WYNDHAM WORLDWIDE CORPORATION

k a $40 million increase in accrued expenses and other current liabilities primarily due to higher accrued
employee incentive compensation costs across all of our businesses, higher accrued interest on our nonsecuritized
long-term debt and increased litigation expenses at our vacation ownership business; and
k a $14 million increase in accounts payable primarily due to the acquisitions of Hoseasons, ResortQuest
and James Villa Holidays, partially offset by the timing of payments on accounts payable across all of our
businesses.
Total stockholders’ equity increased $229 million primarily due to:
k $379 million of net income generated during 2010;
k $188 million related to the reversal of net deferred tax liabilities primarily attributable to an installment
sale recognition adjustment resulting from the IRS settlement;
k a $40 million impact resulting from the exercise of stock options during 2010;
k a change of $17 million in deferred equity compensation;
k a $12 million increase to our pool of excess tax benefits available to absorb tax deficiencies due to the
vesting of equity awards;
k a $12 million impact resulting from (i) the reclassification of an $8 million after-tax unrealized loss
associated with the termination of an interest rate swap agreement in connection with the early
extinguishment of our term loan facility during the first quarter of 2010 (see Note 13 — Long-Term Debt
and Borrowing Arrangements) and (ii) $4 million of unrealized gains on cash flow hedges, net of tax; and
k $5 million of currency translation adjustments, net of a tax benefit.
Such increases were partially offset by:
k $237 million of treasury stock purchased through our stock repurchase program;
k $98 million for the repurchase of warrants; and
k $89 million related to dividends.
LIQUIDITY AND CAPITAL RESOURCES
Currently, our financing needs are supported by cash generated from operations and borrowings under our
revolving credit facility. In addition, certain funding requirements of our vacation ownership business are met
through the issuance of securitized debt to finance vacation ownership contract receivables. We believe that our net
cash from operations, cash and cash equivalents, access to our revolving credit facility and continued access to the
securitization and debt markets provide us with sufficient liquidity to meet our ongoing needs.
During March 2010, we replaced our five-year $900 million revolving credit facility with a $950 million
revolving credit facility that expires on October 1, 2013 and, subsequently, increased the capacity of this facility to
$970 million in the fourth quarter of 2010. In October 2010, we renewed our 364-day, non-recourse, securitized
vacation ownership bank conduit facility, with a term through September 2011 and total capacity of $600 million.
We may, from time to time, depending on market conditions and other factors, repurchase our outstanding
indebtedness, including our convertible notes, whether or not such indebtedness trades above or below its face
amount, for cash and/or in exchange for other securities or other consideration, in each case in open market
purchases and/or privately negotiated transactions.
CASH FLOWS
During 2010 and 2009, we had a net change in cash and cash equivalents of $1 million and $19 million,
respectively. The following table summarizes such changes:
2010
Year Ended December 31,
2009 Change
Cash provided by/(used in):
Operating activities $ 635 $ 689 $ (54)
Investing activities (418) (109) (309)
Financing activities (219) (561) 342
Effects of changes in exchange rate on cash and cash equivalents 3 — 3
Net change in cash and cash equivalents $ 1 $ 19 $ (18)
58