�Coming on the heels of a strong first quarter, we have delivered a record second quarter that exceeded the highest Street expectations.  This confirms the on-target effectiveness of the business plan we implemented last year and the team that leads this company,� said Fred J. Kleisner, president and chief executive officer. �Our plan is working.  We saw improvement in RevPAR across our portfolio. Occupancy was at the highest level in company history at 77.2%.  EBITDA growth more than doubled our revenue pace.  We also strengthened our balance sheet through the sale of non-strategic assets and the reduction of debt.�

Actual earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, was $182.4 million.  This exceeds the highest Street estimate by $2.3 million and, with 65 fewer hotels, represents a 10.3% increase over the prior year actual earnings of  $165.4 million.

On a pro forma basis, which reflects the spin-off of Interstate and other completed asset dispositions, EBITDA, as adjusted, increased 15.3% to $177.3 million in the second quarter of 2000 from $153.8 million in 1999.  Revenues in the second quarter increased 11.2% to $652.3 million, from $586.6 million in 1999. 

For the second quarter, on a pro forma basis, the company reported a net loss of $49 million, or $0.45 per share (diluted), compared with a loss of $856.4 million, or $5.30 per share (diluted),  in the second quarter 1999.  The 2000 results were impacted by a non-recurring, non-cash charge of $45.4 million, net of taxes, reflecting a write-down of certain non-strategic assets currently being held for sale as part of Wyndham�s strategy to focus on its core proprietary brands.  The loss in 1999 largely reflected one-time costs associated with the company�s recapitalization and restructuring. 
Reflecting its focus on becoming a branded hotel operating company, Wyndham sold $140 million of non-strategic assets in the quarter.  The sale of assets, along with operational cash flow, enabled the company to strengthen its balance sheet by reducing debt by $160 million in the quarter while cash remained constant.

Solid Operating Performance

Among its core proprietary branded products, the company�s second quarter results were paced by the solid performance of Wyndham Luxury Resorts and Summerfield Suites by Wyndham. Wyndham Luxury Resorts posted a significant RevPAR gain of 10.0%, while Summerfield Suites by Wyndham gained 7.7%. Wyndham Hotels & Resorts, which includes the company�s Florida and Caribbean resorts, posted a 5.5% RevPAR increase.

�The company�s RevPAR strength was led by our products that were added to the company�s brand and distribution system this quarter.  Both Wyndham Luxury Resorts and Summerfield Suites by Wyndham benefited from the company�s sales, marketing and reservations systems, as well as the relocation of their headquarters to Dallas,� said Ted Teng, chief operating officer.

RevPAR from three new Wyndham flagship hotels in Boston, New Orleans and Chicago greatly exceeded internal projections.  These hotels joined the Wyndham portfolio in the second half of 1999 and, as a result, are not included in the second quarter comparable results.

�As we look at our current Wyndham-branded portfolio, we see the important revenue opportunities in major metropolitan markets,� said Teng.  �As our new upper upscale properties in Boston, Chicago and New Orleans develop a higher market profile and as we continue to upgrade many of our larger suburban Garden properties into Wyndham Hotels, we believe we can continue to generate increases in both average daily rate and occupancy. 

�We remain focused on securing other key urban markets.  We recently signed a 20-year extension of our management agreement for the Wyndham Anatole, our Dallas flagship, which further enhances our brand and provides us with a financial return that significantly exceeds our investment hurdles,� Teng continued.  �We continue to pursue plans for renovating and branding existing hotels in Honolulu, San Francisco and other markets.�

Among comparable owned and leased hotels, EBITDA, as adjusted, for the total portfolio increased 12.1% on RevPAR growth of 5.7%.  Core proprietary Wyndham-branded hotels registered a 16.7% EBITDA gain on a 5.4% RevPAR increase, reflecting a gross operating profit margin improvement of 220 basis points to 38.7%.  Same store non-proprietary branded hotels posted a 7.4% EBITDA gain, while RevPAR increased 6.1 % over the prior year.  Within the non-proprietary portfolio, properties managed by Wyndham registered a 12.7% EBITDA gain on a 7.0% RevPAR increase, while properties managed by third parties had a 4.6% EBITDA increase on a 5.7% RevPAR increase. Wyndham continues to work with third-party managers to improve performance on company-owned properties. 

During the quarter, Wyndham reduced its ongoing SG&A expenses to $19.4 million,  compared with $26.6 million on a pro forma basis in the second quarter 1999. 
�Our continuing focus is to improve revenue and margins, reduce corporate overhead and simplify our business focus.  By adhering to the fundamentals of our strategic plan, we were able to report excellent EBITDA and revenue growth in the quarter,� Kleisner said.

Asset Sales

Reflecting its strategy to dispose of non-strategic real estate and improve its balance sheet, Wyndham completed nearly $240 million in asset sales through June 30, 2000, putting the company on track to exceed its planned $300 million in asset sales this year. Proceeds are being used primarily to reduce debt, as well as to enhance the core proprietary brands. Among the assets sold during the quarter was a portfolio that included the Clubhouse Inn brand. The company also sold three non-proprietary branded assets during the quarter. 
 

This press release contains certain forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including projections about future operating results.