WYNDHAM WORLDWIDE CORPORATION

Other Guarantees/Indemnifications
In the ordinary course of business, the Company’s vacation ownership business provides guarantees to certain
owners’ associations for funds required to operate and maintain vacation ownership properties in excess of assessments
collected from owners of the VOIs. The Company may be required to fund such excess as a result of unsold Companyowned
VOIs or failure by owners to pay such assessments. These guarantees extend for the duration of the underlying
subsidy or similar agreement (which generally approximate one year and are renewable at the discretion of the Company
on an annual basis) or until a stipulated percentage (typically 80% or higher) of related VOIs are sold. The maximum
potential future payments that the Company could be required to make under these guarantees was approximately
$373 million as of December 31, 2010. The Company would only be required to pay this maximum amount if none of
the owners assessed paid their assessments. Any assessments collected from the owners of the VOIs would reduce the
maximum potential amount of future payments to be made by the Company. Additionally, should the Company be
required to fund the deficit through the payment of any owners’ assessments under these guarantees, the Company would
be permitted access to the property for its own use and may use that property to engage in revenue-producing activities,
such as rentals. During 2010, 2009 and 2008, the Company made payments related to these guarantees of $12 million,
$10 million and $7 million, respectively. As of December 31, 2010 and 2009, the Company maintained a liability in
connection with these guarantees of $17 million and $22 million, respectively, on its Consolidated Balance Sheets.
From time to time, the Company may enter into a hotel management agreement that provides the hotel owner
with a minimum return. Under such agreement, the Company would be required to compensate for any shortfall
over the life of the management agreement up to a specified aggregate amount. The Company’s exposure under
these guarantees is partially mitigated by the Company’s ability to terminate any such management agreement if
certain targeted operating results are not met. Additionally, the Company is able to recapture a portion or all of the
shortfall payments and any waived fees in the event that future operating results exceed targets. As of December 31,
2010, the maximum potential amount of future payments to be made under these guarantees is $16 million with an
annual cap of $3 million or less. As of both December 31, 2010 and 2009, the Company maintained a liability in
connection with these guarantees of less than $1 million on its Consolidated Balance Sheets.
As part of the Wyndham Asset Affiliation Model, the Company may guarantee to purchase from the developer
inventory associated with the developer’s resort property for a percentage of the original sale price if certain future
conditions exist. The maximum potential future payments that the Company could be required to make under these
guarantees was approximately $15 million as of December 31, 2010. As of December 31, 2010, the Company has
no recognized liabilities in connection with these guarantees.
See Note 22 — Separation Adjustments and Transactions with Former Parent and Subsidiaries for contingent
liabilities related to the Company’s Separation.
17. Accumulated Other Comprehensive Income
The components of AOCI are as follows:
Currency
Translation
Adjustments
Unrealized
Gains/(Losses)
on Cash Flow
Hedges, Net
Pension
Liability
Adjustment
Accumulated
Other
Comprehensive
Income
Balance, December 31, 2007, net of tax of $47 $ 217 $ (26) $ 3 $ 194
Period change (76) (19) (1) (96)
Balance, December 31, 2008, net of tax benefit of $72 141 (45) 2 98
Period change 25 18 (3) 40
Balance, December 31, 2009, net of tax benefit of $32 166 (27) (1) 138
Current period change 5 12 (*)
— 17
Balance, December 31, 2010, net of tax benefit of $40 $ 171 $ (15) $ (1) $ 155
(*)
Primarily represents the reclassification of an after-tax unrealized loss associated with the termination of an interest rate swap agreement in connection
with the early extinguishment of the term loan facility (see Note 13 — Long-Term Debt and Borrowing Arrangements).
Foreign currency translation adjustments exclude income taxes related to investments in foreign subsidiaries
where the Company intends to reinvest the undistributed earnings indefinitely in those foreign operations.
18. Stock-Based Compensation
The Company has a stock-based compensation plan available to grant non-qualified stock options, incentive
stock options, SSARs, restricted stock, RSUs and other stock or cash-based awards to key employees, non-employee
directors, advisors and consultants. Under the Wyndham Worldwide Corporation 2006 Equity and Incentive Plan,
which was amended and restated as a result of shareholders’ approval at the May 12, 2009 annual meeting of
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