WYNDHAM WORLDWIDE CORPORATION

Year Ended December 31, 2010 vs. Year Ended December 31, 2009
Our consolidated results comprised the following:
2010
Year Ended December 31,
2009 Change
Net revenues $ 3,851 $ 3,750 $ 101
Expenses 3,133 3,156 (23)
Operating income 718 594 124
Other income, net (7) (6) (1)
Interest expense 167 114 53
Interest income (5) (7) 2
Income before income taxes 563 493 70
Provision for income taxes 184 200 (16)
Net income $ 379 $ 293 $ 86
During 2010, our net revenues increased $101 million (3%) principally due to:
k a $109 million decrease in our provision for loan losses primarily due to improved portfolio performance
and mix, partially offset by the impact to the provision from higher gross VOI sales;
k a $97 million increase in gross sales of VOIs, net of WAAM sales, reflecting higher VPG and tour flow;
k a $35 million increase in net revenues from rental transactions and related services at our vacation
exchange and rentals business due to incremental revenues contributed from our acquisitions of Hoseasons,
ResortQuest and James Villa Holidays and favorable pricing at our Landal GreenParks and U.K. cottage
businesses, partially offset by the unfavorable impact of foreign exchange movements of $22 million;
k $31 million of commissions earned on VOI sales under our WAAM;
k $29 million of incremental property management fees within our vacation ownership business primarily as
a result of growth in the number of units under management;
k a $28 million increase in net revenues in our lodging business primarily due to a RevPAR increase of 3%,
an increase in ancillary revenues and other franchise fees and incremental revenues contributed from the
Tryp hotel brand acquisition, partially offset by a decline in reimbursable revenues; and
k an $8 million increase in ancillary revenues in our vacation exchange and rentals business primarily due to
incremental revenues contributed from our acquisition of ResortQuest.
Such increases were partially offset by:
k a decrease of $187 million as a result of the absence of the recognition of revenues previously deferred
under the POC method of accounting at our vacation ownership business;
k a $35 million decrease in ancillary revenues at our vacation ownership business primarily associated with
a change in the classification of revenues related to incidental operations, which were misclassified on a
gross basis during periods prior to the third quarter of 2010, and classified on a net basis within operating
expenses commencing in the third quarter of 2010; and
k a $10 million reduction in consumer financing revenues due primarily to a decline in our contract
receivable portfolio.
Total expenses decreased $23 million (1%) principally reflecting:
k a decrease of $72 million of expenses related to the absence of the recognition of revenues previously
deferred at our vacation ownership business, as discussed above;
k a $54 million net benefit recorded during 2010 related to the resolution of and adjustment to certain
contingent liabilities and assets primarily due to the settlement of the IRS examination of Cendant’s tax
years 2003 through 2006 on July 15, 2010;
k a $43 million decrease in marketing and reservation expenses due to the change in tour mix in our
vacation ownership business and lower marketing overhead costs at lodging business;
k $38 million of decreased costs related to organizational realignment initiatives across our businesses (see
Restructuring Plans for more details);
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