WYNDHAM WORLDWIDE CORPORATION

k $25 million of increased costs related to sales incentives awarded to owners;
k $11 million of increased litigation settlement reserves;
k a non-cash charge of $9 million to impair the value of certain vacation ownership properties and related
assets held for sale that are no longer consistent with our development plans; and
k $4 million of increased costs related to our trial membership marketing program.
Our active development pipeline consists of approximately 160 units in one U.S. state, a decline from
1,400 units as of December 31, 2008 primarily due to our initiative to reduce our VOI sales pace.
Corporate and Other
Corporate and Other expenses increased $46 million in 2009 compared to 2008. Such increase primarily
includes:
k a $24 million unfavorable impact from the resolution of and adjustment to certain contingent liabilities and
assets recorded during 2009 as compared to 2008;
k increased corporate expenses primarily due to $11 million of employee incentive programs and severance,
$9 million of hedging activity and $5 million of other, including additional rent associated with the
consolidation of two leased facilities into one, partially offset by $6 million of cost savings initiatives; and
k $1 million of costs relating to organizational realignment initiatives (see Restructuring Plan for more
details).
Other Income, Net
Other income, net decreased $5 million during 2009 as compared to 2008. Such decrease includes:
k a $4 million decline in net earnings from equity investments;
k the absence of $2 million of income associated with the assumption of a lodging-related credit card
marketing program obligation by a third party; and
k the absence of $2 million of income associated with the sale of a non-strategic asset at our lodging
business.
Such decreases were partially offset by $2 million of higher gains associated with the sale of non-strategic
assets at our vacation ownership business. Such amounts are included within our segment EBITDA results.
Interest Expense/Interest Income
Interest expense increased $34 million during 2009 compared to 2008 as a result of (i) a $25 million increase
in interest incurred on our long-term debt facilities resulting from our May 2009 debt issuances (see Note 13 —
Long-Term Debt and Borrowing Arrangements) and (ii) $9 million of lower capitalized interest at our vacation
ownership business due to lower development of vacation ownership inventory. Interest income decreased $5 million
during 2009 compared to 2008 due to decreased interest earned on invested cash balances as a result of lower rates
earned on investments.
RESTRUCTURING PLANS
2010 RESTRUCTURING PLAN
In connection with the recent implementation of significant technology enhancements at our vacation exchange
and rentals business during 2010, we committed to a strategic realignment initiative targeted at reducing costs, which
will primarily impact the operations at one of our call centers. Such plan resulted in $9 million in restructuring costs
during 2010 and will result in the termination of approximately 330 employees. The liability of $9 million is
expected to be paid out in cash primarily by the second quarter of 2011. We anticipate additional restructuring costs
of approximately $2 million during the second quarter of 2011 primarily for facility-related costs, which will be
paid in cash over the life of the remaining lease term. We anticipate annual net savings from such initiative of
$9 million.
2008 RESTRUCTURING PLAN
In response to a deteriorating global economy, during 2008, we committed to various strategic realignment
initiatives targeted principally at reducing costs, enhancing organizational efficiency, reducing our need to access the
asset-backed securities market and consolidating and rationalizing existing processes and facilities. As a result, we
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