at our vacation exchange and rentals business, partially offset by timing differences of payments on accounts payable at the corporate level and (vi) a $14 million increase in other non-current liabilities primarily due to the establishment of a $20 million liability for unrecognized tax benefits in connection with our adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109”. Such increases were partially offset by a $68 million decrease in due to former Parent and subsidiaries primarily as a result of our payment of or other reductions in certain contingent and other corporate liabilities of our former Parent or its subsidiaries which were created upon our separation.

 

Total stockholders’ equity decreased $259 million principally due to $463 million of treasury stock purchased through our stock repurchase program. Such decrease was partially offset by (i) $182 million of net income generated during the six months ended June 30, 2007 and (ii) a reduction in retained earnings of $20 million related to the establishment of a liability for unrecognized tax benefits in connection with our adoption of FIN 48.

 

benefits in connection with our adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109.” Such increases were partially offset by a $52 million decrease in due to former Parent and subsidiaries primarily as a result of our payment of certain contingent and other corporate liabilities of our former Parent or its subsidiaries which were created upon our separation.

 

Total stockholders’ equity decreased $143 million principally due to $227 million of treasury stock purchased through our stock repurchase program. Such decrease was partially offset by $86 million of net income generated during the three months ended March 31, 2007.

 

Total assets increased $353 million from December 31, 2005 to December 31, 2006 primarily due to (i) a $318 million increase in inventory primarily related to vacation ownership inventories associated with increased property development activity, as well as an increase of $171 million associated with our adoption of SFAS No. 152, a new accounting pronouncement related to vacation ownership interest transactions, (ii) a $306 million increase in vacation ownership contract receivables, net due to increased VOI sales, partially offset by the reclassification in accordance with SFAS No. 152, as discussed above, (iii) a $198 million increase in property and equipment principally within our vacation ownership business associated with building and reclassifications as a result of our adoption of SFAS No. 152 and within our vacation exchange and rentals businesses increased development at Landal GreenParks, (iv) a $170 million increase in cash and cash equivalents which is discussed in further detail in “Liquidity and Capital Resources-Cash Flows,” (v) a $130 million increase in other current assets primarily due to the adoption of SFAS No. 152, which resulted in the deferral of direct selling costs at December 31, 2006 compared to December 31, 2005 and increased restricted cash within our vacation ownership business relating to proceeds held for a new VOI resort still in development, (vi) a $73 million increase in prepaid expenses at our vacation ownership business primarily related to increased revenue deferrals as a result of the adoption of SFAS No. 152 and increased prepaid marketing fees in our vacation exchange and rentals business primarily due to increased prepaid directory fees as a result of timing, (vii) a $65 million increase in due from former Parent and subsidiaries relating to a refund of excess funding paid to our former Parent resulting from the Separation and income tax refunds, (viii) increased trade receivables of $58 million at our vacation exchange and rentals and vacation ownership businesses primarily due to favorable performance in the fourth quarter of 2006, (ix) a $54 million increase in goodwill primarily related to the acquisition of a vacation ownership marketing and development business and foreign exchange translation adjustments within our vacation and exchange and rental business, partially offset by the settlement of the ultimate tax basis of acquired assets with the tax authority within our vacation ownership business, (x) a $41 million increase in trademarks primarily related to the acquisition of Baymont Inn & Suites in April 2006, partially offset by an $11 million non-cash impairment charge recorded within our vacation ownership business during the fourth quarter of 2006 relating to rebranding initiatives carried out as a result of our separation from Cendant and (xi) a $37 million receivable in non-current due from former Parent and subsidiaries, which represents our right to receive proceeds from the ultimate sale of Cendant’s preferred stock investment in and warrants of Affinion Group Holdings, Inc. Such increases were partially offset by a $1,125 million decrease in the net intercompany funding to former Parent, which reflects the elimination of amounts due from Cendant upon our separation from them.

 

Total liabilities increased $1,827 million primarily due to (i) $858 million of additional net borrowings primarily due to approximately $796 million of 6.00% senior unsecured notes issued in December 2006, $328 million of greater securitization of vacation ownership contract receivables and a $300 million term loan entered into in July 2006 as part of our overall debt structure, partially offset by the elimination by our former Parent of $600 million of borrowings outstanding under our former Parent’s asset-linked facility relating to certain of our assets (which balance was $550 million at December 31, 2005 and was previously reflected as long-term debt on our Consolidated and Combined Balance Sheet), (ii) a $421 million increase in due to former Parent and subsidiaries as a result of the assumption of certain contingent and other corporate liabilities of our former Parent or its subsidiaries upon our separation (see “Separation Adjustments and Transactions with Former Parent and Subsidiaries”), (iii) a $281 million increase in deferred income primarily due to increased activity within our vacation ownership business, the adoption of SFAS No. 152, as discussed above, and increased deferred revenue within our vacation exchange and rentals business and (iv) a $145 million increase in accrued expenses and other current liabilities primarily due to increased marketing expenses to promote growth in our businesses and local taxes payable to certain foreign jurisdictions and the related interest payable on such accrual within our vacation exchange and rentals business.

 

Total stockholders’ equity decreased $1,474 million principally due to (i) the elimination of net intercompany funding to former Parent of $1,125 million, (ii) the transfer of proceeds from our new borrowing arrangements to our former Parent of $1,360 million, (iii) the assumption of $434 million of contingent liabilities as a result of our separation and (iv) $349 million of treasury stock purchased through our stock repurchase program. Such decreases were partially offset by (i) $760 million of proceeds contributed to us by our former Parent upon the sale of Travelport, (ii) the elimination by our former Parent of $600 million of borrowings outstanding under our former Parent’s asset-linked facility relating to certain of our assets and (iii) $287 million of net income generated during the year ended December 31, 2006.