WYNDHAM WORLDWIDE CORPORATION

at our U.K. and France destinations through our U.K. cottage business, (iii) increased commissions on new properties
at our U.K. cottage business and (iv) a $10 million increase primarily related to a change in the classification of
third-party sales commission fees to operating expenses, which were misclassified as contra revenue in prior periods.
Rental transaction volume remained relatively flat during 2010 as compared to 2009 as the favorable impact at our
Novasol business was offset by lower volume at our Landal GreenParks business.
Exchange and related service revenues, which primarily consist of fees generated from memberships, exchange
transactions, member-related rentals and other member servicing, decreased $2 million during 2010 compared with
2009. Excluding the favorable impact of foreign exchange movements of $6 million, exchange and related service
revenues decreased $8 million (1%) driven by a 1% decrease in the average number of members primarily due to
lower enrollments from affiliated resort developers during 2010. Exchange revenue per member remained relatively
flat as higher transaction revenues resulting from favorable pricing and the impact of a $4 million increase related to
a change in the classification of third-party credit card processing fees to operating expenses, which were
misclassified as contra revenue in prior periods, was offset by lower travel services fees resulting from the
outsourcing of our European travel services to a third-party provider during the first quarter of 2010 and lower
exchange and subscription revenues, which we believe is the result of the impact of club memberships and member
retention programs offered at multi-year discounts.
Ancillary revenues increased $8 million during 2010 compared to 2009. Excluding the impact to ancillary
revenues from the acquisition of ResortQuest, such increase was $2 million, which relates to higher fees generated
from programs with affiliated resorts.
Excluding the impact from our acquisitions, EBITDA further reflects a decrease in expenses of $11 million
(1%) primarily driven by:
k the favorable impact of $15 million from foreign exchange transactions and foreign exchange hedging
contracts;
k the favorable impact of foreign currency translation on expenses of $9 million;
k $5 million of lower volume-related and marketing costs; and
k $4 million of lower bad debt expense.
Such decreases were partially offset by:
k a $14 million increase in expenses primarily resulting from a change in the classification of third-party
sales commission fees and credit card processing fees to operating expenses, which were misclassified as
contra revenue in prior periods;
k $5 million of increased operating expenses, which includes an unfavorable impact from value added
taxes; and
k $3 million of higher costs related to organizational realignment initiatives (see Restructuring Plan for more
details).
We expect net revenues of approximately $1.4 billion to $1.5 billion during 2011. In addition, as compared to
2010, we expect our operating statistics during 2011 to perform as follows:
k vacation rental transactions and average net price per vacation rental to increase 18-20%;
k average number of members to be flat; and
k exchange revenue per member to be up to 1-3%.
Vacation Ownership
Net revenues and EBITDA increased $34 million (2%) and $53 million (14%), respectively, during the year
ended December 31, 2010 compared with the same period during 2009.
The increase in net revenues and EBITDA during the year ended December 31, 2010 primarily reflects a
decline in our provision for loan losses, an increase in gross VOI sales, incremental revenues associated with
commissions earned on VOI sales under our newly implemented WAAM and property management revenues,
partially offset by the absence of the recognition of previously deferred revenues and related expenses during the
year ended December 31, 2009 and lower ancillary revenues. The increase in EBITDA reflected the absence of costs
incurred in 2009 related to organizational realignment initiatives, lower consumer financing interest expense, lower
marketing expenses, a decline in expenses related to our non-core businesses and non-cash impairment charges.
EBITDA was further impacted by higher employee related expenses, increased costs of VOI sales, increased costs
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