Forward Looking Statements These presentations contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements generally can be identified by phrases such as Wyndham Worldwide or its management believes, expects, anticipates, foresees, forecasts, estimates or other similar words or phrases. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. Future results, performance and achievements may be affected by general economic conditions, the impact of war and terrorist activity, business and financing conditions, foreign exchange fluctuations, cyclicality and operating risks associated with the hospitality industry including the hotel, vacation exchange and vacation ownership businesses, competition, governmental and regulatory actions (including the impact of changes in U.S. and foreign tax laws and their interpretation) and other circumstances and uncertainties. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forwardlooking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Wyndham Worldwide Corporation Stephen P. Holmes Chairman & CEO Wyndham Worldwide - Today 2 Wyndham Worldwide WYN Wyndham Hotel Group Lodging RCI Global Vacation Network Vacation Exchange and Rentals Wyndham Vacation Ownership Vacation Ownership World s largest lodging franchisor as measured by the number of franchised hotels, approx. 34,000 rooms and 6,400 properties World s largest lodging loyalty program, based on number of participating hotels. 2% of WYN s 2006 combined segment EBITDA World s largest vacation exchange network, nearly 3.4 million members Leading European Vacation Rental Group, approx. 63,000 properties 3% of WYN s 2006 combined segment EBITDA World s largest vacation ownership business with over 18,000 units, 140 resorts and more than 70,000 owner families Leading provider of points-based timeshare 40% of WYN s 2006 combined segment EBITDA
Wyndham Worldwide History, Strategy for Growth 3 1990 199 2000 200 Demographics and Travel Trends Baby Boomers Leisure Travel International Family Travel Generation X Emerging Markets 4 Hospitality powerhouse with well-recognized brands, quality service and a diverse range of properties. Growth Factors Baby Boomers Generation X Family and Leisure travel trends International customers and markets
Demographics Drive Our Business Age Population Median Income % of Population % of Leisure Travelers % of Vacation Ownership Purchasers Leisure Trip Spending per Capita Baby Boomers 42 60 76 Million $7,000 3% 42% 1% $1,130 Generation X 30 41 49 Million $3,000 26% 22% 12% $1,286 Average age of vacation ownership purchaser: 2 Sources U.S. Census Bureau 200 data, Yankelovich, Inc 2006 National Leisure Travel Monitor, ARDA, D.K. Shifflet & Associates Ltd. 6 Leisure Travel Family Travel Traveled with Children* - U.S. Market Global Travel Purpose of Trip Leisure 0% +10% annual growth 26% 28% 31% 34% 36% Business 16% +7% annual growth Other 34% friends and family visits; medical, religious; etc. Note: Data based on domestic and international arrivals summarized by country, 200 WTO World Tourism Overview 2001 2002 2003 2004 200 * Children are defined as 18 years of age or younger Sources World Tourism Organization 200 World Tourism Overview, Yankelovich, Inc 2006 National Leisure Travel Monitor, ARDA
7 U.S. Hotel Room Nights Leisure growing faster than Business Millions of Room Nights 1200 Total Business Leisure 1000 800 600 400 200 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006F Sources D.K. Shifflet & Associates Ltd. 8 International Travel Percent of Tourism % % 4% 3% 19% Growth Rate Europe +% Middle East +21% Africa +8% Central/South America +16% Asia/Pacific +27% Other Various 14% Sources World Tourism Organization 200 World Tourism Overview.
Breadth and Diversity of Product Offering 9 Luxury Upscale Midscale Economy Extended Stay Vacation Ownership Vacation Exchange and Rentals Wyndham Hotels and Resorts, Wyndham Garden Ramada, Wingate Inn, Howard Johnson, AmeriHost, Baymont Days Inn, Super 8, Travelodge, Knights Inn Wyndham, Fairfield, Trendwest RCI Landal, ECC, Novasol, Cuendet Ritz-Carlton JW Marriott Marriott Renaissance Courtyard Fairfield Inn SpringHill Residence Inn TownPlace Marriott VacationClub VillaVacation St. Regis Luxury Coll. Westin Hotels W Hotels Sheraton Le Meridien Four Points by Sheraton Starwood Vacation Club Waldorf Conrad Hilton Hilton Garden Inn Doubletree Embassy Hampton Homewood Hilton Grand Vacations Cambria Quality Clarion Sleep Inn MainStay Comfort Inn Comfort Econo Lodge Rodeway Inn Suburban Hotels MainStay Inter- Continental Crowne Plaza Hotel Indigo Holiday Inn Holiday Express Staybridge Candlewood Regent Radisson Park Plaza Country Inns & Park Inn Four Seasons Fractional Hyatt Regency Grand Hyatt Park Hyatt Hyatt Casino Ameri Summerfield Hawthorne Hyatt Vacation Club Benefits of Breadth and Diversity Industry Cycles 10 Wyndham Worldwide % of EBITDA 1 10 U.S. RevPAR Annual Percentage Change by Month 7-10 years from trough to trough Hotel 2% 0 - -10-1 1989 1991 1993 199 1997 1999 2001 2003 200 Average annual RevPAR growth + 4.% Current cycle in fourth growth year Vacation Ownership 40% $ billions 10 9 8 7 6 4 3 2 1 0 U.S. Vacation Ownership Industry Annual Revenues Positive annual growth since 1974 1 year CAGR = 14% 1990 1992 1994 1996 1998 2000 2002 2004 Vacation Exchange and Rentals 3% $ millions 600 00 400 300 Global Vacation Exchange Industry Annual Revenues Positive annual growth since 1974 9 year CAGR = 11% 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 Sources: Hotel Chart Smith Travel Research Vacation Ownership Chart ARDA, Ernst & Young, PricewaterhouseCoopers and NorthCourse (a subsidiary of Wyndham Worldwide) For every Vacation Exchange kind of Chart traveler. Public filings For from every the Division kind of Florida of trip. Land Sales, Condominiums, and Mobile Homes of the Department of Business and Professional Regulation
Timeshare = Housing 11 $ Billion 9 1 st Gulf War Home Sales versus Timeshare Sales Sept 11th Millions of units 7 8 6. 7 6 6 U.S. Home Sales (a). 4 4. 3 4 2 U.S. Timeshare Sales (b) 3. 1 1990 1991 1992 1993 1994 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 3 Source: (a) U.S. Census Bureau (b) American Resort Development Association, NorthCourse (a subsidiary of Wyndham Worldwide), Ernst & Young Return on Invested Capital 12 ($ in Millions) 9/30/0 9/30/06 12/31/0 Debt, excluding securitized debt $ 1,164 $ 1,164 $ 1,164 Equity 3,612 3,612 3,612 Adjustments: Net income Q1 Q3 2006 (194) - (194) Net income Q4 200 (91) - - Adjusted capitalization 4,491 4,776 4,82 Cash (100) (160) (100) Adjusted net capitalization $ 4,391 $ 4,616 $ 4,482 Average capital employed Adjusted EBIT for the 12 months ended 9/30/06 and 12/31/0 ROIC $ 4,04 $ 80 12.9% $ 4,482 $ 64 12.6%
Internal Rate of Return 13 IRR is used to evaluate discrete opportunities: Key money for hotel management contracts 40% Most recent hotel brand acquisition 3% Incremental investment in vacation rental sites 2% Vacation ownership product development and growth capital expenditures 30% Additional benefits: Consumer finance spread Property management Upgrade sales to owner base Establish sales office Capital Allocation 14 1. Invest in our businesses 2. Tuck-in acquisitions / strategic transactions 3. Reduce debt / buyback stock / pay dividend Credit Ratio Guidelines Debt excluding securitized debt mid-high 2x EBITDA excluding net consumer receivables income
Valuation Upside 1 ($ in Millions) 200 Revenues % of Oper. Income from Timeshare 2006 TTM EV/EBITDA 2007 Forward P/E Wyndham Worldwide (WYN) $ 3,471 40.6% 11.0x 16.8x Hilton (HLT) $ 4,437 16.6% 14.6x 26.1x Marriott (MAR) $ 11,0 26.6% 17.0x 24.8x Starwood (HOT) $,977 26.2% 13.8x 26.1x Choice (CHH) $ 477 N/A 18.0x 26.7x Notes: EV/EBITDA is defined as Enterprise Value divided by Trailing Twelve Months EBITDA Forward P/E is defined as share price on December 8, 2006 divided by 2007E First Call consensus EPS Sources: Financial data provided by Capital IQ, Thomson Financial and Company filings