Stephen P. Holmes

Thanks, Margo, and good morning, everyone. I'm pleased to report we had another great quarter as we continue to execute at a high level in an uncertain global economic environment. Second quarter revenues increased by over 4% and adjusted EBITDA was up over 10%. Adjusted EPS was up 36% and came in $0.02 above the top end of our guidance range.

Wyndham Hotel Group and Wyndham Vacation Ownership each delivered double-digit EBITDA growth. I'm also pleased with the efforts of our Wyndham Exchange and Rental teams, which was in line with our expectations, producing stable results despite the economic challenges in Europe and limited growth in the broader timeshare industry.

We continue to deploy capital to drive value for our shareholders. So far this year, we've spent nearly $70 million [ph] on dividends and $400 million on share repurchases. Our second quarter weighted average diluted share count decreased by $23 million from the same period last year. From our inception as a private company on August 1, 2006 through yesterday, we repurchased 73.8 million shares at an average price of $32.60 per share.

Equally important for long-term shareholder value is our ongoing commitment to invest in our business to drive earnings growth and increased cash flow in the years to come. Our baseline sustainable free cash flow guidance of $600 million to $700 million assumes CapEx of approximately $200 million, about half of which is used to fund growth projects such as Apollo and our hotel business; rci.com and Vacation Rentals reservation and website integration in our Exchange and Rental business; and Voyager, a program to optimize our reservation system in our Vacation Ownership business. We also continued to selectively evaluate the potential acquisitions, which we will only pursue if they're strategically and economically compelling.

Now moving to our business unit review. The Wyndham Hotel Group had another great quarter, with adjusted EBITDA growth of 12% and domestic RevPAR gains of nearly 8%. We made some significant development headway in the second quarter, many a [ph] deal with Hospitality Properties Trust or HPT, a 20-hotel portfolio comprising 3,000 rooms throughout the U.S. All of the properties will be rebranded as Wyndham Hotels, with the remaining 16 properties to be rebranded Hawthorn Suites. The conversions are scheduled to occur next week, providing growth for 2 of our brands and adding 20 properties to our managed portfolio. We are pleased to partner with HPT and hope to work more closely with them in the years to come. We look forward to updating you on similar deals going forward.

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