Forward Looking Statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. Such forwardlooking statements include projections. Such projections were not prepared in accordance with public guidelines of the American Institute of Certified Public Accountants regarding projections and forecasts, nor have such projections been audited, examined or otherwise reviewed by independent auditors of Wyndham Worldwide Corporation (“WYN”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Wyndham Worldwide to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward looking statements are specified in Wyndham Worldwide’s most recent Form 10-K under “Risk Factors” filed with the Securities and Exchange Commission. Except for ongoing obligations of Wyndham Worldwide to disclose material information under the federal securities laws, Wyndham Worldwide does not undertake any obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. The information in this presentation should be read in conjunction with the consolidated financial statements and accompanying notes, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Wyndham Worldwide's 2012 Form 10-K and Form 10-Q for the quarterly period ending September 30, 2013 filed with the Securities and Exchange Commission on February 15, 2013 and October 23, 2013 respectively. 2 THE W YNDHAM W ORLDWIDE STORY Powerful Cash Flow Drives Dependable Growth * 2011-2015 Business Execution Sustainable annual free cash flow Successful! Target $750M EPS growth* 17-21% CAGR 3 Agenda Three solid platforms Strong execution Delivers dependable growth 4 W YNDHAM W ORLDW IDE TODAY Leading Positions in Leisure Industry Business Segment Market Position Worldwide % of 2012 Adjusted EBITDA Major Brands Include Hotel Group #1 Hotel franchisor by hotels Exchange & Rentals 23% #1 Timeshare exchange and rental company 29% Vacation Ownership #1 Timeshare developer 48% 5 W YNDHAM W ORLDW IDE TODAY Majority of Income from Fee-for-Service Businesses Revenues Advantages: Strong cash flow ~ 40% ~ 60% Low capital intensity Other Fee-for-Service Businesses Recurring revenues Stable earnings • • • • • Hotel Franchising Fees Vacation Exchange Fees Vacation Rentals Fees Property Management Fees WAAM 1.0 6 W YNDHAM W ORLDW IDE TODAY Uniquely Positioned in the Industry High (15%) WYN Other lodging companies Cash Flow Yield • High free cash flow • Diversified revenue streams Low (0%) Low Diversified Revenues High product lines & demographics 7 Three Strong Platforms for Growth Hotel Group Exchange & Rentals Vacation Ownership 8 HOTEL GROUP Building On Leading Global Position Strengths • $290M - $305M World’s largest hotel franchisor – • Adjusted EBITDA over 638,300 rooms and 7,440 hotels Leader of the economy & midscale segment $271M $214M $190M $178M Strategic Priorities • Grow system size – – • Strengthen value proposition – – • add new rooms retain every desired property upgrade and improve technology generate more bookings through our own channels Drive organizational excellence – – 2009 2010 2011 2012 2013E consolidate central reservation systems call center efficiency 9 EXCHANGE AND RENTALS Extending the Lead Rentals Strengths Exchange Strengths Adjusted EBITDA • Leading vacation rental facilitator • Leading timeshare exchange network • Access to approx.1060,000 rental properties • Approximately 3.7 million $308M members $293M • Approx.1.4 million transactions completed during 2012 $355M - $370M $348M $340M1 • Over 4,000 vacation ownership resorts in approximately 100 countries Strategic Priorities • Expand into new geographic markets – grow organically and through targeted M&A • Leverage web technology investments – enhance online experience & reduce costs 2009 2010 2011 2012 2013E • Drive revenue and customer retention – develop compelling products and services (1) Adjusted EBITDA decrease primarily due to currency ($17M) 10 VACATION OWNERSHIP A Transformed Business Strengths • World’s largest vacation ownership business – 190 resorts and approx. 915,000 owners • Leading innovator • Property management and consumer finance have fee-for-service components Adjusted EBITDA $595M - $620M $514M $423M $552M $440M Strategic Priorities • Drive further cash flow improvements – develop “Just-in-Time” and asset-lite inventory models (WAAM) • Drive greater sales and marketing efficiencies • Deliver better service to owners to enable greater owner satisfaction 2009 2010 2011 2012 2013E 11 VACATION OWNERSHIP A Closer Look Recurring upgrade sales • 50% of existing owners Flexible points based product • Allows remote market sales Recurring income • Property management fees = $63M EBITDA(1) Recurring interest income • Financing receivables Accounting transparency • Clean business model 1) For full year 2012 12 Agenda Three solid platforms Strong execution Delivers dependable growth 13 Strong Record of Execution – Key Initiatives 1 Vacation Ownership transformed 2 Leverage web to improve margins of Vacation Exchange 3 Grow Vacation Rentals business 4 Strengthen Hotel Group value proposition 5 Strong balance sheet and financial position Delivered strong cash flow and 2012 EPS growth of 34% 14 Vacation Ownership Transformed Major Actions Major Benefits Right-sized the business Margin increased from 16% to 24% Tightened consumer lending practices Average FICO scores(1) increased to 725 Developed WAAM concept Inventory spend reduced from nearly $700M to approx. $125M (1) Weighted Average FICO of Portfolio (at origination) 15 VACATION OWNERSHIP – A CLOSER LOOK Fee-for-Service Vacation Ownership Model Gaining Traction Wyndham Asset Affiliation Model (WAAM) Affiliate with developers of unsold properties Traditional Vacation Ownership Model Invest in development of resort properties Advantages Reduces capital intensity Increases recurring management fees Improves returns 16 Leverage Web to Improve Margins of Vacation Exchange Key Actions • Enhanced search • Improved Exchange value transparency • Improved resort photography and videos • Better websites for club affiliates Web Penetration(1) 46% 13% 2008 2012 ~250 bps of segment margin improvement (1) As of December 31, 2012 17 Grow Vacation Rentals Business U.S. Market • $24B of annual revenue in the U.S. large highly fragmented – $14B rent-by-owner market – $10B professionally managed market • 5,000 professional managers have an average of ~110 units in the U.S. • Just 10% of US adults have stayed Market is under-penetrated under-penetrated in a rental over the past 10 years 18 Strengthen Hotel Group Value Proposition Build value proposition through Apollo Revamp Websites • Drive direct channel bookings • Improve conversion increases of 10% to 60% Enhance Content Improve Rate Integrity • Overhaul information and images of 7,000 properties • Better manage rates and inventory • Improve search engine results • Enhance property management system synergies 19 Strong Balance Sheet and Financial Position Annual sustainable free cash flow target $750 million Well stacked capital deck – no near-term maturities Investment grade ratings from three major rating agencies Cost-efficient commercial paper program 20 Agenda Three solid platforms Strong execution Delivers dependable growth 21 Segment Long-term Growth Dynamics Hotel Group • Continued RevPAR recovery • Apollo • International expansion High-single digit growth Exchange & Rentals Vacation Ownership • Migration to web for Exchange business • WAAM / Just in Time • U.S. penetration in rentals • Credit Pre-screening Program • Voyager benefits Mid-single digit growth Mid-single digit growth Organic EBITDA growth of 6-8% 22 Our Cash Flow will Enhance Strong, Sustainable Growth 17-21%* Share Repurchase and M&A 6-8% EBITDA of Base Business * 2010-2015 Company EPS Growth 23 Disciplined Capital Deployment Drive Shareholder Value Disciplined Capital Deployment of ~$1B Annually Free Cash Flow: $750M target Maintain existing leverage: $100M EBITDA = $300M of debt Dividends Share Repurchase Targeted M&A Investment Currently ~$162M annually ~32% of adj. net income(1) $623M in 2012 Focus on fee-for-service businesses and tuck-in acquisitions 1) Based on guidance as of October 23, 2013 24 Clear Evidence Our Business Model is Working Adjusted EBITDA Adjusted EPS $3.78 - $3.80(2) $1,140M - $1,165M $3.23 $1,054M $976M +12% $2.49 +8% +10% +30% $860M +13% $2.00 +25% 2010 2011 (1) Based on guidance as of October 23, 2013 2012 (1) 2013e 2010 (2) Includes share repurchases through September 30, 2012 2011 2012 (1) 2013e 25 Market Still Catching Up with Wyndham’s New Performance Profile Free Cash Flow Yield WYN Peer Average 9.1% 5.4% 2013 Enterprise Value / EBITDA Peer Average WYN 11.9x 9.4x Note: WYN FCF yield based on target of $750M estimate & peer FCF calculated from recent publications. Price & shares outstanding as of 6/30/13, cash & debt as of June 30, 2013. 26 IN SUMMARY Powerful Cash Flow Drives Dependable Growth Execution Solid Platforms Growth Strong record of execution Building on three solid platforms Delivering dependable growth • Transformed Vacation Ownership business model • Extending lead of all platforms • Using free cash flow for targeted growth • ~$750M annual sustainable free cash flow target • Continuing to optimize operations • Targeting 17-21% EPS growth 27 Investor contact: Margo C. Happer Senior Vice President, Investor Relations Wyndham Worldwide Corporation (973) 753-6472 margo.happer@wyn.com