Wyndham Worldwide Corp. (WYN) said Wednesday it and its former parent have reached a settlement with the Internal Revenue Service about a long-running dispute involving a deferred tax liability.
The move will result in a roughly $40 million gain for the lodging company in the third quarter.
Wyndham expects to pay about $145 million in the period to resolve issues involving former parent Cendant's 2003 through 2006 federal tax returns. Cendant broke up four years ago, with Wyndham being one of the offshoots. Wyndham had set aside $185 million for the IRS matter.
The company--which operates the Ramada, Howard Johnson and Days Inn hotel chains--said in April its first-quarter earnings rose 11% on fewer charges as it reported stronger timeshare revenue and got a boost from favorable exchange rates. Second-quarter results are due on July 28.
Shares closed at $21.29 Tuesday and weren't active premarket. The stock has risen 5.6% this year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037; firstname.lastname@example.org;