July 24, 2014 - EARNINGS RELEASE - 8-K: Current report filing

EXHIBIT 99.1

Wyndham Worldwide Reports Second Quarter 2014 Earnings

Adjusted Diluted EPS Growth of 19%

Raises Full Year EBITDA and EPS Guidance

PARSIPPANY, N.J. (July 24, 2014) – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended June 30, 2014.

SECOND QUARTER HIGHLIGHTS:

Adjusted diluted earnings per share (EPS) was $1.17, an increase of 19% from adjusted diluted EPS of $0.98 in the second quarter of 2013. Reported diluted EPS was $1.20, compared with $0.98 in the second quarter of 2013.

Revenues increased 7% compared with the second quarter of 2013.

Adjusted EBITDA increased 9% compared with the second quarter of 2013.

The Company repurchased 2.3 million shares of its common stock for $170 million.

“We delivered strong results in the second quarter, improving upon the positive trends from the first quarter,” said Stephen P. Holmes, chairman and CEO. “Domestic RevPAR growth continued to accelerate, net Vacation Ownership Interest sales increased ten percent and we are seeing continued strong growth in rental transaction volume.”

SECOND QUARTER 2014 OPERATING RESULTS

Second quarter revenues were $1.3 billion, an increase of 7% from the prior year period. The increase reflects growth in all of the Company’s business segments.

Adjusted net income was $150 million, or $1.17 per diluted share, compared with $133 million, or $0.98 per diluted share for the same period in 2013. The performance reflects solid operating results across all of the Company’s businesses and lower interest expense. EPS growth also benefited from the Company’s share repurchase program.

Reported net income for the second quarter of 2014 was $153 million, or $1.20 per diluted share, compared with $133 million, or $0.98 per diluted share, for the second quarter of 2013. Reported net income included items excluded from adjusted net income. The net result of these items favorably impacted second quarter 2014 net income by $3 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.

Free cash flow was $695 million for the six months ended June 30, 2014, compared with $654 million for the same period in 2013. The growth of free cash flow largely reflects favorable timing of working capital. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the six months ended June 30, 2014, net cash provided by operating activities was $793 million, compared with $758 million in the prior year period.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $283 million in the second quarter of 2014, an 8% increase over the second quarter of 2013. The increase predominantly reflects higher RevPAR.

Domestic RevPAR increased 8.8%, partially offset by a 1.8% decline in international RevPAR, resulting in a 5.6% increase in total system-wide RevPAR compared with the second quarter of 2013. International RevPAR declined due to unfavorable currency movements and growth in lower-RevPAR countries such as China.

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 12% increase compared with the second quarter of 2013. The increase was primarily due to higher RevPAR.

As of June 30, 2014, the Company’s hotel system consisted of approximately 7,540 properties and 650,200 rooms, a 2.4% room increase compared with the second quarter of 2013. The development pipeline included over 970 hotels and approximately 117,000 rooms, of which 57% were international and 67% were new construction.

Vacation Exchange and Rentals (Wyndham Exchange & Rentals)

Revenues were $402 million in the second quarter of 2014, a 7% increase over the second quarter of 2013. In constant currency and excluding the impact of acquisitions, revenues were up 3%.

Exchange revenues were $168 million, flat compared with the second quarter of 2013, as a 1.7% increase in average number of members was offset by a 1.8% decline in exchange revenue per member.

Vacation rental revenues were $217 million, a 13% increase over the second quarter of 2013. Excluding the impact of foreign currency and acquisitions, vacation rental revenues were up 6%, reflecting a 4.9% increase in transaction volume and a 1.2% increase in the average net price per vacation rental.

Adjusted EBITDA for the second quarter of 2014 was $87 million, a 2% increase compared with the second quarter of 2013.

Vacation Ownership (Wyndham Vacation Ownership)

Revenues were $673 million in the second quarter of 2014, a 7% increase over the second quarter of 2013, primarily reflecting higher gross VOI sales and a lower loan loss provision.

Gross VOI sales were $496 million in the second quarter of 2014, an increase of 3% over the second quarter of 2013, reflecting a 1.1% increase in volume per guest, a 1.0% increase in tour flow and increased tele-sales upgrades.

Adjusted EBITDA for the second quarter of 2014 was $185 million, a 15% increase compared with the second quarter of 2013, primarily reflecting the revenue increases.

OTHER ITEMS

The Company repurchased 2.3 million shares of common stock for $170 million during the second quarter of 2014. From July 1 through July 23, 2014, the Company repurchased an additional 0.5 million shares for $37 million. The Company’s remaining share repurchase authorization totals $311 million as of July 23, 2014.

Reported net interest expense in the second quarter of 2014 was $26 million, compared with $32 million in the second quarter of 2013, reflecting lower rates associated with a fixed-for-floating rate swap and a $2 million benefit from a value added tax adjustment.

BALANCE SHEET INFORMATION AS OF JUNE 30, 2014:

Cash and cash equivalents of $247 million, compared with $194 million at December 31, 2013

Vacation ownership contract receivables, net, of $2.7 billion, compared with $2.8 billion at December 31, 2013

Vacation ownership and other inventory of $1.0 billion, unchanged from December 31, 2013

Securitized vacation ownership debt of $1.9 billion, unchanged from December 31, 2013

Long-term debt of $2.8 billion, compared with $2.9 billion at December 31, 2013. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.4 billion as of June 30, 2014, compared with $1.3 billion as of December 31, 2013

A schedule of debt is included in Table 5 of this press release.

OUTLOOK

Note to Editors: The guidance excludes possible future share repurchases, while analysts’ estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.

For the full year 2014, the Company provides the following guidance:

Revenues of approximately $5.250 - $5.350 billion (unchanged)

Adjusted EBITDA of approximately $1.230 - $1.245 billion up from $1.215 - $1.240 billion

Adjusted EPS of approximately $4.34 - $4.44 based on a diluted share count of 128 million up from $4.23 - $4.33 based on a diluted share count of 130 million

CONFERENCE CALL INFORMATION

Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company’s results, outlook and guidance on Thursday, July 24, 2014 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company’s website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available on the website for approximately 90 days beginning at noon EDT on July 24, 2014. The conference call may also be accessed by dialing 800-369-2125 and providing the passcode "WYNDHAM." Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on July 24, 2014, at 888-296-6944.

The Company will post guidance information on its website following the conference call.

PRESENTATION OF FINANCIAL INFORMATION

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company’s reported results.

ABOUT WYNDHAM WORLDWIDE CORPORATION

One of the world’s largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands. The world’s largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world’s best-known hotel brands, with approximately 7,500 franchised hotels and 650,200 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world’s largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 107,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of over 200 vacation ownership resorts serving approximately 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 associates globally. For more information, please visit www.wyndhamworldwide.com.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company’s revenues, earnings and related financial and operating measures.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s Annual Report on Form 10-K, filed with the SEC on February 14, 2014. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

# # #

Investor and Media contact:

Margo C. Happer

Senior Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-6472

margo.happer@wyn.com

Barry Goldschmidt

Vice President, Investor Relations

Wyndham Worldwide Corporation

(973) 753-7703

barry.goldschmidt@wyn.com

Table 1

(1 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

In addition to other measures, management evaluates the operating results of each of its reportable segments based upon net revenues and “EBITDA”, which is defined as net income before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing interest) and income taxes, each of which is presented on the Company’s Consolidated Statements of Income. The Company believes that EBITDA is a useful measure of performance for the Company's industry segments which when considered with GAAP measures, gives a more complete understanding of its operating performance. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the three months ended June 30, 2014 and 2013:

	Three Months Ended June 30,
	2014						2013
	Net Revenues			EBITDA			Net Revenues			EBITDA
Lodging	$	283		$	87		$	262		$	78
Vacation Exchange and Rentals		402			89			376			85
Vacation Ownership		673			185			630			161
Total Reportable Segments		1,358			361			1,268			324
Corporate and Other ^(a)		(15	)		(35	)		(15	)		(27	)
Total Company	$	1,343		$	326		$	1,253		$	297

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

	Three Months Ended June 30,
	2014			2013
EBITDA	$	326		$	297
Depreciation and amortization		59			54
Interest expense		29			34
Interest income		(3	)		(2	)
Income before income taxes		241			211
Provision for income taxes		88			78
Net income attributable to Wyndham shareholders	$	153		$	133

^(a) Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the three months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):

	Three Months Ended June 30,
	2014						2013
	Net Revenues			Adjusted EBITDA			Net Revenues			Adjusted EBITDA
Lodging	$	283		$	87		$	262		$	78
Vacation Exchange and Rentals		402			87			376			85
Vacation Ownership		673			185			630			161
Total Reportable Segments		1,358			359			1,268			324
Corporate and Other		(15	)		(35	)		(15	)		(27	)
Total Company	$	1,343		$	324		$	1,253		$	297

Table 1

(2 of 2)

Wyndham Worldwide Corporation

OPERATING RESULTS OF REPORTABLE SEGMENTS

(In millions)

The following tables summarize net revenues and EBITDA for reportable segments, as well as reconcile EBITDA to Net income attributable to Wyndham shareholders for the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014						2013
	Net Revenues			EBITDA			Net Revenues			EBITDA
Lodging	$	520		$	151		$	485		$	137
Vacation Exchange and Rentals		781			174			750			179
Vacation Ownership		1,266			300			1,179			272
Total Reportable Segments		2,567			625			2,414			588
Corporate and Other ^(a)		(31	)		(69	)		(27	)		(57	)
Total Company	$	2,536		$	556		$	2,387		$	531

Reconciliation of EBITDA to Net income attributable to Wyndham shareholders

	Six Months Ended June 30,
	2014			2013
EBITDA	$	556		$	531
Depreciation and amortization		115			106
Interest expense		56			66
Early extinguishment of debt		-			111
Interest income		(5	)		(4	)
Income before income taxes		390			252
Provision for income taxes		146			92
Net income		244			160
Net income attributable to noncontrolling interest		(1	)		-
Net income attributable to Wyndham shareholders	$	243		$	160

^(a) Includes the elimination of transactions between segments.

The following tables summarize net revenues and Adjusted EBITDA for reportable segments for the six months ended June 30, 2014 and 2013 (for a description of adjustments by segment, see Table 7):

	Six Months Ended June 30,
	2014						2013
	Net Revenues			Adjusted EBITDA			Net Revenues			Adjusted EBITDA
Lodging	$	520		$	155		$	485		$	137
Vacation Exchange and Rentals		781			182			750			179
Vacation Ownership		1,266			300			1,179			274
Total Reportable Segments		2,567			637			2,414			590
Corporate and Other		(31	)		(69	)		(27	)		(57	)
Total Company	$	2,536		$	568		$	2,387		$	533

Table 2

Wyndham Worldwide Corporation

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Net revenues
Service and membership fees	$	616		$	583		$	1,205		$	1,152
Vacation ownership interest sales		382			347			685			611
Franchise fees		166			152			293			274
Consumer financing		106			106			211			211
Other		73			65			142			139
Net revenues		1,343			1,253			2,536			2,387

Expenses
Operating		572			548			1,106			1,056
Cost of vacation ownership interests		42			32			81			64
Consumer financing interest		17			20			35			40
Marketing and reservation		206			181			387			357
General and administrative		181			177			376			342
Depreciation and amortization		59			54			115			106
Total expenses		1,077			1,012			2,100			1,965

Operating income		266			241			436			422
Other income, net		(1	)		(2	)		(5	)		(3	)
Interest expense		29			34			56			66
Early extinguishment of debt		-			-			-			111
Interest income		(3	)		(2	)		(5	)		(4	)

Income before income taxes		241			211			390			252
Provision for income taxes		88			78			146			92
Net income		153			133			244			160
Net income attributable to noncontrolling interest		-			-			(1	)		-
Net income attributable to Wyndham shareholders	$	153		$	133		$	243		$	160

Earnings per share
Basic	$	1.21		$	0.99		$	1.91		$	1.18
Diluted		1.20			0.98			1.89			1.17

Weighted average shares outstanding
Basic		127			135			127			136
Diluted		128			136			129			137

Note: For a description of adjustments to Net Income, see Table 8.

Table 3

(1 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS

The following operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses:

	Year		Q1		Q2		Q3		Q4		Full Year
Lodging
Number of Rooms		2014		646,900		650,200		N/A		N/A		N/A
		2013		631,800		635,100		638,300		645,400		N/A
		2012		609,300		608,300		618,100		627,400		N/A
		2011		609,600		612,900		611,200		613,100		N/A

RevPAR		2014	$	32.30	$	40.11		N/A		N/A		N/A
		2013	$	31.05	$	38.00	$	41.78	$	33.07	$	36.00
		2012	$	29.73	$	37.23	$	40.39	$	31.86	$	34.80
		2011	$	27.71	$	35.38	$	39.49	$	30.65	$	33.34

Vacation Exchange and Rentals
Average Number of Members (in 000s)		2014		3,727		3,748		N/A		N/A		N/A
		2013		3,668		3,686		3,711		3,728		3,698
		2012		3,684		3,670		3,672		3,670		3,674
		2011		3,766		3,755		3,744		3,734		3,750

Exchange Revenue Per Member		2014	$	200.78	$	179.17		N/A		N/A		N/A
		2013	$	210.96	$	182.42	$	169.95	$	161.21	$	181.02
		2012	$	204.56	$	177.07	$	171.14	$	165.86	$	179.68
		2011	$	205.64	$	178.46	$	172.38	$	161.68	$	179.59

Vacation Rental Transactions (in 000s) ^(a)		2014		429		376		N/A		N/A		N/A
		2013		423		355		433		273		1,483
		2012		418		325		390		259		1,392
		2011		398		328		370		250		1,347

Average Net Price Per Vacation Rental^(a)		2014	$	410.04	$	577.13		N/A		N/A		N/A
		2013	$	392.64	$	540.38	$	677.81	$	506.62	$	532.11
		2012	$	379.40	$	524.40	$	635.44	$	484.69	$	504.55
		2011	$	377.71	$	549.09	$	701.81	$	497.04	$	530.78

Vacation Ownership ^(a)
Gross Vacation Ownership Interest (VOI) Sales (in 000s) ^(b)		2014	$	410,000	$	496,000		N/A		N/A		N/A
		2013	$	384,000	$	481,000	$	536,000	$	488,000	$	1,889,000
		2012	$	384,000	$	460,000	$	502,000	$	435,000	$	1,781,000
		2011	$	319,000	$	412,000	$	455,000	$	409,000	$	1,595,000

Tours (in 000s) ^(c)		2014		170		208		N/A		N/A		N/A
		2013		163		206		225		195		789
		2012		148		186		207		183		724
		2011		137		177		197		173		685

Volume Per Guest (VPG) ^(c)		2014	$	2,272	$	2,280		N/A		N/A		N/A
		2013	$	2,211	$	2,256	$	2,278	$	2,370	$	2,281
		2012	$	2,414	$	2,361	$	2,315	$	2,225	$	2,324
		2011	$	2,192	$	2,227	$	2,197	$	2,296	$	2,229

Note: Full year amounts may not add across due to rounding.

^(a)

Includes the impact of acquisitions from the acquisition dates forward. Therefore, the operating statistics are not presented on a comparable basis.

^(b)

Includes Gross VOI sales under the Company's Wyndham Asset Affiliate Model (WAAM) Just-in-Time beginning in the second quarter of 2012 (see Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales).

^(c)

Includes the impact of WAAM Just-in-Time related tours beginning in the second quarter of 2012.

ADDITIONAL DATA

	Year		Q1		Q2		Q3		Q4		Full Year
Lodging
Number of Properties		2014		7,500		7,540		N/A		N/A		N/A
		2013		7,380		7,410		7,440		7,490		N/A
		2012		7,150		7,170		7,260		7,340		N/A
		2011		7,190		7,220		7,190		7,210		N/A

Vacation Ownership
Provision for Loan Losses (in 000s) ^(*)		2014	$	60,000	$	70,000		N/A		N/A		N/A
		2013	$	84,000	$	90,000	$	102,000	$	73,000	$	349,000
		2012	$	96,000	$	100,000	$	124,000	$	89,000	$	409,000
		2011	$	79,000	$	80,000	$	96,000	$	83,000	$	339,000

Note: Full year amounts may not add across due to rounding.

^(*)

Represents provision for estimated losses on vacation ownership contract receivables originated during the period, which is recorded as a contra revenue to vacation ownership interest sales on the Consolidated Statements of Income.

Table 3

(2 of 2)

Wyndham Worldwide Corporation

OPERATING STATISTICS

GLOSSARY OF TERMS

Lodging

Number of Rooms: Represents the number of rooms at lodging properties at the end of the period which are either (i) under franchise and/or management agreements, or company owned, (ii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided and (iii) properties managed under a joint venture.

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR. Comparable RevPAR represents RevPAR of hotels which are included in both periods.

Vacation Exchange and Rentals

Average Number of Members: Represents members in our vacation exchange programs who paid annual membership dues as of the end of the period or who are within the allowed grace period. For additional fees, such participants are entitled to exchange intervals for intervals at other properties affiliated with the Company's vacation exchange business. In addition, certain participants may exchange intervals for other leisure-related services and products.

Exchange Revenue Per Member: Represents total annualized revenues generated from fees associated with memberships, exchange transactions, member-related rentals and other servicing for the period divided by the average number of vacation exchange members during the period.

Vacation Rental Transactions: Represents the number of transactions that are generated during the period in connection with customers booking their vacation rental stays through the Company. One rental transaction is recorded for each standard one-week rental.

Average Net Price Per Vacation Rental: Represents the net rental price generated from renting vacation properties to customers and other related rental servicing fees during the period divided by the number of vacation rental transactions during the period.

Vacation Ownership

Gross Vacation Ownership Interest Sales: Represents sales of vacation ownership interest (VOIs), including WAAM sales, before the net effect of percentage-of-completion accounting and loan loss provisions. See Table 9 for a reconciliation of Gross VOI sales to vacation ownership interest sales.

Tours: Represents the number of tours taken by guests in our efforts to sell VOIs.

Volume per Guest (VPG): Represents Gross VOI sales (excluding tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours. The Company has excluded non-tour upgrade sales in the calculation of VPG because non-tour upgrade sales are generated by a different marketing channel. See Table 9 for a detail of tele-sales upgrades for 2011-2014.

General

Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods.

Table 4

Wyndham Worldwide Corporation

REVENUE DETAIL BY REPORTABLE SEGMENT

(In millions)

	2014										2013
	Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Lodging
Royalties and Franchise Fees	$	68	$	88		N/A		N/A		N/A	$	64	$	79	$	91	$	75	$	309
Marketing, Reservation and Wyndham Rewards Revenues ^(a)		76		101		N/A		N/A		N/A		73		92		118		83		365
Hotel Management Reimbursable Revenues ^(b)		37		39		N/A		N/A		N/A		25		38		37		35		135
Intersegment Trademark Fees		9		11		N/A		N/A		N/A		8		10		11		10		39
Owned Hotel Revenues		24		20		N/A		N/A		N/A		26		20		18		19		84
Ancillary Revenues ^(c)		23		24		N/A		N/A		N/A		26		23		22		23		95
Total Lodging		237		283		N/A		N/A		N/A		222		262		297		245		1,027

Vacation Exchange and Rentals
Exchange Revenues		187		168		N/A		N/A		N/A		193		168		158		150		669
Rental Revenues		176		217		N/A		N/A		N/A		166		192		293		138		789
Ancillary Revenues ^(d)		16		17		N/A		N/A		N/A		15		16		19		17		68
Total Vacation Exchange and Rentals		379		402		N/A		N/A		N/A		374		376		470		305		1,526

Vacation Ownership
Vacation Ownership Interest Sales		303		382		N/A		N/A		N/A		263		347		384		384		1,379
Consumer Financing		105		106		N/A		N/A		N/A		105		106		107		108		426
Property Management Fees		143		145		N/A		N/A		N/A		146		141		143		137		567
WAAM Fee-for-Service Commissions		33		30		N/A		N/A		N/A		24		30		33		20		107
Ancillary Revenues ^(e)		9		10		N/A		N/A		N/A		11		6		10		9		36
Total Vacation Ownership		593		673		N/A		N/A		N/A		549		630		677		658		2,515
Total Reportable Segments	$	1,209	$	1,358		N/A		N/A		N/A	$	1,145	$	1,268	$	1,444	$	1,208	$	5,068

	2012										2011
	Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Lodging
Royalties and Franchise Fees	$	62	$	80	$	88	$	71	$	301	$	58	$	75	$	85	$	66	$	284
Marketing, Reservation and Wyndham Rewards Revenues ^(a)		68		99		98		80		345		54		75		94		76		299
Hotel Management Reimbursable Revenues ^(b)		21		22		25		23		91		19		19		21		20		79
Intersegment Trademark Fees ^(f)		8		9		9		8		34		1		2		3		4		10
Owned Hotel Revenues		8		8		7		18		41		-		-		-		5		5
Ancillary Revenues ^(c)		18		15		22		23		78		17		19		19		17		72
Total Lodging		185		233		249		223		890		149		190		222		188		749

Vacation Exchange and Rentals
Exchange Revenues		188		162		157		153		660		194		168		161		150		673
Rental Revenues		159		170		248		125		702		150		180		260		125		715
Ancillary Revenues ^(d)		14		16		15		15		60		12		13		15		16		56
Total Vacation Exchange and Rentals		361		348		420		293		1,422		356		361		436		291		1,444

Vacation Ownership
Vacation Ownership Interest Sales		271		342		373		337		1,323		222		313		320		295		1,150
Consumer Financing		103		102		106		110		421		102		103		105		105		415
Property Management Fees		110		108		117		125		460		110		108		105		101		424
WAAM Fee-for-Service Commissions		12		11		4		6		33		10		11		23		21		65
Ancillary Revenues ^(e)		5		7		8		12		32		6		6		6		5		23
Total Vacation Ownership		501		570		608		590		2,269		450		541		559		527		2,077
Total Reportable Segments	$	1,047	$	1,151	$	1,277	$	1,106	$	4,581	$	955	$	1,092	$	1,217	$	1,006	$	4,270

Note: Full year amounts may not add across due to rounding.

^(a)

Marketing and reservation revenues represent fees the Company receives from franchised and managed hotels that are to be expended for marketing purposes or the operation of a centralized, brand-specific reservation system. These fees are typically based on a percentage of the gross room revenues of each hotel. Wyndham Rewards revenues represent fees the Company receives relating to its loyalty program.

^(b)

Primarily represents payroll costs in the hotel management business that the Company pays on behalf of property owners and for which it is reimbursed by the property owners. During both Q1 and Q2 2014, reimbursable revenues of $2 million, which eliminate in consolidation, were charged to the Company's vacation ownership business. During Q2, Q3 and Q4 2013, such amounts were $1 million, $3 million and $2 million, respectively.

^(c)

Primarily includes additional services provided to franchisees.

^(d)

Primarily includes fees generated from programs with affiliated resorts and homeowners.

^(e)

Primarily includes revenues associated with bonus points/credits that are provided as purchase incentives on VOI sales and fees generated from other non-core operations.

^(f)

During 2011, $3 million, $1 million and $2 million of intersegment trademark fees were recorded as a reduction of expenses in Q1, Q2 and Q3, respectively. As such, total inter-segment trademark fees for 2011 were $16 million.

Table 5

Wyndham Worldwide Corporation

SCHEDULE OF DEBT

(In millions)

	June 30, 2014		March 31, 2014		December 31, 2013		September 30, 2013		June 30, 2013

Securitized vacation ownership debt ^(a)
Term notes	$	1,600	$	1,823	$	1,648	$	1,615	$	1,569
Bank conduit facility ^(b)		291		156		262		273		289
Total securitized vacation ownership debt ^(c)		1,891		1,979		1,910		1,888		1,858
Less: Current portion of securitized vacation ownership debt		187		192		184		186		217
Long-term securitized vacation ownership debt	$	1,704	$	1,787	$	1,726	$	1,702	$	1,641

Debt:
Revolving credit facility (due July 2018) ^(d)	$	16	$	10	$	23	$	74	$	41
Commercial paper ^(e)		107		184		210		164		168
$315 million 6.00% senior unsecured notes (due December 2016) ^(f)		318		318		318		318		319
$300 million 2.95% senior unsecured notes (due March 2017)		299		299		298		298		298
$14 million 5.75% senior unsecured notes (due February 2018)		14		14		14		14		14
$450 million 2.50% senior unsecured notes (due March 2018)		448		447		447		447		447
$40 million 7.375% senior unsecured notes (due March 2020)		40		40		40		40		40
$250 million 5.625% senior unsecured notes (due March 2021)		246		246		246		246		246
$650 million 4.25% senior unsecured notes (due March 2022)^(g)		646		645		643		644		644
$400 million 3.90% senior unsecured notes (due March 2023)^(h)		403		395		387		396		397
Capital leases		186		188		191		185		184
Other		99		100		114		117		133
Total long-term debt		2,822		2,886		2,931		2,943		2,931
Less: Current portion of long-term debt		50		52		49		55		52
Long-term debt	$	2,772	$	2,834	$	2,882	$	2,888	$	2,879

^(a)

The Company's vacation ownership contract receivables are securitized through bankruptcy-remote special purpose entities ("SPEs") that are consolidated within our financial statements. These bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to the Company's creditors and legally are not the Company's assets. Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.

^(b)

Represents a non-recourse vacation ownership bank conduit facility with a term through August 2015 and borrowing capacity of $650 million. As of June 30, 2014, this facility had a remaining borrowing capacity of $359 million.

^(c)

This debt is collateralized by $2,287 million, $2,328 million, $2,314 million, $2,306 million and $2,414 million of underlying vacation ownership contract receivables and related assets as of June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013, respectively.

^(d)

Represents a $1.5 billion revolving credit facility that expires in July 2018. As of June 30, 2014, the Company had $9 million of outstanding letters of credit. After considering outstanding commercial paper borrowings of $107 million, the remaining borrowing capacity was $1.4 billion as of June 30, 2014.

^(e)

Represents commercial paper programs of $1.25 billion with a remaining borrowing capacity of $1.1 billion, as of June 30, 2014.

^(f)

Includes unamortized gains from the settlement of a derivative in the amount of $3 million as of June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013 and $4 million as of June 30, 2013.

^(g)

Includes a $2 million increase and $2 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

^(h)

Includes a $5 million increase and $10 million decrease in the carrying value resulting from a fair value hedge derivative as of June 30, 2014 and December 31, 2013, respectively.

Table 6

(1 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

	As of and For the Three Months Ended June 30, 2014
Brand	Number of Properties		Number of Rooms		Average Occupancy Rate			Average Daily Rate (ADR)		Average Revenue Per Available Room (RevPAR)

Lodging
Wyndham Hotels and Resorts		178		39,816		66.7	%	$	117.57	$	78.43

TRYP by Wyndham		117		16,740		66.9	%	$	96.01	$	64.19

Wingate by Wyndham		158		14,436		68.7	%	$	88.24	$	60.65

Hawthorn Suites by Wyndham		98		9,737		68.1	%	$	77.37	$	52.72

Ramada		829		114,195		57.2	%	$	79.00	$	45.15

Baymont		346		28,325		56.9	%	$	66.36	$	37.78

Days Inn		1,807		146,139		55.8	%	$	64.86	$	36.20

Super 8		2,436		155,711		60.0	%	$	50.77	$	30.46

Howard Johnson		439		46,214		50.4	%	$	62.88	$	31.68

Travelodge		425		31,075		54.3	%	$	67.35	$	36.60

Microtel Inns & Suites by Wyndham		318		22,744		63.8	%	$	67.26	$	42.88

Knights Inn		383		23,472		46.4	%	$	46.78	$	21.70

Dream		5		989		72.9	%	$	246.03	$	179.38

Night		3		630		72.8	%	$	158.86	$	115.62

Total Lodging		7,542		650,223		58.0	%	$	69.13	$	40.11

Vacation Ownership
Wyndham Vacation Ownership resorts		201		23,450		N/A			N/A		N/A

Total Wyndham Worldwide		7,743		673,673

	As of and For the Three Months Ended June 30, 2013
Brand	Number of Properties		Number of Rooms		Average Occupancy Rate			Average Daily Rate (ADR)		Average Revenue Per Available Room (RevPAR)

Lodging
Wyndham Hotels and Resorts		136		32,400		63.5	%	$	118.31	$	75.10

TRYP by Wyndham		103		14,344		64.6	%	$	95.59	$	61.75

Wingate by Wyndham		158		14,493		65.0	%	$	86.67	$	56.34

Hawthorn Suites by Wyndham		91		9,118		67.6	%	$	72.51	$	49.02

Ramada		837		114,691		54.4	%	$	80.42	$	43.78

Baymont		325		26,860		55.6	%	$	63.70	$	35.42

Days Inn		1,833		148,411		51.7	%	$	64.78	$	33.46

Super 8		2,356		150,467		59.0	%	$	52.70	$	31.08

Howard Johnson		446		45,089		48.2	%	$	62.57	$	30.18

Travelodge		437		32,607		51.9	%	$	66.48	$	34.50

Microtel Inns & Suites by Wyndham		310		22,080		60.7	%	$	64.85	$	39.34

Knights Inn		374		22,963		42.5	%	$	45.08	$	19.17

Dream		5		990		75.5	%	$	262.46	$	198.18

Night		3		630		61.5	%	$	169.06	$	103.91

Total Lodging		7,414		635,143		55.2	%	$	68.78	$	38.00

Vacation Ownership
Wyndham Vacation Ownership resorts		190		23,410		N/A			N/A		N/A

Total Wyndham Worldwide		7,604		658,553

NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

Table 6

(2 of 2)

Wyndham Worldwide Corporation

BRAND SYSTEM DETAILS

	As of and For the Six Months Ended June 30, 2014
Brand	Number of Properties		Number of Rooms		Average Occupancy Rate			Average Daily Rate (ADR)		Average Revenue Per Available Room (RevPAR)

Lodging
Wyndham Hotels and Resorts		178		39,816		61.1	%	$	115.42	$	70.55

TRYP by Wyndham		117		16,740		59.2	%	$	91.64	$	54.22

Wingate by Wyndham		158		14,436		63.9	%	$	85.95	$	54.93

Hawthorn Suites by Wyndham		98		9,737		64.7	%	$	76.76	$	49.66

Ramada		829		114,195		53.7	%	$	79.22	$	42.52

Baymont		346		28,325		52.0	%	$	64.25	$	33.40

Days Inn		1,807		146,139		50.2	%	$	63.56	$	31.92

Super 8		2,436		155,711		55.8	%	$	49.63	$	27.69

Howard Johnson		439		46,214		47.0	%	$	62.41	$	29.32

Travelodge		425		31,075		49.5	%	$	64.82	$	32.08

Microtel Inns & Suites by Wyndham		318		22,744		58.8	%	$	65.08	$	38.24

Knights Inn		383		23,472		43.6	%	$	45.50	$	19.84

Dream		5		989		73.4	%	$	217.94	$	159.91

Night		3		630		66.3	%	$	139.04	$	92.20

Total Lodging		7,542		650,223		53.5	%	$	67.78	$	36.23

Vacation Ownership
Wyndham Vacation Ownership resorts		201		23,450		N/A			N/A		N/A

Total Wyndham Worldwide		7,743		673,673

	As of and For the Six Months Ended June 30, 2013
Brand	Number of Properties		Number of Rooms		Average Occupancy Rate			Average Daily Rate (ADR)		Average Revenue Per Available Room (RevPAR)

Lodging
Wyndham Hotels and Resorts		136		32,400		60.2	%	$	115.98	$	69.80

TRYP by Wyndham		103		14,344		59.3	%	$	96.39	$	57.15

Wingate by Wyndham		158		14,493		61.0	%	$	85.05	$	51.88

Hawthorn Suites by Wyndham		91		9,118		63.1	%	$	71.57	$	45.19

Ramada		837		114,691		51.5	%	$	79.58	$	41.01

Baymont		325		26,860		50.7	%	$	62.15	$	31.50

Days Inn		1,833		148,411		47.3	%	$	63.27	$	29.91

Super 8		2,356		150,467		54.4	%	$	51.38	$	27.96

Howard Johnson		446		45,089		45.6	%	$	61.78	$	28.17

Travelodge		437		32,607		47.8	%	$	64.89	$	31.02

Microtel Inns & Suites by Wyndham		310		22,080		56.4	%	$	63.01	$	35.56

Knights Inn		374		22,963		40.4	%	$	43.34	$	17.53

Dream		5		990		68.5	%	$	220.79	$	151.31

Night		3		630		57.5	%	$	146.22	$	84.14

Total Lodging		7,414		635,143		51.3	%	$	67.35	$	34.55

Vacation Ownership
Wyndham Vacation Ownership resorts		190		23,410		N/A			N/A		N/A

Total Wyndham Worldwide		7,604		658,553

NOTE: A glossary of terms is included in Table 3 (2 of 2); RevPAR may not recalculate by multiplying average occupancy rate by ADR due to rounding.

Table 7

(1 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

Three months ended March 31, 2014	Net Revenues			Reported EBITDA			Executive Departure Costs		Venezuela Currency Devaluation^(b)		VAT Adjustment^(c)			Adjusted EBITDA
Lodging	$	237		$	64		$	4	$	-	$	-		$	68
Vacation Exchange and Rentals		379			85			-		10		-			95
Vacation Ownership		593			115			-		-		-			115
Total Reportable Segments		1,209			264			4		10		-			278
Corporate and Other ^(a)		(16	)		(34	)		-		-		-			(34	)
Total Company	$	1,193		$	230		$	4	$	10	$	-		$	244

Three months ended June 30, 2014
Lodging	$	283		$	87		$	-	$	-	$	-		$	87
Vacation Exchange and Rentals		402			89			-		-		(2	)		87
Vacation Ownership		673			185			-		-		-			185
Total Reportable Segments		1,358			361			-		-		(2	)		359
Corporate and Other ^(a)		(15	)		(35	)		-		-		-			(35	)
Total Company	$	1,343		$	326		$	-	$	-	$	(2	)	$	324

^(a)

Includes the elimination of transactions between segments.

^(b)

Represents the devaluation of the official exchange rate of Venezuela.

^(c)

Reversal of a reserve for value-added taxes.

Table 7

(2 of 2)

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATION

(In millions)

Three months ended March 31, 2013	Net Revenues			Reported EBITDA			Legacy Adjustments ^(b)			Acquisition Costs ^(c)		Restructuring Costs ^(d)		Asset Impairment ^(e)		Adjusted EBITDA
Lodging	$	222		$	58		$	-		$	-	$	-	$	-	$	58
Vacation Exchange and Rentals		374			94			-			-		-		-		94
Vacation Ownership		549			111			-			2		-		-		113
Total Reportable Segments		1,145			263			-			2		-		-		265
Corporate and Other ^(a)		(12	)		(29	)		-			-		-		-		(29	)
Total Company	$	1,133		$	234		$	-		$	2	$	-	$	-	$	236

Three months ended June 30, 2013
Lodging	$	262		$	78		$	-		$	-	$	-	$	-	$	78
Vacation Exchange and Rentals		376			85			-			-		-		-		85
Vacation Ownership		630			161			-			-		-		-		161
Total Reportable Segments		1,268			324			-			-		-		-		324
Corporate and Other ^(a)		(15	)		(27	)		-			-		-		-		(27	)
Total Company	$	1,253		$	297		$	-		$	-	$	-	$	-	$	297

Three months ended September 30, 2013
Lodging	$	297		$	95		$	-		$	-	$	-	$	-	$	95
Vacation Exchange and Rentals		470			141			-			-		-		-		141
Vacation Ownership		677			176			-			-		-		-		176
Total Reportable Segments		1,444			412			-			-		-		-		412
Corporate and Other ^(a)		(17	)		(33	)		(1	)		-		-		-		(34	)
Total Company	$	1,427		$	379		$	(1	)	$	-	$	-	$	-	$	378

Three months ended December 31, 2013
Lodging	$	245		$	47		$	-		$	-	$	9	$	8	$	64
Vacation Exchange and Rentals		305			36			-			-		-		-		36
Vacation Ownership		658			172			-			-		-		-		172
Total Reportable Segments		1,208			255			-			-		9		8		272
Corporate and Other ^(a)		(13	)		(33	)		-			-		-		-		(33	)
Total Company	$	1,195		$	222		$	-		$	-	$	9	$	8	$	239

Twelve months ended December 31, 2013
Lodging	$	1,027		$	279		$	-		$	-	$	9	$	8	$	296
Vacation Exchange and Rentals		1,526			356			-			-		-		-		356
Vacation Ownership		2,515			619			-			2		-		-		621
Total Reportable Segments		5,068			1,254			-			2		9		8		1,273
Corporate and Other ^(a)		(59	)		(122	)		1			-		-		-		(121	)
Total Company	$	5,009		$	1,132		$	1		$	2	$	9	$	8	$	1,152

__________

Note: The sum of the quarters may not agree to the twelve months ended December 31, 2013 due to rounding.

^(a)

Includes the elimination of transactions between segments.

^(b)

Relates to a net (benefit)/expense from the resolution of and adjustment to certain contingent liabilities and assets resulting from the Company's separation from Cendant.

^(c)

Relates to costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013).

^(d)

Relates to costs incurred as a result of an organizational realignment initiative.

^(e)

Relates primarily to a non-cash impairment charge from a partial write-down of the Hawthorn trademark.

Table 8

(1 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

	Three Months Ended June 30, 2014
	As Reported			Legacy Adjustments			VAT Adjustment ^(b)			As Adjusted non-GAAP
Net revenues
Service and membership fees	$	616		$			$			$	616
Vacation ownership interest sales		382									382
Franchise fees		166									166
Consumer financing		106									106
Other		73									73
Net revenues		1,343			-			-			1,343

Expenses
Operating		572									572
Cost of vacation ownership interests		42									42
Consumer financing interest		17									17
Marketing and reservation		206									206
General and administrative		181						2			183
Depreciation and amortization		59									59
Total expenses		1,077			-			2			1,079

Operating income		266			-			(2	)		264
Other income, net		(1	)								(1	)
Interest expense		29						2			31
Interest income		(3	)								(3	)

Income before income taxes		241			-			(4	)		237
Provision for income taxes		88			1	^(a)		(2	)^(c)		87
Net income attributable to Wyndham shareholders	$	153		$	(1	)	$	(2	)	$	150

Earnings per share
Basic	$	1.21		$	-		$	(0.02	)	$	1.18
Diluted		1.20			-			(0.02	)		1.17

Weighted average shares outstanding
Basic		127			127			127			127
Diluted		128			128			128			128

__________

The above table reconciles certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the line items of the income statement in order to assist investors' understanding of the overall impact of such adjustments. This non-GAAP reconciliation table should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

Note:

EPS amounts may not add due to rounding.

^(a)

Relates to the reversal of a state tax accrual.

^(b)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

^(c)

Relates to the tax effect of the adjustment.

Table 8

(2 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

	Six Months Ended June 30, 2014
	As Reported			Executive Departure Costs ^(a)			Venezuela Currency Devaluation^(c)			Legacy Adjustments			VAT Adjustment^(e)			As Adjusted non-GAAP
Net revenues
Service and membership fees	$	1,205		$			$			$			$			$	1,205
Vacation ownership interest sales		685															685
Franchise fees		293															293
Consumer financing		211															211
Other		142															142
Net revenues		2,536			-			-			-			-			2,536

Expenses
Operating		1,106						(10	)								1,096
Cost of vacation ownership interests		81															81
Consumer financing interest		35															35
Marketing and reservation		387															387
General and administrative		376			(4	)								2			374
Depreciation and amortization		115															115
Total expenses		2,100			(4	)		(10	)		-			2			2,088

Operating income		436			4			10			-			(2	)		448
Other income, net		(5	)														(5	)
Interest expense		56												2			58
Interest income		(5	)														(5	)

Income before income taxes		390			4			10			-			(4	)		400
Provision for income taxes		146			1	^(b)		1	^(b)		1	^(d)		(2)	^(b)		147

Net income		244			3			9			(1	)		(2	)		253
Net income attributable to noncontrolling interest		(1	)		-			-			-			-			(1	)

Net income attributable to Wyndham shareholders	$	243		$	3		$	9		$	(1	)	$	(2	)	$	252

Earnings per share
Basic	$	1.91		$	0.02		$	0.07		$	-		$	(0.02	)	$	1.98
Diluted		1.89			0.02			0.07			-			(0.02	)		1.96

Weighted average shares outstanding
Basic		127			127			127			127			127			127
Diluted		129			129			129			129			129			129

__________

Note: EPS amounts may not add due to rounding.

^(a)

Related to costs associated with an executive's departure at the Company's lodging business.

^(b)

Relates to the tax effect of the adjustment.

^(c)

Represents the devaluation of the official exchange rate of Venezuela at the Company's vacation exchange and rental business.

^(d)

Relates to the reversal of a state tax accrual.

^(e)

Relates to the reversal of a reserve for value-added taxes at the Company's vacation exchange and rentals business.

Table 8

(3 of 3)

Wyndham Worldwide Corporation

NON-GAAP FINANCIAL INFORMATION

(In millions, except per share data)

	Six Months Ended June 30, 2013
	As Reported			Legacy Adjustments			Acquisition Costs			Early Extinguishment of Debt			As Adjusted non-GAAP
Net revenues
Service fees and membership	$	1,152											$	1,152
Vacation ownership interest sales		611												611
Franchise fees		274												274
Consumer financing		211												211
Other		139												139
Net revenues		2,387			-			-			-			2,387

Expenses
Operating		1,056						(2	)^(b)					1,054
Cost of vacation ownership interests		64												64
Consumer financing interest		40												40
Marketing and reservation		357												357
General and administrative		342												342
Depreciation and amortization		106												106
Total expenses		1,965			-			(2	)		-			1,963

Operating income		422			-			2			-			424
Other income, net		(3	)											(3	)
Interest expense		66												66
Early extinguishment of debt		111									(111	)^(c)		-
Interest income		(4	)											(4	)

Income before income taxes		252			-			2			111			365
Provision for income taxes		92			(1)	^(a)		1	^(d)		42	^(d)		134

Net income	$	160		$	1		$	1		$	69		$	231

Earnings per share
Basic	$	1.18		$	0.01		$	0.01		$	0.51		$	1.71
Diluted		1.17			0.01			0.01			0.50			1.69

Weighted average shares outstanding
Basic		136			136			136			136			136
Diluted		137			137			137			137			137

__________

Note: EPS amounts may not add due to rounding.

^(a)

Relates to a state tax payment for legacy tax matters.

^(b)

Relates to the costs incurred in connection with the acquisition of Midtown 45, a NYC property (January 2013) at the Company's vacation ownership business.

^(c)

Represents costs incurred for the early repurchase of a portion of the Company's 7.375%, 5.75% and 6.00% senior unsecured notes and the remaining portion of the 9.875% senior unsecured notes.

^(d)

Relates to the tax effect of the adjustment.

Table 9

Wyndham Worldwide Corporation

NON-GAAP RECONCILIATIONS AND FINANCIAL INFORMATION

(In millions)

FREE CASH FLOW

We define free cash flow to be net cash provided by operating activities less property and equipment additions which we also refer to as capital expenditures.

We believe free cash flow to be a useful operating performance measure to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities as a means for evaluating Wyndham Worldwide is that free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.

The following table provides more details on the GAAP financial measure that is most directly comparable to the non-GAAP financial measure and the related reconciliation between these financial measures:

	Six Months Ended June 30,
	2014			2013

Net cash provided by operating activities	$	793		$	758
Less: Property and equipment additions		(98	)		(104	)
Free cash flow	$	695		$	654

GROSS VOI SALES

The following table provides a reconciliation of Gross VOI sales (see Table 3) to vacation ownership interest sales (see Table 4):

Year
2014	Q1			Q2			Q3			Q4			Full Year

Gross VOI sales ^(a)	$	410		$	496			N/A			N/A			N/A
Less: Sales under WAAM Fee-for-Service		(44	)		(40	)		N/A			N/A			N/A
Gross VOI sales, net of WAAM Fee-for-Service sales		366			456			N/A			N/A			N/A
Less: Loan loss provision		(60	)		(70	)		N/A			N/A			N/A
Less: Impact of percentage-of-completion accounting		(3	)		(4	)		N/A			N/A			N/A
Vacation ownership interest sales ^(a)	$	303		$	382			N/A			N/A			N/A

2013

Gross VOI sales ^(a)	$	384		$	481		$	536		$	488		$	1,889
Less: Sales under WAAM Fee-for-Service		(36	)		(44	)		(51	)		(29	)		(160	)
Gross VOI sales, net of WAAM Fee-for-Service sales		347			437			486			459			1,729
Less: Loan loss provision		(84	)		(90	)		(102	)		(73	)		(349	)
Less: Impact of percentage of completion accounting		-			-			-			(1	)		(1	)
Vacation ownership interest sales ^(a)	$	263		$	347		$	384		$	384		$	1,379

2012

Gross VOI sales ^(a)	$	384		$	460		$	502		$	435		$	1,781
Less: Sales under WAAM Fee-for-Service		(17	)		(18	)		(5	)		(10	)		(49	)
Gross VOI sales, net of WAAM Fee-for-Service sales		367			442			497			426			1,732
Less: Loan loss provision		(96	)		(100	)		(124	)		(89	)		(409	)
Vacation ownership interest sales ^(a)	$	271		$	342		$	373		$	337		$	1,323

2011

Gross VOI sales	$	319		$	412		$	455		$	409		$	1,595
Less: Sales under WAAM Fee-for-Service		(18	)		(19	)		(38	)		(31	)		(106	)
Gross VOI sales, net of WAAM Fee-for-Service sales		302			393			417			378			1,489
Less: Loan loss provision		(79	)		(80	)		(96	)		(83	)		(339	)
Vacation ownership interest sales	$	222		$	313		$	320		$	295		$	1,150

_____________

Note: Amounts may not add due to rounding.

^(a) Includes VOI sales under WAAM Just-in-Time beginning in the second quarter of 2012.

The following includes primarily tele-sales upgrades and other non-tour revenues, which are excluded from Gross VOI sales in the Company's VPG calculation (see Table 3):

	Q1		Q2		Q3		Q4		Full Year

2014	$	25	$	21		N/A		N/A		N/A
2013	$	24	$	18	$	22	$	25	$	89
2012	$	27	$	20	$	22	$	28	$	97
2011	$	18	$	18	$	21	$	11	$	68

Form: 8-K

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