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International Treasury Transformation Overview

Frank Sassano Prashant PatriSenior Director – Treasury Operations Senior Manager, Treasury AdvisoryWyndham Worldwide Deloitte & Touche LLP

May 29th, 2014

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Table of Contents

Section Page #

Wyndham Worldwide Corporation: Company Overview 3

Pre-Transformation Challenges 6

Future State Objectives 7

In-House Bank Capabilities 8

Global Cash Pooling 9

FX Risk Management 11

Intercompany Netting & Settlements 13

Implementation Plan & Considerations 14

Summary of Benefits Realized 15

Key Take-Aways and Lessons Learned 16

Q&A 17

Deloitte & Touche Treasury Advisory: Practice Overview 18

3

Exchange & Rentals

Vacation Ownership

HotelGroup

Wyndham Worldwide CorporationThree Business Units

4

MajorBrands Include

BusinessSegment

% of 2013Adjusted EBITDA

Market PositionWorldwide

Hotel Group#1

Hotel franchisorby hotels

23%

Exchange & Rentals #1Timeshare

exchange and rentalcompany

28%

Vacation Ownership#1

Timesharedeveloper

49%

Wyndham Worldwide CorporationIndustry Leadership

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Wyndham Worldwide CorporateTreasury Overview

3 Treasury Centers& Key Finance Offices

25 Relationship Banks(15 with cash mgt)

1,100 Bank Accounts across 90 Banks

80-90% International vs. Domestic Cash

Parsippany, NJNorth America & CorporateTreasury & Risk Management12 employees

London, UKRegional Center EMEAI Treasury3 employees

Montevideo, UruguayRegional Center Latam Treasury4 employees

Las VegasUSA

Mexico CityMexico

Singapore

Key Finance Offices

Corporate & Regional Treasury Centers

QueenslandAustralia

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Wyndham International Treasury Transformation Pre-transformation Challenges

q Wyndham’s international treasury operations were not optimized or integrated since spin-off from Cendant

q Cash structure provided limited visibility and access to overseas liquidity

§ Bi-weekly liquidity visibility to 6 – 8 Wyndham’s foreign legal entities and with limited or no automation

§ Inability to deploy available cash balances across pool participants

q Tax structure challenges relative to substance requirements

q FX risk management practices were fragmented, non-automated, and not transparent, resulting in greater cost and increased systemic risk to Wyndham

§ Exposure gathering and tracking systems and accounting processes were not standardized or robust, resulting in operational inefficiencies and unexpected P&L volatility

§ Performance reporting was non-existent

q Lack of consistent intercompany netting/settlement processes resulted in

§ Ad-hoc decisions to net and settle payables, lacking a structured approach

§ Significantly manual record keeping, introducing risk of errors

§ Higher volume of FX transactions for settling intercompany payables and receivables

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Wyndham International Treasury TransformationFuture State Objectives

Key objectives of the international treasury transformation initiative include:

q Optimization of visibility to and control of cash balances across Wyndham’s global entities

§ Access to incremental liquidity from existing balances via “pull” system, generating annual interest savings

§ For restricted entities with “trapped” cash, utilize interest optimization yielding enhanced earnings credit

q Coordinating treasury restructuring initiatives with ongoing tax planning and restructuring efforts to optimize operations and mitigate potential tax exposures

q Creation of an in-house bank (IHB) structure to focus on optimization and integration of Wyndham’s international treasury operations inclusive of cash management, netting and FX processes

q Centralization, standardization and automation of FX exposure gathering and transaction execution processes to enhance the level of control and reduce risk to the Company

§ Generate cost efficiencies in FX transaction execution through minimizing number of external transactions

§ Implement regular FX hedge program performance reporting through FX Scorecard.

q Leveraging Treasury technology to enhance visibility and control and streamline workflow

q Automation and streamlining of intercompany netting and settlement processes to generate operational efficiencies and enhance level of control

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In-house Bank Capabilities

Capabilities provided by an IHB structure were identified to help Wyndham achieve many of the future state objectives outlined above

Global Cash Pooling

§ Improved visibility and enhanced control over cash (“pull” system)§ Reduced resources

required for FX management and execution if multi-currency notional pool is used§ Efficiencies gained as a

result of ability to manage liquidity centrally and leveraging TMS.

Continuous Improvement

Global NettingCentralized FXPayments

Factory (Out of Scope)

CollectionsFactory

(Out of Scope)§ Centralized cash

receipts and application, netting of 3rd party payments and receipts§ Lower idle cash as

only the Collections Factory receives receipts§ Straight-through-

processing (STP) from invoicing to cash receipt

§ Consolidated payments to global vendors, enabling lower bank fees§ Lower idle cash as

only the Payment Factory needs to keep Liquidity§ Single bank payments

file and STP from payment to accounting and bank reconciliation

§ Improved efficiency in risk mitigation due to centralization§ Lower transaction

costs due to reduced volume of transactions§ Lower costs of

compliance§ Improved

management and exposure reporting

§ Reduction in banking fees and FX cost as the result of fewer transactions§ Automated

accounting eliminates manual processes§ Increased efficiency

through automated Intercompany process§ Increased control of

intercompany processes and reduction of LT risk

Approach: Implement Global Cash Pooling, Intercompany Netting and Centralized FX functions as part of IHB. Payment and collections factory implementations would be considered in the future potentially aligning with shared services strategy.

In-House Bank (Full Service)

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Global Cash PoolingPre-Transformation & Current State Overview

Considerations Pre-Transformation

Liquidity Visibility

• Visibility to cash balances limited to only 6 - 8 entities and only twice per week through manual process

• Monthly visibility only to other entities’ cash balances as part of monthly reporting process

Information Flow

• Visibility to US legal entity balances available through Kyriba

• Foreign entity process of getting visibility to cash is Excel based and manually intensive

Access to Liquidity

• Access to cash balances limited to only 6 - 8 entities and only twice per week through manual process

• Access to other entities’ cash balances is ad-hoc as part of monthly reporting process

Automation to Access Liquidity

• Non-existent, push structure with heavy field interaction

Operating Model • Hands-on and ad hoc interaction between Corporate Treasury, Regional Treasury, and Field

Bank Account Infrastructure

• Carried forward legacy bank accounts, which are redundant in the consolidated/combined organization

Overlay Structure • Manual cash concentration structure

Current State

• Enhanced roll-out of technology platform to enable real time visibility for all pool participants

• Real time visibility to more entities’ cash balances as part of daily Kyriba reporting process

• EMEAI, IHB and Latam Treasury live on Kyriba• Automated through Kyriba cash module• Access to all legal entities in scope for the global

cash pooling project

• Real time access to liquidity of the legal entities in scope for the global cash pool

• Access to incremental liquidity is generating substantial annual savings as compared to Wyndham’s cost of funds

• Optimized use of Kyriba and SWIFT network for daily settlement of the legal entities and the respective banks in scope for inclusion in the pool

• Enhanced operating model structure with defined responsibilities for Corporate and Regional Treasury, and legal entities supported by Corporate and Regional Treasury

• Streamlined bank account structure by country and rationalization of accounts identified as redundant

• Single entity multi-currency notional pool

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Global Cash PoolingOverlay Structure Recommendation

AUD

BBVARCI Latam SA (NY)RCI Mexico (NY)

USD

HSBCWHAP Co Ltd. (HK)

USDLandal GreenParks GmbH

EUR

Rabobank - Landal GreenParks Holding BV

EUR

Danske Nordic Pool

EUR NOK SEKDKK

Westpac/NAB/BOARCI Australia (AUS)

WVRAP (AUS)Wyn Lux Hldgs (Lux)

GBP EURUSD DKK NOK SEK CHFAUD

Wyn Overseas Operations Limited (USD) BOA

RCI SA Holdings (IOM)

GBP

RBS UK Pool*

EURGBP USD

WER UK H Treasury Header Accounts Novasol A/S

Automated Sweep (daily)

Manual or Kyriba Sweep (frequently)

Wyndham Worldwide Corporation (USD) BOA

WW Swiss GmbHIEV

CHF

• A notional pool overlay structure was identified to help Wyndham obtain a consolidated view of cash balances across all pool participants.

• Created a new IHB entity (Wyn Overseas Operations Limited, WOOL) with 20 participating entities. Currently existing underlying physical pooling structures will continue to consolidate in-country cash balances and sweep into respective WFC accounts.

Funding to the pool and repayment of funding

* In the future state some legal entities that are currently part of the UK pool will move to the US pool. Further detail is available in the appendix

BOAWyndham Global Finance

Plc

EUR

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FX Risk Management Pre-Transformation & Current State Overview

Considerations Pre-TransformationExposure Identification & Aggregation

Fragmented with lack of reliance on systems or best practices

Exposure Analytics Limited high level exposure review prior to hedge execution

Hedge Execution Centralized at corporate regardless of entity that has exposure with manual transaction capture into Reval

Business Visibility & Overall Governance of Risk Management Function

No monthly review of hedge strategy & policy not updated for current needs of the business

Performance Measurement and Reporting

Limited definition of policy goals and lack of routine performance reporting to key stakeholders. This is a key priority and needs to be addressed soonest (i.e. before the technology implementation)

Process Automation & Technology

No automated accounting or hedge effectiveness testing processes exist

Current StateFireapps automated BS exposure extract from main ERP systems (Oracle R12, Peoplesoft)

Exposure analysis performed in Fireapps and Reval by Treasury Operations before hedging decisions are made*

Automated FX workflow from pre-trade input, approval, execution and settlement using Reval and FXall.

Monthly FX Scorecard review with business unit Finance teams as part of FX Risk Management Program

Redefined FX Risk Management goals and creation of monthly FX Scorecard vs. defined metrics

Established automated links between hedge execution, Reval, and ERP GL modules**

NOTE: future state go live: *Q2 2014, **Q4 2014.

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Hedge Cost - (Loss)/Gain

Full YearHedge Cost - Budget (USD)

YTD Hedge Cost - Budget (USD)

YTD Hedge Cost - Actual (USD)

Variance(USD)

RCI Europe - DKK 7,032$ 1,758$ 1,621$ (137)$ RCI Europe - EUR (182,942)$ (45,735)$ (27,503)$ 18,232$ RCI Europe - NOK (14,178)$ (3,545)$ (5,040)$ (1,495)$ RCI Europe - SEK (10,391)$ (2,598)$ (2,064)$ 534$ RCI Europe - USD (4,100)$ (1,025)$ (1,138)$ (113)$ RCI Europe - ZAR (50,061)$ (12,515)$ (12,776)$ (261)$ RCI US Interco - ZAR (89,783)$ (22,446)$ (14,989)$ 7,456$ RCI US Royalties - ZAR (67,455)$ (16,864)$ (21,318)$ (4,454)$ RCI Brazil - USD (221,351)$ (55,338)$ (104,709)$ (49,371)$ RCI Chile -USD 107,319$ 26,830$ 9,522$ (17,307)$ RCI Colombia - USD 33,401$ 8,350$ (1,567)$ (9,918)$ RCI Mexico - USD 619,874$ 154,969$ 56,818$ (98,150)$ RCI Uruguay - UYU 29,363$ 7,341$ 8,890$ 1,550$ WWC (Novasol) - SEK 241,151.79$ 60,288$ 56,715$ (3,573)$ Novasol - GBP (4,293.00)$ (1,073)$ (11,545)$ (10,472)$ Total 393,587$ 98,397$ (69,083)$ (167,480)$

Balance Sheet Exposure Scorecard: BU: WER As of: 3/31/2014

Percentage HedgedActual 3/31

BS Exposure (FC)BS Hedge

as of 3/31 (FC) Actual Goal BandsRCI Europe - DKK 10,860,165 -6,286,735 58% 90-100% >90%, <110%RCI Europe - EUR -23,306,333 24,013,262 103% 90-100% =80-90%, =110-120%RCI Europe - NOK 12,712,469 -12,297,218 97% 90-100% <80%, >120%RCI Europe - SEK 15,863,638 -14,590,249 92% 90-100%RCI Europe - USD -1,342,252 1,395,441 104% 90-100%RCI Europe - ZAR 12,797,637 -10,405,124 81% 90-100%RCI US Interco - ZAR 10,713,461 -11,137,628 104% 90-100%RCI US Royalties - ZAR 20,622,393 -19,206,431 93% 90-100%RCI Brazil - USD -4,710,583 5,463,257 116% 90-100%RCI Chile -USD 3,197,874 -3,097,531 97% 90-100%RCI Colombia - USD 2,009,343 -1,801,016 90% 90-100%RCI Mexico - USD 11,203,926 -11,182,072 100% 90-100%RCI Uruguay - UYU -41,118,133 40,679,445 99% 90-100%WWC (Novasol) - SEK -136,145,071 137,035,290 101% 90-100%Novasol - GBP 8,009,618 -6,961,232 87% 90-100%

P&L Impact

Impact on Underlying

Exposure (LC)Impact on Hedge (LC)

Net Impact % of

Unhedged Net Impact BandsRCI Europe - DKK £1,478 -£626 42% £852 >90%, <110%RCI Europe - EUR -£51,036 £60,677 119% £9,640 =80-90%, =110-120%RCI Europe - NOK £9,193 -£8,662 94% £532 <80%, >120%RCI Europe - SEK -£6,713 £8,427 126% £1,715RCI Europe - USD -£4,151 £2,463 59% -£1,688RCI Europe - ZAR £15,187 -£14,879 98% £308

-£36,042 £47,401 £11,358

RCI US Interco 21,952$ (21,264)$ 97% 689$ RCI US Royalties 37,856$ (37,864)$ 100% (8)$ RCI Brazil 155,721$ (178,362)$ 115% (22,641)$ RCI Chile (53,112)$ 56,690$ 107% 3,578$ RCI Colombia (66,875)$ 70,145$ 105% 3,270$ RCI Mexico (155,951)$ 163,546$ 105% 7,595$ RCI Uruguay 5,588$ (29,806)$ 533% (24,218)$ WWC (Novasol) - SEK 146,008$ (153,050)$ 105% (7,042)$ Novasol - GBP (28,425)$ (6,194)$ -22% (34,620)$

91,187$ (129,965)$ (38,778)$

Monthly FX ScorecardBalance Sheet Exposure Review

Metric: % Cover – FX Policy Compliance

Metric: % Offset – Hedge Effectiveness

Metric: Hedge Cost v. Budget – Hedge Efficiency

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Intercompany Netting and SettlementsProcess Overview

Considerations Current State

Identification of IC Transactions to be Netted and Settled

Ad-hoc

Netting Calculations N/A

Settlement Outputs N/A

Accounting Outputs N/A

Technology andOperating Model N/A

Future State

Upload transaction data into Kyriba netting module

Performed by the netting center via Kyriba

Participants obtain final net position via Kyriba final netting settlement reports. Kyriba provides Consolidated Netting report to feed FX trading process as well as generate wires to participants owed by the netting.

Accounting entries provided either by third party netting solution or flow automatically from Reval into GL if netting process is performed in house

Perform input, settlement, and accounting functions via Kyriba Netting module required to perform end-to-end netting in house

The process for IC netting and settlement will be designed for all entities in scope for netting*, and the netting calculation process will leverage Kyriba’s Netting module. WOOL is expected to be the netting center entity.

*To be determined in coordination with Tax and Legal departments.

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International Treasury Transformation Milestone Plan – Phase 1 (IHB), Phase 2 (FX), Phase 3 (Netting)

7/1/14 8/15/14 10/1/14 12/31/14

KyribaBuild, 10/1

Collect Baseline Exposure Data & Metrics, 8/31

SOW & IC NetPolicy, 7/1

Pilot Scope, TaxReview, 8/1

CompleteDesign, 9/1

Pilot Test12/31

Global Rollout2015

ValidateStructure 12/15

IHB Policy1/31

Cash MgtDesign, 2/28

Open Accts/MCNP, 3/31

Dom. Struct.Changes, 5/30

Kyriba Build,/ Test 6/30

Live7/11/13

Structure Validation and Policy Design

Account Opening and Infrastructure Development

Execution/Go Live

Structure Validation and Policy Design

Business Buy-In and Process

RationalizationExecution/Go Live

New FX Policy, 1/31

CompleteDesign, 5/31

Testing8/31

Live1/1/14

FX Process

Reval / FXallBuild, 7/31

Structure Validation and Policy Design

Sr. Management Buy-In and Process Rationalization

Execution/Go Live

Netting

Cash

11/1/12 12/1/12 1/1/13 3/31/13 6/30/13 9/30/13

6 ∑ Mapping4/17-19

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Implementation Considerations

Resources:

§ Internal: Treasury, IT, Accounting, Tax, Legal, PMO, Lean Six Sigma Master Black Belt and Internal Audit

§ External: Banks, Vendors (Fireapps, Reval & Kyriba), Advisor (Deloitte & Touche Treasury Advisory)

Project Governance:

§ Capital Approval Request, Project Charter, Business Case

§ Lean Six Sigma Steering Committee Tollgate Reviews

Budget:§ Capitalized expenses: external and internal design & development hours§ Operating expenses: incremental Reval module & Fireapps, FXAll subscription fees net of

Treasury outsource and retired system savings§ Hardware: One virtual server (Reval/Fxall connector)

Wyndham Worldwide Corporation’s International Treasury Transformation has been successful due to a disciplined implementation approach that brought together cross-functional internal and external resources that executed the project under a strong governance structure

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Summary of Benefits Realized

Key benefits realized to date from phases 1 & 2 of the implementations include:

Phase 1 – New IHB and Cash Overlay Structure:§ Cost Savings: $1.03M FX hedge cost p.a., net $580K interest savings = $1.6M total uplift.

§ Productivity Gains: Cost of additional EMEAI Treasury Analyst more than offset by Operating Expense savings from eliminating prior IHB outsource Treasury admin fees.

§ Process Efficiencies: Dynamic daily liquidity “pull” solution replaces twice weekly “push” system.

§ Yield Enhancement: New cash overlay released 10M of previously untapped liquidity, and working with Corporate Tax developed further means to access quarter end excess liquidity.

Phase 2 – FX Risk Management Process Redesign:§ Cost Savings: FX Scorecard feedback loop and Fireapps implementation exposure reviews resulted in finding

unhedged and incorrect exposures, thus reducing P/L volatility.

§ Productivity Gains: Targeted 25% reduction in time spent on transaction processing, elimination of IHB outsourcer trades (342 p.a.), reduced monthly accounting and reporting burden.

§ Process Efficiencies: Paperless workflow from hedge input through approval, execution and settlement results in significant time savings and refocus toward analysis.

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Key Take-Aways and Lessons Learned

§ Adopted a Six Sigma approach with focus on transforming processes and using systems as enablers of process change

§ Phased approach to manage scope and resource intensity – implementation would be too intensive without phasing (and sub-phasing) into logical “chunks”.

§ Buy-in from international and business units is critical; participation from dependent functional teams is mandatory (e.g. IT, Finance and Accounting).

§ Tone at the top – Upfront approval and ongoing involvement from cross-functional executive team (Six Sigma Steering Committee).

§ Require detailed SOW up front from every vendor.

§ Software as a Service (SaaS) is low IT intensity, however, regular upgrades sometimes create uncertainty in the process. Watch out for vendors who upgrade frequently, results in increased “freeze” periods.

§ Require SaaS vendors to supply a test environments to avoid testing in production.

§ Test, test and re-test! Several iterations of our straight through processing connectivity.

§ Check bilateral agreements and feeder bank SWIFT capabilities up front – every bank is different

§ If using part-time internal project resources, be prepared for longer roll-out timelines.

§ Utilize and leverage internal PMO’s if available.

§ Allow for extra time in your plan for vendor negotiations and bank documentation (KYC’s).

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Q&A

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