Wyndham Reports 4th Quarter Loss Compared with Year-earlier Profit

Takes Charge of $1.3 billion Related to Adverse Financial Markets and the Reduction of its Vacation

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. February 13, 2009

PARSIPPANY, NJ, February 13, 2009 - Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months and year ended December 31, 2008.

FOURTH QUARTER and FULL YEAR 2008 HIGHLIGHTS:

During the fourth quarter of 2008, the Company incurred significant non-cash goodwill and other impairment charges, restructuring charges, currency conversion losses related to the transfer of cash from our Venezuela operations and some positive legacy adjustments.

"There are several special items in the fourth quarter results for 2008, including a goodwill impairment charge, restructuring costs and foreign currency conversion losses. If you remove those items, Wyndham Worldwide produced operating income growth in the fourth quarter and full year 2008. These positive operating results reflect our resilient business model and proactive efforts by the management team to reduce costs, improve productivity and grow market share," said Stephen P. Holmes, Chairman and CEO, Wyndham Worldwide.

o On an adjusted basis, fourth quarter 2008 net income and earnings per share increased 1% and 2%, respectively, compared with 2007.

o Fourth quarter revenues of $911 million declined by 12% compared with 2007, reflecting a significant and deliberate slowdown of the vacation ownership business implemented during the quarter and increased loan loss provision, coupled with an adverse foreign currency effect due to the strengthening U.S. dollar.

o The Company incurred a non-cash goodwill impairment charge of $1.3 billion related to the adverse financial markets and the previously announced reduction of its vacation ownership business. This goodwill impairment charge has no impact on the Company's cash position, liquidity or credit agreements.

o Fourth quarter adjusted net income was $84 million, or $0.47 diluted earnings per share, excluding the special items (as detailed above). Fourth quarter reported net loss was $1.4 billion or a loss of $7.63 per share primarily driven by the $1.3 billion non-cash goodwill impairment charge.

o Lodging opened over 19,000 rooms in the fourth quarter of 2008, ending the year with net growth of 8% (including the acquisition of the Microtel and Hawthorn brands) and grew its pipeline by almost 6,000 rooms to approximately 111,000, up 5% from prior year. Over 55% of this pipeline is new construction and the majority of the properties scheduled to open in 2009 have already secured financing or are under construction.

o Full-year 2008 revenues were approximately $4.3 billion, essentially flat compared to 2007, despite the slow-down of the vacation ownership business implemented in the fourth quarter.

o Full-year 2008 adjusted net income was $388 million, or $2.18 diluted earnings per share, excluding special items. Full year reported net loss was $1.1 billion or a loss of $6.05 per share.

FOURTH QUARTER 2008 OPERATING RESULTS

Revenues for the fourth quarter of 2008 were $911 million, down 12% over the same period in 2007, primarily reflecting the reduction of the vacation ownership business and increased loan loss provision, as well as the unfavorable foreign currency impact due to the strengthening dollar in the vacation exchange and rentals business.

Reported net loss for the fourth quarter of 2008 was $1.4 billion, or a loss of $7.63 per share, compared with net income of $104 million, or $0.58 diluted earnings per share, for the fourth quarter of 2007. 2008 results include $1.4 billion of non-cash asset impairment charges.

The Company recorded a non-cash charge of $1.3 billion to reduce the value of its goodwill related to the vacation ownership business. This charge has no impact on the Company's cash position, liquidity or credit agreements.

Also included in 2008 fourth quarter results are the after-tax impacts of $45 million in restructuring costs, $41 million of other asset impairments, currency conversion losses related to the transfer of cash from our Venezuela operations of $24 million and the net benefit from $7 million of legacy adjustments.

Adjusted net income for the fourth quarter of 2008 was $84 million, or $0.47 diluted earnings per share, compared with adjusted net income of $83 million, or $0.46 diluted earnings per share, for the fourth quarter of 2007. Fourth quarter 2007 adjusted earnings per share excludes the after-tax impact of a net benefit of $21 million legacy adjustments.

On an adjusted basis, fourth quarter 2008 net income and earnings per share increased 1% and 2%, respectively, compared with 2007.

FULL YEAR 2008 OPERATING RESULTS

Revenues for full year 2008 were $4.3 billion essentially flat compared with 2007 revenues of $4.4 billion.

o Lodging revenues grew 4% primarily due to incremental international properties and the Microtel and Hawthorn brands acquisition, which offset a 2% decline in worldwide revenue per available room (RevPAR).

o Vacation Exchange and Rentals revenues increased 3% compared with full year 2007, reflecting the overall full year favorable impact of foreign currency along with increases in average vacation exchange members and average price per vacation rental. This was partly offset by declines in the number of vacation rental transactions and average annual dues and exchange fees per member.

o Vacation Ownership full year 2008 net revenues decreased 6%, reflecting a higher provision for loan losses, an increase in deferred revenue and the deliberate slowdown in the sales pace which was partially offset by increased property management fees and higher consumer finance income.

Net loss for the full year 2008 was $1.1 billion, or a loss of $6.05 per share, compared with net income of $403 million, or $2.20 diluted earnings per share, for full year 2007.

On an adjusted basis, net income for the full year 2008 was $388 million, or $2.18 diluted earnings per share, compared with adjusted net income of $387 million, or $2.12 diluted earnings per share, for full year 2007. 2008 adjusted diluted earnings per share excludes the after-tax impacts of the following special items: a $1.3 billion non-cash goodwill impairment charge for Vacation Ownership, $58 million in other non-cash impairment charges, $49 million in restructuring costs to reduce overhead and streamline operations, a $24 million cash charge due to currency conversion losses related to the transfer of cash from our Venezuela operations and the net benefit of $6 million legacy adjustments. 2007 adjusted diluted earnings per share excludes the after-tax impact of $10 million of separation and related costs and a net benefit of $26 million legacy adjustments. On an adjusted basis, full year 2008 net income and diluted earnings per share were flat and up 3%, respectively, compared with 2007.

BUSINESS UNIT RESULTS

Lodging (Wyndham Hotel Group)

Revenues were $170 million in the fourth quarter of 2008, a decline of 3% compared with the fourth quarter of 2007, primarily reflecting a decline in worldwide RevPAR and lower property management reimbursable revenues, partly offset by higher revenues resulting from the July 2008 Microtel and Hawthorn brands acquisition and incremental international properties.

In constant currency, system-wide RevPAR decreased 6.4%, reflecting declines of 9.3% and 1.6% in domestic and international RevPAR, respectively. Including the impact of foreign currency, RevPAR declined 9.2% in the fourth quarter of 2008.

Property management reimbursable revenues were $21 million and marketing/reservation revenues, including Wyndham Rewards revenues, were $63 million in the fourth quarter of 2008, compared with $28 million and $65 million, respectively, in the fourth quarter of 2007; these items contribute little, if any, margin.

Fourth quarter 2008 EBITDA was $38 million, a 22% decline compared with the fourth quarter of 2007, primarily driven by a $16 million non-cash impairment charge and a decline in worldwide RevPAR, partly offset by cost containment initiatives. Excluding the impairment charge, adjusted fourth quarter 2008 EBITDA would have been $54 million, a 10% increase over the prior year.

As of December 31, 2008, the Company's hotel system consisted of approximately 592,900 rooms and 7,040 properties, of which 21% were international, with a development pipeline of approximately 990 hotels and 111,000 rooms, of which 55% were new construction and 42% were international.

Vacation Exchange and Rentals (Group RCI)

Revenues were $250 million in the fourth quarter of 2008, an 11% decrease compared with the fourth quarter of 2007, reflecting a decline in exchange transactions and lower average pricing due to transactional mix and unfavorable foreign currency. In constant currency, revenues decreased 3%.

Vacation rental revenues were $113 million, a 10% decrease compared with the fourth quarter of 2007. Excluding the unfavorable impact of foreign currency translation, net revenues generated from rental transactions and related services were flat.

Annual dues and exchange revenues were $101 million, a 9% decline compared with the fourth quarter of 2007, or a 3% decrease excluding the unfavorable effect of foreign currency translation. The results, excluding foreign currency, reflect a 6% decline in revenue per member, partially offset by a 3% increase in the average number of members.

Other ancillary revenues were $36 million, a 16% decrease compared with the fourth quarter of 2007, reflecting lower travel service revenues and an unfavorable foreign currency translation impact.

Fourth quarter 2008 EBITDA was ($4) million compared with fourth quarter 2007 EBITDA of $56 million, reflecting $24 million of currency conversion losses related to the transfer of cash from our Venezuela operations, $21 million of non-cash impairment charges relating to intangible and other fixed assets, a $15 million non-cash impairment of a non-performing investment and $7 million of restructuring costs. Excluding the above mentioned special items adjusted fourth quarter EBITDA was $63 million, a 13% increase over the prior year, this includes $10 million of net favorable foreign currency impact.

Vacation Ownership (Wyndham Vacation Ownership)

Gross Vacation Ownership Interest (VOI) sales were $432 million for the fourth quarter of 2008, down 11% compared with the fourth quarter of 2007. This decrease was primarily driven by the previously announced realignment initiative that included a refocusing of the Company's sales and marketing efforts resulting in fewer tours.

Consumer finance revenues increased $16 million to $112 million in the fourth quarter of 2008, up 17% compared with the fourth quarter of 2007, reflecting continued growth in the portfolio.

Reported revenues were $492 million in the fourth quarter of 2008, down 15% compared with the fourth quarter of 2007, primarily reflecting a higher provision for loan losses, lower tour flow and volume per guest (VPG) due to the reduction of the business. During the fourth quarter of 2008, the Company recognized $14 million of previously deferred revenue, while in the fourth quarter of 2007 reported revenues were reduced by $21 million of deferred revenue under the percentage-of-completion method of accounting.

EBITDA for the fourth quarter of 2008 was a loss of $1.3 billion, compared with earnings of $99 million in the fourth quarter of 2007, driven by the $1.3 billion non-cash goodwill impairment charge. Excluding $66 million of restructuring costs and $1.3 billion of impairment charges, adjusted fourth quarter 2008 EBITDA was $91 million or down 8% versus the prior year.

Other Items

Interest expense increased $5 million to $22 million during the fourth quarter of 2008 compared with the fourth quarter of 2007 reflecting higher debt and lower capitalized interest due to less vacation ownership development. Interest income for the quarter was $4 million, a $2 million increase from the comparable prior year period. Depreciation and amortization rose $3 million to $47 million.

Balance Sheet Information as of December 31, 2008:

o Cash and cash equivalents of approximately $135 million compared with approximately $210 million at December 31, 2007

o Vacation ownership contract receivables, net, of $3.3 billion compared with $2.9 billion at December 31, 2007

o Vacation ownership and other inventory of approximately $1.3 billion compared with approximately $1.2 billion at December 31, 2007

o Securitized vacation ownership debt of $1.8 billion compared with $2.1 billion at December 31, 2007

o Other debt of $2.0 billion, compared with $1.5 billion at December 31, 2007, resulting in borrowing capacity on revolving credit facility of approximately $290 million compared with $750 million as of December 31, 2007

A schedule of debt is included in the financial tables section of this press release.

Outlook

Given the disruptions in the global economy and capital markets, and uncertainty about how these will impact employment, consumer spending and other macroeconomic drivers, guidance related to Wyndham Worldwide's 2009 performance is subject to higher than normal levels of uncertainty. The following guidance reflects assumptions used for internal planning purposes. If economic conditions improve or deteriorate materially from current levels, these assumptions and our guidance may change materially.

For the first quarter of 2009, the Company expects adjusted EPS of $0.35 - $0.40 based on weighted average shares of approximately 178 million.

The Company's full-year 2009 guidance is:

o Revenues of $3.5 - $3.9 billion

o Adjusted EBITDA of $760 - $810 million

o Depreciation and amortization expense of $185 - $195 million

o Interest expense, net of $80 - $90 million

o Effective tax rate of approximately 39%

o Adjusted net income of $289 - $331 million

o Adjusted EPS of $1.61 - $1.85 based on weighted average shares of approximately 179 million

All guidance excludes legacy items and restructuring costs, if any, which may have a positive or negative impact on reported results.

Presentation of Financial Information

Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons.