United States
                                        SECURITIES AND EXCHANGE COMMISSION
                                               Washington, DC 20549

                                                     FORM 10-Q


     [X]  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
Exchange Act of 1934

     For the quarterly period ended June 30, 1999

     [ ]  Transition  report  pursuant to Section 13 or 15(d) of the  Securities
Exchange  Act  of  1934  for  the  transition   period  from   ____________   to
______________


Commission file number 000-22979

                             Trendwest Resorts, inc.
             (Exact name of registrant as specified in its charter)


               Oregon                                 93-1004403
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
           incorporation)

                               9805 Willows Road
                           Redmond, Washington 98052
              (Address of principal executive offices) (Zip Code)


(Registrant's telephone number, including area code)       (425) 498-2500


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve months (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

The number of shares of the registrant's  no-par voting common stock outstanding
as of August 5, 1999: 17,129,026 shares.


<PAGE>

PART I - FINANCIAL INFORMATION

Item I - Financial Statements

                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets

                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                                       June 30,          December 31,
                                   Assets                                                1999                1998
                                                                                   -----------------    ----------------
                                                                                  (Unaudited)
<S>                                                                            <C>                         <C>
Assets:
     Cash                                                                      $             9                   9
     Restricted cash                                                                     3,153               2,351
     Notes Receivable, net of allowance for doubtful accounts, sales
        returns and deferred gross profit                                               94,328              93,361
     Accrued interest and other receivables                                             12,420              11,399
     Residual interest in Notes Receivable sold                                         28,457              23,683
     Receivable from Parent                                                                891                  --
     Inventories                                                                        44,057              42,309
     Property and equipment, net                                                        20,311              20,343
     Deferred income taxes                                                                 464                 702
     Other assets                                                                        3,010               4,341
                                                                                   -----------------    ----------------

                     Total assets                                              $       207,100             198,498
                                                                                   =================    ================


                    Liabilities and Shareholders' Equity

Liabilities:
     Accounts payable                                                                    5,669               1,436
     Accrued liabilities                                                                 9,108               6,645
     Accrued construction in progress                                                      619               1,064
     Borrowing under bank line of credit                                                20,000              30,000
     Due to Parent                                                                          --               5,688
     Allowance for recourse liability and deferred gross profit on Notes
        Receivable sold                                                                 11,847              11,250
     Income taxes payable                                                                1,471               1,153
                                                                                   -----------------    ----------------

                     Total liabilities                                                  48,714              57,236

Shareholders' equity:
     Preferred stock, no par value.  Authorized 10,000,000 shares;
        no shares issued or outstanding                                                     --                   --
     Common stock, no par value.  Authorized 90,000,000 shares;
        issued and outstanding 17,129,026 and 17,158,766 shares at June 30,
        1999 and December 31, 1998, respectively                                        61,318              61,848
     Retained earnings                                                                  97,068              79,414
                                                                                   -----------------    ----------------

                     Total shareholders' equity                                        158,386             141,262

Commitments and contingencies

                     Total liabilities and shareholders' equity                $       207,100             198,498
                                                                                   =================    ================
</TABLE>

See accompanying notes to the condensed consolidated financial statements.


<PAGE>


                             TRENDWEST RESORTS, INC
                                AND SUBSIDIARIES

                   Condensed Consolidated Statements of Income

                  (dollars in thousands, except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                 Three months ended                   Six months ended
                                                                      June 30,                            June 30,
                                                         -----------------------------------  ----------------------------------
                                                              1999               1998              1999              1998
                                                         ----------------  -----------------  ---------------   ----------------

<S>                                                    <C>                    <C>                <C>                 <C>
Revenues:
     Vacation Credit and Fractional Interest sales,
     net                                               $        63,426             41,988          112,442             76,873
     Finance income                                              3,338              3,101            7,289              6,300
     Gains on sales of Notes Receivable                          4,793              1,537            9,143              5,135
     Resort management services                                    953                367            1,775                995
     Other                                                         785              1,000            2,550              1,519
                                                         ----------------  -----------------  ---------------   ----------------

             Total revenues                                     73,295             47,993          133,199             90,822
                                                         ----------------  -----------------  ---------------   ----------------

Costs and operating expenses:
     Vacation Credit and Fractional Interest cost of
        sales                                                   20,482             11,169           34,103             20,682
     Resort management services                                    421                322              818                599
     Sales and marketing                                        26,664             21,022           50,162             38,658
     General and administrative                                  5,853              4,281           11,245              8,069
     Provision for doubtful accounts and recourse
        liability                                                4,377              2,919            7,820              5,315
     Interest                                                       53                  2              109                 38
                                                         ----------------  -----------------  ---------------   ----------------

             Total costs and operating expenses                 57,850             39,715          104,257             73,361
                                                         ----------------  -----------------  ---------------   ----------------


             Income before income taxes                         15,445              8,278           28,942             17,461

Income tax expense                                               5,935              3,114           11,288              6,433
                                                         ----------------  -----------------  ---------------   ----------------

             Net income                                $         9,510              5,164           17,654             11,028
                                                         ================  =================  ===============   ================

Basic net income per common share                      $           .55                .29             1.03                .63

Diluted net income per common share                    $           .55                .29             1.03                .63

Weighted  average  shares of common  stock and
dilutive  potential  common stock outstanding:

     Basic                                                  17,140,051         17,593,366       17,149,358         17,593,366

     Diluted                                                17,186,588         17,593,366       17,185,054         17,593,366

</TABLE>

See accompanying notes to the condensed consolidated financial statements.



<PAGE>

                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

                             (dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          Six months ended June 30,
                                                                                 --------------------------------------------
                                                                                        1999                    1998
                                                                                 -------------------     --------------------
<S>                                                                          <C>                               <C>
Cash flows from operating activities:
     Net income                                                              $          17,654                   11,028
     Adjustments to reconcile net income to net cash provided by
        operating activities:
        Depreciation and amortization                                                      750                      474
        Gain on sale of property and equipment                                            (886)                      --
        Amortization of residual interest in Notes Receivable sold                       4,670                    3,108
        Provision for doubtful accounts, sales returns and recourse
           liability                                                                    10,744                    7,061
        Recoveries of Notes Receivable charged off                                         134                       98
        Residual interest in Notes Receivables sold                                     (9,473)                  (6,160)
        Unrealized loss (gain) on residual interest in Notes Receivable
           sold                                                                            874                     (399)
        Change in deferred gross profit                                                    (10)                    (510)
        Deferred income tax expense (benefit)                                              238                     (166)
        Issuance of Notes Receivable                                                   (95,810)                 (67,104)
        Proceeds from sale of Notes Receivable                                          66,022                   55,643
        Proceeds from repayment of Notes Receivable                                     21,975                   13,924
        Purchase of Notes Receivable                                                    (4,270)                  (7,477)
        Changes in certain assets and liabilities:
              Restricted cash                                                             (802)                    (339)
              Inventories                                                               (1,748)                     681
              Accounts payable and accrued liabilities                                   2,594                   (3,824)
              Income taxes payable to Parent                                                --                   (2,755)
              Income taxes payable                                                         318                     (429)
              Other                                                                        244                      202
                                                                                 -------------------     --------------------

          Net cash provided by operating activities                                     13,218                    3,056
                                                                                 -------------------     --------------------

Cash flows from investing activities:
     Purchase of property and equipment                                                 (4,178)                  (3,818)
     Proceeds from sale of property and equipment                                        4,412                        --
                                                                                 -------------------     --------------------

          Net cash provided by (used in) investing activities                              234                   (3,818)
                                                                                 -------------------     --------------------

Cash flows from financing activities:
     Net (repayment) borrowings under bank line of credit and other                     (6,343)                   4,000
     Increase in Receivable from Parent                                                   (891)                    (123)
     Decrease in Due to Parent                                                          (5,688)                  (1,947)
     Repurchase of common stock                                                           (530)                      --
                                                                                 -------------------     --------------------

          Net cash (used in) provided by financing activities                          (13,452)                   1,930
                                                                                 -------------------     --------------------

          Net increase (decrease) in cash                                                    --                    1,168

Cash at beginning of period                                                                  9                       70
                                                                                 -------------------     --------------------

Cash at end of period                                                        $               9                    1,238
                                                                                 ===================     ====================
</TABLE>

See accompanying notes to the condensed consolidated financial statements.


<PAGE>
                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (continued)
                             (dollars in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                            Six month ended June 30,
                                                                                 -----------------------------------------------
                                                                                        1999                      1998
                                                                                 --------------------     ----------------------
<S>                                                                               <C>                              <C>
Supplemental  disclosures of cash flow  information  cash paid during the period
     for:
        Interest (excluding capitalized amounts of $715 and $238,
          respectively)                                                           $         146                         27
        Income taxes                                                                     10,732                      9,783
</TABLE>

See accompanying notes to the condensed consolidated financial statements.



<PAGE>
                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES
            Notes to the Condensed Consolidated Financial Statements
                 (dollars in thousands except per share amounts)
                                   (Unaudited)

Note 1 - Background

Trendwest  Resorts,  Inc.  (Company)  markets,   sells  and  finances  timeshare
ownership  interests  in the  form  of  perpetual  timeshare  credits  (Vacation
Credits) in WorldMark, the Club (WorldMark) and Fractional Interests in vacation
properties.  Vacation  Credits are created  through the transfer to WorldMark of
resort units acquired or developed by the Company.  The Company derives revenues
primarily from Vacation  Credit and  Fractional  Interest sales and, to a lesser
extent,  from the financing of Vacation Credit and Fractional Interest sales and
from its management agreement with WorldMark.

These  condensed  consolidated  financial  statements  do  not  include  certain
information and footnotes required by generally accepted  accounting  principles
for complete financial  statements.  However, in the opinion of management,  all
adjustments  considered necessary for a fair presentation have been included and
are of a normal recurring nature. Operating results for the three months and six
months ended June 30, 1999 are not  necessarily  indicative  of the results that
may be expected for the fiscal year ending December 31, 1999.

These  statements  should  be read in  conjunction  with the  audited  financial
statements and footnotes included in the Company's 1998 Form 10-K filed with the
Securities  and Exchange  Commission  (SEC).  The  accounting  policies  used in
preparing  these  financial  statements are the same as those  described in such
Form 10-K.

Note 2 - New Accounting Pronouncements

In April,  1998, the Accounting  Standards  Executive  Committee of the American
Institute of Certified Public  Accountants  (AICPA) issued Statement of Position
(SOP)  98-5,  Reporting  on the  Costs  of  Start-Up  Activities.  This  SOP was
effective  on January 1, 1999,  and has not  impacted  the  Company's  financial
position or results of operations.

In June,  1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  This Statement is effective as of the beginning of the
first quarter of the fiscal year beginning after June 15, 2000. The Company does
not  anticipate  a  material  impact on its  financial  position  or  results of
operations from the future adoption of this standard.

Note 3 - Financing Transactions

On April 15, 1999, the Company created a  wholly-owned,  special purpose finance
company,  TW Holdings II, Inc. At the same time, the Company  entered into a $75
million,  364-day  Receivables  Warehouse  facility  (Facility)  with Prudential
Securities Credit Corporation. The Facility has an advance rate of 90% and has a
required yield of LIBOR plus 100 basis points.

On June 17, 1999,  the Company chose not to renew the  revolving  portion of the
$98 million  Receivable  Transfer  Agreement  from the Bank  Group.  The Company
expects  to  be  able  to  transfer  the  TW  Holdings   receivables  to  a  new
special-purpose  entity  in  conjunction  with  a  private  placement  of  Notes
Receivable in August of 1999 and retire the credit facility.


<PAGE>

Note 4 - Basic and Diluted Net Income Per Common Share

The following illustrates the reconciliation of weighted average shares used for
basic and diluted net income per share:

<TABLE>
<CAPTION>
                                                    Three months ended                       Six months ended
                                                         June 30,                                June 30,
                                             ----------------------------------     ------------------------------------
                                                  1999               1998                1999                 1998
                                             ----------------    --------------     ---------------      ---------------
<S>                                             <C>                <C>                <C>                  <C>
Basic
Weighted average shares outstanding             17,140,051         17,593,366          17,149,358           17,593,366

Diluted
Effect of dilutive securities                       46,537                 --              35,696                  --
                                             ----------------   ---------------      --------------      ---------------
Diluted weighted average shares outstanding     17,186,588          17,593,366         17,185,054           17,593,366
                                             ================    ==============     ===============      ===============
</TABLE>

Net income  available to common  shareholders for basic net income per share was
$9,510 and $5,164 for the three months ended June 30, 1999 and 1998, and $17,654
and $11,028 for the six months ended June 30, 1999 and 1998, respectively.

At June 30, 1999 and 1998,  there were  options to purchase  481,540 and 492,000
shares of common stock, outstanding,  respectively, which were anti-dilutive and
therefore  not  included  in the  computation  of diluted  net income per common
share.

Note 5 - Inventories

Inventories consist of Vacation Credits,  Fractional  Interests and construction
in progress as follows:
<TABLE>
<CAPTION>
                                                                             June 30,            December 31,
                                                                               1999                  1998
                                                                         -----------------     ------------------
         <S>                                                        <C>                        <C>
         Vacation Credits                                           $           3,467                11,342
         Fractional Interests                                                   2,998                    --
         Construction in progress                                              37,592                30,967
                                                                         -----------------     ------------------

                  Total inventories                                 $          44,057                42,309
                                                                         =================     ==================
</TABLE>


<PAGE>




Note 6 - Allowance For Doubtful Accounts, Recourse Liability and Sales Returns

The activity in the  allowance  for doubtful  accounts,  recourse  liability and
sales returns is as follows for the six months ended June 30, 1999, and the year
ended December 31, 1998:

<TABLE>
<CAPTION>
                                                                               1999                  1998
                                                                         -----------------     ------------------
         <S>                                                        <C>                          <C>
         Balances at beginning of period                            $          20,935                15,240

         Provision for doubtful accounts, sales returns and
             recourse liability                                                10,744                15,435
         Notes receivable charged-off and sales returns net of
             Vacation Credits recovered                                        (6,795)               (9,919)
         Recoveries                                                               134                   179
                                                                         -----------------     ------------------

         Balances at end of period                                  $          25,018                20,935
                                                                         =================     ==================


         Allowance for doubtful accounts and sales returns          $          15,771                12,363
         Recourse liability on notes receivable sold                            9,247                 8,572
                                                                         -----------------     ------------------
                                                                    $          25,018                20,935
                                                                         =================     ==================
</TABLE>

Total notes receivable  outstanding,  including notes  receivable  sold,
amounted to $348,283 and $307,740 at June 30, 1999 and December 31, 1998,
respectively.

Note 7 - Commitments and Contingencies

(a) Purchase Commitments
The Company routinely enters into purchase agreements with various developers to
acquire  and  build  resort  properties.  At  June  30,  1999  the  Company  had
outstanding  purchase  commitments of $47.7 million related to properties  under
development.

(b) Litigation
The Company is involved in various claims and lawsuits arising from the ordinary
course of business.  Management  believes that outcome of these matters will not
have a material adverse effect on the Company's financial  position,  results of
operations, or liquidity.

Note 8 - Segment Reporting

The Company has two reportable segments:  sales and financing. The sales segment
markets and sells timeshare  memberships and Fractional  Interests.  The finance
segment is primarily  responsible for servicing and collecting  Notes Receivable
originated in  conjunction  with the financing of sales of Vacation  Credits and
Fractional  Interests.  The finance  segment  does not include TW  Holdings,  TW
Holdings II, Trendwest Funding I or Trendwest  Funding II. Management  evaluates
the business  based on sales and  marketing  activities as these are the primary
drivers of the business.

The accounting  policies of the segments are the same as those  described in the
summary of significant  accounting policies.  The Company evaluates  performance
based on profits  or losses  from sales and  marketing  activities  on a pre-tax
basis. Intersegment revenues are recorded at market rates as if the transactions
occurred with third parties. Assets are not reported by segment.



<PAGE>





The following tables summarize the segment activity of the Company:

<TABLE>
<CAPTION>
                                                                                                   Segment
Three months ended June 30, 1999:                    Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                     <C>             <C>          <C>
External revenue                              $        63,426            753            953           65,132
Interest revenue - net                                     --            991             --              991
Interest revenue-intersegment                              --            861             --              861
Intersegment revenue                                       --            636             --              636
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $        63,426          3,241            953           67,620

Segment profit                                $        10,793          2,078            532           13,403

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $         6,022             --             --            6,022

                                                                                                   Segment
Three months ended June 30, 1998:                    Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
External revenue                              $        41,998            994            367           43,359
Interest revenue - net                                     --            769             --              769
Interest revenue-intersegment                              --            739             --              739
Intersegment revenue                                       --             65             --               65
                                                   -----------    -----------     -----------    -------------
         Segment revenue                      $        41,998          2,567            367           44,932

Segment profit                                $         6,279          1,741             45            8,065

Significant non-cash items:
Provision for doubtful accounts, sales
  returns and recourse liability              $         3,895             --             --            3,895

                                                                                                   Segment
Six months ended June 30, 1999:                      Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
External revenue                              $       112,442          2,476          1,775          116,693
Interest revenue - net                                     --          2,190             --            2,190
Interest revenue-intersegment                              --          1,587             --            1,587
Intersegment revenue                                       --          1,065             --            1,065
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $       112,442          7,318          1,775          121,535

Segment profit                                $        18,276          5,180            957           24,413

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $        10,744             --             --           10,744
Gain on sale of property and equipment        $            --            886             --              886

</TABLE>

<PAGE>



<TABLE>
<CAPTION>
                                                                                                   Segment
Six months ended June 30, 1998:                      Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                   <C>               <C>            <C>
External revenue                              $        76,873          1,478            995           79,346
Interest revenue - net                                     --          1,803             --            1,803
Interest revenue-intersegment                              --          1,298             --            1,298
Intersegment revenue                                       --            539             --              539
                                                   -----------    -----------     -----------    -------------
         Segment revenue                      $        76,873          5,118            995           82,986

Segment profit                                $        11,203          3,514            396           15,113

Significant non-cash items:
Provision for doubtful accounts, sales
  returns and recourse liability              $         7,061             --             --            7,061


</TABLE>

The following table provides a reconciliation of segment revenues and profits to
the consolidated amounts:

<TABLE>
<CAPTION>
                                                         Three Months                    Six Months
                                                        Ended June 30,                 Ended June 30,
                                                     1999           1998            1999            1998
                                                   -----------    -----------    ------------    -------------
<S>                                             <C>                <C>             <C>             <C>
Segment revenue                                 $     67,620         44,932         121,535           82,986
Interest expense reported net of interest
    income                                                53              2             109               38
Elimination of intersegment revenue                   (1,497)          (804)         (2,652)          (1,837)
Finance subsidiaries revenue                           7,119          3,863          14,207            9,635
                                                   -----------    -----------    ------------    -------------
               Consolidated revenue             $     73,295         47,993         133,199           90,822
                                                   ===========    ===========    ============    =============

Segment profit                                  $     13,403          8,065          24,413           15,113
Corporate overhead not included in segment
    reporting                                         (3,558)        (2,838)         (6,989)          (5,417)
Finance subsidiaries profit                            5,600          3,051          11,518            7,765
                                                   -----------    -----------    ------------    -------------
            Consolidated pre-tax income         $     15,445          8,278          28,942           17,461
                                                   ===========    ===========    ============    =============

</TABLE>

     All of the Company's revenue from external  customers is derived from sales
within the United States.

     Item 2 - Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

                              RESULTS OF OPERATIONS

Comparison  of the three  months  ended June 30, 1999 to the three  months ended
June 30, 1998

The Company  achieved total revenues of $73.3 million for the three months ended
June 30,  1999,  compared to $48.0  million for the three  months ended June 30,
1998, an increase of 52.7%.  The principal  reasons for the overall  improvement
were a 33.8%  increase in Vacation  Credit sales to $56.2  million for the three
months ended June 30, 1999,  from $42.0  million for the three months ended June
30, 1998,  and sales of  Fractional  Interests of $7.2 million.  The  Fractional
Interest  sales program  commenced  pre-selling  of fractional  interests at the
Depoe Bay resort on the Oregon Coast in October 1998. The Company  exercised its
purchase  option  in  April  of 1999  and  began  recognizing  revenue  from the
pre-sales at that time. The increase in Vacation  Credit sales was primarily the
result of a 31.6%  increase  in the  number  of  Vacation  Credits  sold to 42.9
million  during the three months ended June 30, 1999,  from 32.6 million  during
the three  months  ended  June 30,  1998.  This  increase  was the result of the
continued  maturation  of sales
<PAGE>


offices opened in 1998 and increased Upgrade sales.  Revenues from Upgrade sales
increased  21.9% to $7.8 million for the three months ended June 30, 1999,  from
$6.4  million for the three  months  ended June 30,  1998,  due  primarily to an
increase of 26.1% in the number of Vacation  Credits sold as Upgrades during the
three months  ended June 30,  1999,  compared to the three months ended June 30,
1998.  The average price per Vacation  Credit sold increased to $1.31 per credit
for the three months ended June 30, 1999,  versus $1.26 per credit for the three
months ended June 30, 1998,  and  reflected  an  approximate  4% increase in the
selling  price of  Vacation  Credits,  effective  June  29,  1998.  The  Company
instituted  another  increase the selling prices of Vacation Credits on June 28,
1999, of approximately 4%.

Finance  income  increased  6.5% to $3.3 million for the three months ended June
30,  1999,  from $3.1  million for the three  months  ended June 30,  1998.  The
increase  in finance  income is less than the  percentage  increase  in carrying
balances  of  Notes  Receivable  for  the two  periods  compared  because  of an
unfavorable   mark-to-market  adjustment  on  the  residual  interest  in  Notes
Receivable  sold  resulting  from  early  payoffs  and rising  short-term  LIBOR
interest rates  occurring late in the second quarter of 1999.  Gains on sales of
Notes  Receivable  increased  220.0% to $4.8  million for the three months ended
June 30, 1999,  from $1.5 million for the three months ended June 30, 1998,  due
to an increase in the principal  balances of Notes  Receivable sold of 129.9% to
$33.1  million  from $14.4  million for the three months ended June 30, 1999 and
1998,  respectively.  In  addition,  the  increase is due to a reduction  in the
required yield to the Bank Group of 12.5 basis points,  effective June 18, 1998,
and the new Receivables  Warehouse Facility through Prudential Securities Credit
Corporation.  The new  facility  has a required  yield of 100 basis  points over
LIBOR.

Vacation Credit and Fractional Interest cost of sales increased to $20.5 million
for the three  months  ended June 30,  1999,  from $11.2  million  for the three
months  ended June 30,  1998,  an increase of 83.0%,  primarily  reflecting  the
increase  in  sales  of  Vacation  Credits  and  Fractional   Interests.   Sales
recognition  of Fractional  Interests  began in the second  quarter of 1999, and
have a higher  product cost than  Vacation  Credits which is offset by the lower
sales and marketing  costs.  As a percentage of Vacation  Credit and  Fractional
Interests sales,  cost of sales increased to 32.3% from 26.7% of Vacation Credit
and  Fractional  Interest sales for each of the three months ended June 30, 1999
and 1998, respectively.

Sales and marketing  costs increased 27.1% to $26.7 million for the three months
ended June 30,  1999,  from $21.0  million for the three  months  ended June 30,
1998. As a percentage of Vacation Credit and Fractional  Interest  sales,  sales
and marketing costs decreased to 42.1% for the three months ended June 30, 1999,
from 50.0% for the three months ended June 30, 1998. This decrease  reflects the
sales  generated  from the new  Fractional  Interest  sales  program  which  has
significantly  lower sales and marketing  costs than Vacation  Credit sales.  In
addition,  the new  sales  offices  opened  during  1998 have  improved  closing
percentages  over last year's  start-up  phase which  further  reduces sales and
marketing   costs.  The  improvement  in  sales  and  marketing  costs  is  also
attributable  to the price increase  effective June 29, 1998, and the changes to
the commissions program effective June 30, 1998.

General and  administrative  expenses  increased  37.2% to $5.9  million for the
three months  ended June 30, 1999,  from $4.3 million for the three months ended
June 30, 1998.  As a percentage  of total  revenue,  general and  administrative
costs  decreased to 8.0% for the three months ended June 30, 1999, from 9.0% for
the three months  ended June 30, 1998.  Absent the increase in gains on sales of
Notes  Receivable  and Fractional  Interest  sales,  general and  administrative
expenses,  as a percentage of total revenue,  would have been  comparable to the
prior period.

Provision for doubtful accounts and recourse  liability  increased 51.7% to $4.4
million for the three  months  ended June 30,  1999,  from $2.9  million for the
three  months  ended June 30,  1998.  As a  percentage  of  Vacation  Credit and
Fractional sales, the provision remained  comparable at 6.9% for the two periods
compared.

Comparison of the six months ended June 30, 1999 to the six months ended
June 30, 1998

The Company  achieved  total revenues of $133.2 million for the six months ended
June 30, 1999, compared to $90.8 million for the six months ended June 30, 1998,
an increase of 46.7%. The principal  reasons for the overall  improvement were a
36.8%  increase in Vacation  Credit  sales to $105.2  million for the six months
ended June 30, 1999,  from $76.9 million for the six months ended June 30, 1998,
and sales of Fractional Interests of $7.2 million. The Fractional Interest sales
program commenced pre-selling of fractional interests at the Depoe Bay resort on
the Oregon Coast in October 1998. The Company  exercised its purchase  option in
April of 1999 and began  recognizing  revenue


<PAGE>

from the  pre-sales at that time.  This  increase was  primarily the result of a
34.0% increase in the number of Vacation Credits sold to 80.0 million during the
six months  ended June 30, 1999,  from 59.7 million  during the six months ended
June 30, 1998. This increase was the result of the continued maturation of sales
offices opened in 1998 and increased Upgrade sales.  Revenues from Upgrade sales
increased  19.0% to $15.0  million  for the six months  ended June 30, 1999 from
$12.6  million  for the six months  ended June 30,  1998,  due  primarily  to an
increase of 19.8% in the number of Vacation  Credits sold as Upgrades during the
six months ended June 30, 1999,  compared to the six months ended June 30, 1998.
The average price per Vacation Credit sold increased to $1.31 per credit for the
six months ended June 30, 1999, versus $1.26 per credit for the six months ended
June 30, 1998,  and reflected an approximate 4% increase in the selling price of
Vacation  Credits,  effective  June 29,  1998.  The Company  instituted  another
increase  the  selling  prices  of  Vacation   Credits  on  June  28,  1999,  of
approximately 4%.

Finance income increased 15.9% to $7.3 million for the six months ended June 30,
1999,  compared to $6.3  million  for the six months  ended June 30,  1998.  The
increase in finance income  reflects the increase in carrying  balances of Notes
Receivable  for the two periods  compared and the 1999 impact of an  unfavorable
mark-to-market  adjustment  on the residual  interest in Notes  Receivable  sold
resulting from early payoffs and rising interest rates.  Gains on sales of Notes
Receivable  increased  78.4% to $9.1  million for the six months  ended June 30,
1999, from $5.1 million for the six months ended June 30, 1998. This increase is
due to a reduction in the required yield to the Bank Group of 12.5 basis points,
effective  June 18, 1998, and the new  Receivables  Warehouse  Facility  through
Prudential Securities Credit Corporation.  The new facility has a required yield
of 100 basis points over LIBOR.

Other  income  increased  $1.1  million to $2.6 million for the six months ended
June 30, 1999,  compared to $1.5 million for the six months ended June 30, 1998,
due primarily to a gain recorded on the sale of the Bellevue  Corporate building
of $.9 million in March of 1999.

Vacation Credit and Fractional Interest cost of sales increased to $34.1 million
for the six months  ended June 30, 1999,  from $20.7  million for the six months
ended June 30, 1998, an increase of 64.7%,  primarily reflecting the increase in
sales of Vacation  Credits and  Fractional  Interest  sales.  As a percentage of
Vacation Credit and Fractional  Interest sales, cost of sales were 30.3% for the
six months ended June 30, 1999,  from 26.9% of Vacation Credit sales for the six
months  ended June 30,  1998.  This  increase  is the  result of the  Fractional
Interests  having a higher product cost than Vacation Credits which is offset by
lower sales and marketing costs.

Sales and marketing  costs  increased  29.7% to $50.2 million for the six months
ended June 30, 1999,  from $38.7 million for the six months ended June 30, 1998.
As a percentage of Vacation  Credit and  Fractional  Interest  sales,  sales and
marketing  costs decreased to 44.6% for the six months ended June 30, 1999, from
50.3% for the six months ended June 30, 1998.  This decrease  reflects the sales
generated from the new Fractional Interest sales program which has significantly
lower sales and marketing costs than Vacation Credit sales. In addition, the new
sales offices  opened during 1998 have improved  closing  percentages  over last
year's  start-up  phase which further  reduces sales and  marketing  costs.  The
improvement  in sales  and  marketing  costs is also  attributable  to the price
increase  effective  June 29, 1998, and the changes to the  commissions  program
effective June 30, 1998.

General and administrative expenses increased 38.3% to $11.2 million for the six
months ended June 30, 1999,  from $8.1 million for the six months ended June 30,
1998.  As a  percentage  of total  revenue,  general  and  administrative  costs
decreased  to 8.4% of total  revenue for the six months ended June 30, 1999 from
8.9% of total  revenue  for the six  months  ended  June 30,  1998.  Absent  the
increase in gains on sales of Notes  Receivable and Fractional  Interest  sales,
general and  administrative  expenses,  as a percentage of total revenue,  would
have been slightly  higher for the six month ended June 30, 1999,  when compared
to the same period last year.

Provision for doubtful accounts and recourse  liability  increased 47.2% to $7.8
million for the six months  ended June 30,  1999,  from $5.3 million for the six
months  ended June 30, 1998.  As a  percentage  of Vacation  Credit  sales,  the
provision remained comparable at 6.9% for each of the six months ended June 30.

The Company maintains an allowance for doubtful accounts in respect of the Notes
Receivable  owned by the Company and an  allowance  for  recourse  liability  in
respect  of the  Notes  Receivable  that  have  been  sold by the  Company.  The
aggregate  amount of these  allowances at June 30, 1999,  and December 31, 1998,
were $25.0 million, and $20.9

<PAGE>

million,  respectively,  representing approximately 7.2% and 6.8%, respectively,
of the total portfolio of Notes  Receivable at those dates,  including the Notes
Receivable  that had been sold by the Company.  No  assurance  can be given that
these  allowances  will be adequate,  and if the amount of the Notes  Receivable
that are ultimately  written off materially exceed the related  allowances,  the
Company's  business,  results of  operations  and financial  condition  could be
materially adversely affected.

The Company estimates its allowance for doubtful accounts and recourse liability
by  analysis  of bad  debts  by each  sales  site  by  year  of Note  Receivable
origination.  The Company uses this  historical  analysis,  in conjunction  with
other factors such as local economic conditions and industry trends. The Company
also utilizes  experience factors of more mature sales sites in establishing the
reserve for bad debts at new sales offices.  The Company  generally  charges off
all  receivables  when they  become 180 days past due and  returns  the  credits
associated  with such  charge-offs to inventory.  At June 30, 1999, and December
31, 1998, 1.84% and 1.97% of the Company's total receivables portfolio of $348.3
million and $307.7 million, respectively, were more than 60 days past due.

                         LIQUIDITY AND CAPITAL RESOURCES

The  Company  generates  cash from  operations  from down  payments  on sales of
Vacation  Credits and  Fractional  Interests  which are financed,  cash sales of
Vacation  Credits and  Fractional  Interests,  principal  and  interest on Notes
Receivable,  and  proceeds  from sales and  borrowings  collateralized  by Notes
Receivable. The Company also generates cash on the interest differential between
the interest  charged on the Notes  Receivable  and the  interest  paid on loans
collateralized by Notes Receivable.

During the six months ended June 30, 1999 and 1998,  cash  provided by operating
activities was $13.2 million and $3.1 million, respectively. Cash generated from
operating activities  increased  principally due to the increased sales of Notes
Receivable.  For the first six months of 1999, cash used in operating activities
was  principally  for the issuance and  purchase of Notes  Receivable  of $100.1
million to finance the  purchase of  Vacation  Credits by Owners and  Fractional
Interests  and an  increase  in  inventory  of $1.7  million  due to  additional
construction  in progress to meet  increasing  sales  demand.  Cash  provided by
operating  activities  resulted  primarily  from sales and  repayments  of Notes
Receivable of $88.0 million and net income of $17.7 million.  For the six months
ended June 30, 1998,  cash used in operating  activities was principally for the
issuance  and  purchase  of Notes  Receivable  of $74.6  million to finance  the
purchase of Vacation  Credits by Owners.  Cash provided by operating  activities
resulted  primarily  from the sale and  repayment of Notes  Receivable  of $69.5
million and net income of $11.0 million.

Net cash  provided by (used in)  investing  activities  for the six months ended
June 30, 1999 and 1998, was $.2 million and ($3.8) million,  respectively.  Cash
provided by investing activities was the result of $4.4 million in proceeds from
the sale of the Bellevue Corporate building.  Cash used in investing  activities
for the six months ended June 30, 1999,  of $4.2 million was the result of final
retention payments on the new Corporate headquarters and furniture and equipment
related  to the new  building.  Cash  used for the same  period  in 1998 of $3.8
million was for the  acquisition  of furniture and fixtures and data  processing
equipment required to meet the growth of the Company.

Net cash (used in)  provided by  financing  activities  for the six months ended
June 30, 1999 and 1998, was ($13.5) million and $1.9 million,  respectively. For
the six months  ended  June 30,  1999,  cash used in  financing  activities  was
principally  the result of payments on the Bank line of credit and other of $6.3
million and a decrease in Due to the Parent on the  revolving  line of credit of
$5.7  million.  Cash provided by financing  activities  for the six months ended
June 30, 1998,  was  principally  the result of  borrowings  on the Bank line of
credit of $4.0 million.  Cash used in financing  activities  for the same period
was the result of a decrease in Due to Parent of $1.9 million.

Financing of Notes  Receivable has been  accomplished  by use of a $98.0 million
Receivable  Transfer Agreement from the Bank Group through TW Holdings and a new
$75.0 million Receivables  Warehouse facility with Prudential  Securities Credit
Corporation  through TW Holdings II. On June 17, 1999,  the Company chose not to
renew the revolving  portion of the $98 million  Receivable  Transfer  Agreement
from the Bank Group.  The Company expects to be able to transfer the TW Holdings
receivables  to a new  special-purpose  entity  in  conjunction  with a  private
placement of Notes Receivable in August of 1999 and retire the credit facility.

<PAGE>

The Company has a $10  million  open line of credit with the Parent  which bears
interest  at prime plus 1%  (currently  8.75%) per annum.  The line of credit is
payable on demand. As of June 30, 1999, there was no outstanding indebtedness to
the Parent. The Company may advance excess funds to the Parent at prime minus 2%
(currently  5.75%)  per  annum.  At June  30,  1999,  there  was a $0.9  million
Receivable from Parent. The Company also has a $30.0 million unsecured revolving
line of credit.  Outstanding borrowings on the line of credit were $20.0 million
at June 30, 1999.

For the remainder of 1999, the Company anticipates spending  approximately $28.9
million  for  acquisitions  and  development  of new resort  properties  and for
expansion  and  development   activities.   The  Company  plans  to  fund  these
expenditures  with cash generated from operations,  including  further sales and
securitizations  of Notes  Receivable and borrowings  under the revolving credit
agreement.  Acquisition of new resort sites and properties is an ongoing process
and  availability  of certain  properties in desired  locations  could result in
increased  expenditures  for such  activities.  The Company  believes that, with
respect to its current  operations,  cash generated  from  operations and future
borrowings available under existing  agreements,  will be sufficient to meet the
Company's working capital and capital expenditure needs through the end of 1999.

WorldMark  maintains a replacement  reserve for the  WorldMark  Resorts which is
funded from the annual  assessments of the Owners.  At June 30, 1999, the amount
of such reserve was  approximately  $10.0 million.  The  replacement  reserve is
utilized  to  refurbish  and  replace  the  interiors  and  furnishings  of  the
condominium  units and to maintain the  exteriors  and common areas in WorldMark
Resorts in which all units are owned by WorldMark. The Company may advance funds
to WorldMark from time to time.

Since completed units at various resort  properties are acquired or developed in
advance and a significant  portion of the purchase price of Vacation  Credits is
financed  by the  Company,  the Company  continually  needs funds to acquire and
develop  property,  to carry Notes  Receivable  contracts and to provide working
capital.  The Company has  historically  secured  additional  funds  through its
revolving  credit  facility,  loans  from  the  Parent  and the  sale  of  Notes
Receivable through the Finance  Subsidiaries.  See "Risk Factors - Dependence on
Acquisitions of Additional Resort Units for Growth; Need for Additional Capital"
of the Company's 1998 Form 10-K.

In the future, the Company may negotiate additional credit facilities,  or issue
corporate debt or equity securities.  Any debt incurred or issued by the Company
may be secured or unsecured,  at a fixed or variable  interest  rate, and may be
subject to such additional terms as management deems appropriate.

Year 2000

The Year 2000 issue relates to a flaw in many electronic data processing systems
which prevents them from processing  year-date data  accurately  beyond the year
1999. This is the result of using a two-digit  representation  for the year, for
example "99" for "1999".  This approach assumed that the first two digits of the
abbreviated  date are  "19".  However,  when the  computer  reaches  2000 it may
interpret "00" as the year 1900 possibly  causing  inaccurate data processing or
processing to stop altogether.

The  Company has  completed a review of each line of code for its  Reservations,
Contract Processing, and Collections applications.  These applications have been
analyzed and tested and the Company has determined  that all these  applications
are Year 2000 compliant.  These critical applications are currently operating in
the live environment.

The Marketing  system is another critical  application  which is currently being
rewritten, upgraded and analyzed for Year 2000 compliance. The upgrades and Year
2000  compliance on the Marketing  system is expected to be completed and tested
by the end of the third quarter.

The Company is also monitoring the Year 2000 compliance program of Sage Systems,
Inc. (Sage), the servicer of the Company's Notes Receivable portfolio.  Sage has
represented that 28 programs are being remediated for Year 2000 compliance.  The
Company will play an active role in reviewing the  remediated  lines of code and
will also participate in the testing of Sage applications.

<PAGE>

The Company has incurred  approximately $.7 million to date to modify or replace
software  in order to  remediate  the Year  2000  issue and  anticipates  future
expenditures of approximately $.3 million. In the worst case, if the remediation
is not completed in time, management will employ additional personnel and use PC
based applications to maintain critical functions.

Based on its current  assessments  and remediation  plans,  the Company does not
expect that it will suffer any material  disruption  of its business as a result
of the Year 2000 issue.  Nevertheless,  the Company is  developing a contingency
plan to address the possibility of Sage being unable to adequately  address Year
2000 issues.


<PAGE>




Item 3 - Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to interest  rate  changes  primarily  as a result of its
financing  of  timeshare  purchases,   the  sale  and  securitization  of  notes
receivable and borrowing under revolving lines of credit. The Company's interest
rate risk  management  objective is to limit the impact of interest rate changes
on earnings and cash flows and to reduce overall borrowing costs. To achieve its
objectives,  the Company borrows funds,  sells or securitizes  Notes  Receivable
primarily  at fixed rates and may enter into  derivative  financial  instruments
such as interest  rate swaps,  caps and treasury  locks in order to mitigate its
interest  rate risk on a related  financial  instrument.  The  Company  does not
maintain a trading  account for any class of financial  instrument,  it does not
purchase  high risk  derivative  instruments  and it is not directly  subject to
foreign currency exchange rate risk nor commodity price risk. There have been no
material  changes to the  Company's  exposure to market risk since  December 31,
1998.

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings
         Incorporated by reference.  See Note 7 of "Notes to Condensed
          Consolidated Financial Statements."

Item 2 - Changes in Securities and Use of Proceeds
         None

Item 3 - Defaults Upon Senior Securities
         None

Item 4 - Submission of Matter to a Vote of Security Holders

         Trendwest   Resorts,   Inc.   (Company)  held  its  Annual  Meeting  of
         Shareholders on June 3, 1999. The matters voted upon at the meeting and
         the votes cast with respect thereto were as follows:

1.       Election of Directors:

                 Nominee:            Number of shares     Number of shares
                                         voted FOR            Withheld
 ---------------------------------- -------------------- -------------------
 ---------------------------------- -------------------- -------------------
 Jerol E. Andres                        17,017,909               2,040
 Roderick C. Wendt                      17,017,909               2,040
 Linda M. Tubbs                         17,017,909               2,040


2. Proposal to approve the 1999 Trendwest Employee Stock Purchase Plan:

   Number of shares     Number of shares     Number of shares
      voted FOR           voted AGAINST          Withheld
 --------------------- -------------------- --------------------
 --------------------- -------------------- --------------------
      17,019,149                  300                  500


3.       Proposal to Ratify the selection of KPMG LLP as independent auditors
         of the Company for the 1999 fiscal year:

     Number of shares     Number of shares     Number of shares
        voted FOR           voted AGAINST          Withheld
   --------------------- -------------------- --------------------
   --------------------- -------------------- --------------------
        17,019,149                  300                  500



<PAGE>




Item 5 - Other Information
                  On June 18, 1999, the Company and JELD-WEN,  inc., its largest
                  shareholder,  announced  that  JELD-WEN has  retained  Banc of
                  America   Securities  LLC  as  financial  advisor  to  explore
                  strategic  and financial  alternatives  relating to JELD-WEN's
                  ownership  interest  in  Trendwest  Resorts,   Inc..  JELD-WEN
                  currently holds  approximately  13.7 million shares, or 80% of
                  the Company's outstanding common stock.

Item 6 - Exhibits and Reports on Form 8-K

(a) Exhibits
    2.1      Restated Articles of Incorporation (1)
    2.2      Restated Bylaws (1)
    11       Statement re: Computation of Earnings per share - See note 4
             of "Notes to Condensed Consolidated Financial Statements".
    10.41    Receivable Sale Agreement between Registrant and TW Holdings II
              Dated as of April 15, 1999.
    10.42    Credit  Agreement  between  Registrant,  TW  Holdings II as
              Borrower  and  Prudential  Securities
             Credit Corporation as lender dated as of April 15, 1999.
    10.43    Trust  Indenture  between  Registrant,  TW Holdings  II, Sages
             Systems, Inc., and LaSalle National Bank Dated as of April 15,
             1999.
    27       Financial Data Schedule

             (1) Incorporated by reference to the Company's Registration
                  Statement on Form S-1 (File No. 333-26861).

(a) Reports on Form 8-K
             None


<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                      TRENDWEST RESORTS, INC.




Date:      August 10, 1999           /s/ WILLIAM F. PEARE
           ------------------        ------------------------------------------
                                      William F. Peare
                                      President, Chief Executive Officer and
                                      Director (Principal Executive Officer)


Date:      August 10, 1999           /s/ GARY A. FLORENCE
           ------------------        ------------------------------------------
                                      Gary A. Florence
                                      Vice President, Chief Financial Officer
                                      and Treasurer
                                      (Principal Financial Officer)