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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

      FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

  (Mark One)

    [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934
       For the fiscal year ended December 31, 2000

                                      OR

    [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
       For the transition period from         to

                         Commission File Number 1-9320

                          Wyndham International, Inc.
            (Exact name of registrant as specified in its charter)

               Delaware                              94-2878485
    (State or other jurisdiction of               (I.R.S. Employer
    incorporation or organization)               Identification No.)

   1950 Stemmons Freeway, Suite 6001
             Dallas, Texas                              75207
    (Address of principal executive                  (Zip Code)
               offices)

                                (214) 863-1000
             (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:

    Class A Common Stock, par value            New York Stock Exchange
            $0.01 per share


    Preferred Stock Purchase Rights            New York Stock Exchange
         (Title of each class)             (Name of each exchange on which
                                                     registered)

          Securities registered pursuant to Section 12(g) of the Act:

                             Series A Convertible
                          Preferred Stock, par value
                                $0.01 per share

  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 12 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 [_]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [_]

  The aggregate market value of the voting stock held by non-affiliates of
Wyndham International, Inc. as of March 19, 2001 was approximately $266
million, based upon a price of $1.75 per share.

  As of March 19, 2001, there were 167,887,723 shares of Wyndham class A
common stock issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

  Certain information called for by Part III is incorporated by reference to
the definitive proxy statement for the annual meetings of the stockholder of
Wyndham to be held on May 24, 2001, which will be filed with the Securities
and Exchange Commission not later than 120 days after December 31, 2000.

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                          WYNDHAM INTERNATIONAL, INC.

                            Form 10-K Annual Report
                                     Index

<TABLE>
<CAPTION>
                                                                     Form 10-K
Item No.                                                            Report Page
--------                                                            -----------

<S>                                                                 <C>
PART I

1. Business.......................................................        3
2. Properties.....................................................        3
3. Legal Proceedings .............................................       17
4. Submission of Matters to a Vote of Security Holders............       18

PART II

5. Market Price for Registrant's Common Equity and Related               19
 Stockholder Matters..............................................
6. Selected Financial Information.................................       20
7. Management's Discussion and Analysis of Financial Condition and       22
 Results of Operations............................................
7a. Qualitative and Quantitative Disclosures about Market Risks...       33
8. Financial Statements and Supplementary Data....................       34
9. Changes in and Disagreements with Accountants on Accounting and       34
 Financial Disclosure.............................................

PART III..........................................................       34

PART IV

14. Exhibits, Financial Statements and Schedules, and Reports on         34
 Form 8-K.........................................................
SIGNATURES........................................................       38
</TABLE>


                                       2
<PAGE>

                                    PART I

ITEM 1 AND 2. BUSINESS AND PROPERTIES

General Development of Business

   Wyndham International, Inc. (together with its consolidated subsidiaries,
"Wyndham" or the "Company") is a fully-integrated and multi-branded hotel
enterprise that operates primarily in the upscale and luxury segments. Through
a series of acquisitions, Wyndham has since 1995 grown from 20 hotels to
become one of the largest U.S. based hotel operators with a portfolio totaling
242 hotels with over 62,000 guestrooms.

   Wyndham is a Delaware corporation and its principal executive offices are
located at 1950 Stemmons Freeway, Suite 6001, Dallas, Texas 75207. As
discussed more fully below, effective June 30, 1999, Wyndham completed a
restructuring in which it acquired Patriot American Hospitality, Inc.
(together with its subsidiaries, "Patriot"). Unless the context otherwise
requires, references herein to "Old Wyndham" refer to Wyndham prior to the
June 30, 1999 restructuring and when the term Wyndham is used relating to a
period prior to June 30, 1999, such term refers to the combined entity of Old
Wyndham and Patriot.

   Patriot was formed in April 1995 as a self-administered real estate
investment trust ("REIT") for the purpose of acquiring equity interests in
hotel properties. On October 2, 1995, Patriot completed an initial public
offering of shares of common stock and commenced operations. Between October
1995 and July 1997, Patriot acquired interests in 56 hotel properties that it
leased to various third parties.

   On July 1, 1997, Patriot merged with and into California Jockey Club ("Cal
Jockey"), with Cal Jockey being the surviving legal entity. Cal Jockey's
shares of common stock were paired and traded together with the shares of
common stock of Bay Meadows Operating Company ("Bay Meadows") as a single unit
pursuant to a stock pairing agreement. In connection with the Cal Jockey
merger, Cal Jockey changed its name to "Patriot American Hospitality, Inc.,"
referred to herein as Patriot, and Bay Meadows changed its name to "Patriot
American Hospitality Operating Company". In January 1998, Patriot acquired
Wyndham Hotel Corporation through a merger (the "Wyndham merger"). In
connection with the Wyndham merger, Patriot American Hospitality Operating
Company changed its name to "Wyndham International, Inc." and is referred to
herein, collectively with its subsidiaries, as "Old Wyndham".

   The Cal Jockey merger was accounted for as a reverse acquisition in which
Cal Jockey was considered to be acquired by Patriot. For accounting purposes,
Old Wyndham commenced its operations concurrent with the closing of the Cal
Jockey merger on July 1, 1997.

   During 1998, Patriot and Wyndham grew rapidly, investing over $4.5 billion
in the acquisition of hotels and other related businesses. These acquisitions
were financed primarily with funds drawn on the companies' revolving credit
facility as well as through the issuance of paired shares and units of limited
partnership interests ("OP Units") in two operating partnerships owned
principally by Wyndham and Patriot (the "Operating Partnerships").

   In the Wyndham merger, Patriot acquired ownership of 10 Wyndham branded
hotels, 14 ClubHouse hotels, 52 management and franchise contracts, the
Wyndham and ClubHouse proprietary brand names and the Wyndham hotel management
company. Other major acquisitions during 1998 included (a) the acquisition of
three resort hotels in Puerto Rico and a majority interest in a related
management company, (b) the acquisition of Arcadian International Limited,
which owned 10 hotels in England, one hotel in Jersey, five owned and managed
Malmaison Hotels, two European resorts under development, the Malmaison
proprietary brand name and a 50% interest in a property being developed in
London, (c) the acquisition of Interstate Hotels Company ("Interstate"), which
owned or had controlling interests in 42 hotels representing over 12,000
rooms, leases for 84 hotels representing over 10,100 rooms, and management or
service agreements for 82 hotels representing over 20,400 rooms, (d) the
acquisition of SF Hotel Company, L.P., which owned four Summerfield Suites(R)
hotels, leasehold and management interests in 24 Summerfield Suites(R), Sierra
Suites(R) and Sunrise Suites hotels and management

                                       3
<PAGE>

contracts and franchise interests for 12 additional hotels, and (e) the
acquisition of the hospitality related business of CHC International, Inc.,
including 17 leases and 16 of the associated management contracts related to
Patriot hotels, eight third-party management contracts, two third-party asset
management contracts, the Grand Bay proprietary brand name and certain other
assets.

   During 1999, Wyndham completed an organizational restructuring. On June
30, 1999, a subsidiary of Old Wyndham was merged with and into Patriot and
Patriot became a wholly-owned subsidiary of Wyndham. The pairing arrangement
was terminated and each outstanding paired share was converted into a share of
Wyndham class A common stock. In addition, Patriot's status as a real estate
investment trust was terminated effective January 1, 1999, and Patriot became
a taxable corporation as of that date. The Company recorded a charge of
$675 million to establish a deferred tax liability resulting from Patriot's
change in tax status from a REIT to a C corporation and $285.3 million in
restructuring charges. See "Item 7. Management's Discussion and Analysis of
Financial Conditions and Results of Operations--Background--Restructuring."

   During 1999, Wyndham also completed a $1 billion equity investment and
issued Wyndham series A and series B preferred stock, each of which pays a
quarterly dividend on a cumulative basis, at a rate of 9.75% per year, and is
convertible at the holders' option into shares of Wyndham common stock.
Concurrent with the closing of the $1 billion equity investment, Wyndham
closed on a new $2.45 billion credit facility and $581 million in additional
mortgage debt.

   During 1999, the Company sold a racecourse, land adjacent to the racecourse
and 21 hotel properties. The Company received net cash proceeds of
approximately $123.4 million, after the repayment of mortgage debt of
$62.9 million and a mortgage note receivable in the amount of $6.0 million.
The Company recorded a net loss of $10.7 million in connection with these
transactions. In addition, Patriot distributed approximately 92% of the shares
of Interstate Hotel Corporation ("IHC") in the form of a dividend to
shareholders. The remaining 8% was owned equally by Wyndham and Marriott
International, Inc. ("Marriott"). This resulted in the Company owning an
approximate 55% non-controlling interest in Interstate Hotels, LLC ("IH LLC"),
an operating subsidiary of IHC.

 2000 Asset Divestitures

   During 2000, Wyndham agreed to the redemption of its aggregate 55% non-
voting economic interest in IH LLC (the "Wyndham Interest"). IH LLC
transferred to Wyndham a management agreement for one hotel owned by Wyndham
and amended management agreements with respect to six other hotels owned by
Wyndham to reduce the management fees and to permit termination by the owner
upon 30 days notice. In addition, approximately 9% of the Wyndham Interest was
redeemed by IH LLC and substantially all of the remainder was converted into a
preferred membership interest in IH LLC. At any time on or after July 1, 2001,
both IH LLC and Wyndham have the right to require that IH LLC redeem the
preferred membership interest for approximately $12.7 million to be paid with
a combination of cash and promissory notes. The portion of the Wyndham
Interest that was not converted into a preferred membership interest will
remain outstanding after the preferred membership interest is redeemed.
Thereafter, at any time on or after July 1, 2004, both IH LLC and Wyndham have
the right to require that IH LLC redeem the remaining common interest at an
amount that is the lesser of (a) the product of (i) five times IH LLC's EBITDA
as of December 31, 2003 and (ii) the percentage of total equity interest in
IH LLC which is represented by the remaining interest, or (b) approximately
$433,000. As additional consideration for the redemption and conversion of the
Wyndham Interest, Wyndham caused its representative on IHC's Board of
Directors to resign and relinquished its right to appoint a member to IHC's
Board of Directors in the future. In addition, Wyndham granted IHC an option
exercisable within 90 days of October 20, 2000, to acquire all of the IHC
stock owned by Wyndham at a weighted average trading price per share, provided
that the purchase price not be less than $3.00 per share nor more than
$4.00 per share. On December 3, 2000, the common stock was acquired for
approximately $597,000. As a result of this transaction, the Company
recognized an impairment charge on its investment in IH LLC of $16.5 million.

   Effective March 31, 2000, the Company sold its Sierra Suites hotel brand,
properties and related assets (the "Sierra transaction") to Sierra Suites
Hotel Company, L.P., an entity affiliated with Mr. Rolf Ruhfus, a director

                                       4
<PAGE>

of Wyndham, for approximately $53 million. The transaction included the sale
by the Company of one owned and three leased properties, 17 franchise and
management contracts for Sierra Suites and nine management contracts for
Summerfield Suites. Pursuant to the purchase agreement, the Company received
net cash proceeds of $23.0 million and was relieved of $29.8 million of future
obligations due under the purchase and sale agreement of the acquisition of
SF Hotel Company L.P. in June of 1998 (the "Summerfield transaction"). As a
result of the transaction, the Company recorded a net loss of $157,000.

   During 2000, the Company sold 26 other hotel properties, including the
Clubhouse Inn brand and received net cash proceeds of approximately
$175.0 million, after the repayment of mortgage debt of $70.4 million. The
Company also sold investments in three hotels, two parcels of land, retail
space and a garage and received net cash proceeds of $61.4 million after the
repayment of debt of $7.8 million and a note receivable of $4.3 million. The
Company recorded a net loss of $12.8 million, net of impairment of $66,821, as
a result of these transactions.

   Two of the hotel properties sold in 2000 were leased back to the Company
under two long-term operating leases. The leases have an initial term of
15 years and three optional five-year renewal periods exercisable at the
Company's option. Under the terms of the leases, yearly base rent aggregates
$4.3 million plus a contingent rent paid based on a percentage of revenues
over certain thresholds as specified in the leases. The leases require the
Company to pay substantially all expenses associated with the operation of the
leased hotels, including real estate taxes and insurance.

   At December 31, 2000, the Company has approximately $1.2 billion of assets
classified as held for sale, net of impairment. Management classifies certain
assets as held for sale based on management having the authority and intent of
entering into commitments for sale transactions expected to close in the next
twelve months. Based on estimated sale proceeds, the Company recorded a
provision for loss on assets held for sale of $361.6 million in operating
expenses for the year ended December 31, 2000. The assets held for sale had
combined earnings before interest, depreciation, and taxes of $148.1 million,
net of amounts owned by third party limited partners. At December 31, 2000,
the Company also recorded an impairment of $39.7 million in operating expenses
on real estate assets held for use where current facts, circumstances and
analysis indicate that the assets might be impaired.

 Other Developments

   On March 27, 2000, James D. Carreker resigned his position as Chief
Executive Officer. The Board elected Fred J. Kleisner to the position of Chief
Executive Officer in addition to his previous position as President. In
addition, the Board appointed Richard Smith to the position of Chief Financial
Officer in April 2000 and appointed Ted Teng to the position of Chief
Operating Officer in April 2000.

   On October 16, 2000, the Company announced that James D. Carreker resigned
as Chairman of the Board of Directors. The Board elected the Company's Chief
Executive Officer, Fred J. Kleisner, to the additional title of Chairman. Ted
Teng, Chief Operating Officer, was elected to the additional title of
President. Mr. Carreker remained a Director.

Description of Business

   The Company is a fully-integrated hotel enterprise that operates primarily
in the upscale and luxury segments. The Company's portfolio consists of
242 owned, leased, managed or franchised hotels with over 62,000 guestrooms.
The Company classifies its business into proprietary and non-proprietary brand
hotel divisions under which it manages the business.

   The Company's principal proprietary branded assets, Wyndham Hotel &
Resorts(R) consist of 160 owned, leased, managed or franchised hotels with
over 38,600 rooms. The Company offers upscale, full-service accommodations to
business and leisure travelers, providing a quality and consistent product
through its Wyndham Hotels & Resorts brand and its Wyndham Garden Hotels(R)
brand. The Company is positioned in the luxury segment under the Wyndham
Luxury Resorts brand. Wyndham Luxury Resorts include five-star resort

                                       5
<PAGE>

properties, such as the Boulders and Carmel Valley Ranch. Additionally, the
Company offers proprietary branded all-suite accommodations through its
upscale Summerfield Suites by Wyndham(TM) brand. The Company's primary growth
strategy is to develop its proprietary hotel brands through increasing
distribution, generating greater customer awareness, building brand loyalty,
offering cutting-edge amenities and services, and maintaining customer
satisfaction. The Company intends to continue to expand its Wyndham hotel
portfolio through the selective acquisition and development of hotels in major
metropolitan areas and resort destinations.

   The Company's non-proprietary branded hotels consists of 82 owned, leased,
managed or franchised hotels with over 23,500 guestrooms. All but four of
these hotels are operated under franchise or brand affiliations with
nationally recognized hotel companies, including Crowne Plaza(R), Hilton(R),
Hyatt(R), Radisson(R), Holiday Inn(R), Doubletree(R), Embassy Suites(R),
Ramada(R), Four Points by Sheraton(R), Marriott(R), and Courtyard by
Marriott(R). The Company's non-proprietary branded hotels are primarily
operated by one of its management divisions, Performance Hospitality
Management ("PHM"). In addition to the Company's owned and leased assets, PHM
manages 14 non-proprietary hotels for third parties. The Company has and will
continue to review its portfolio to identify certain non-proprietary hotels
that can be converted into one of its Wyndham proprietary brands. The balance
of the Company's non-proprietary hotels will be systematically disposed of
through asset sales and exchanges to create a source of capital for further
expansion of the Wyndham proprietary brand.

Proprietary Brands

   Wyndham is the brand umbrella under which all of its proprietary products
are marketed. It includes three four-star, upscale hotel brands that offer
full-service accommodations to business and leisure travelers, as well as the
five-star luxury resort brand. With hotels in major urban, suburban and resort
markets, the Wyndham brand offers products geared to the specific needs of
travelers based on their location, facilities and trip purpose.

   Wyndham Hotels & Resorts includes Wyndham Hotels which are upscale, full-
service hotels that contain an average of 400 hotel rooms, generally between
15,000 and 250,000 square feet of meeting space and a full range of guest
services and amenities, for business and leisure travelers, as well as
conferences and conventions. The hotels are located primarily in the central
business districts and dominant suburbs of major metropolitan markets and are
targeted to business groups, meetings, and individual business and leisure
travelers. These hotels offer elegantly appointed facilities and high levels
of guest service. The Company implemented new brand standards throughout the
Wyndham Hotels portfolio in 2000. These brand standards are designed to
further strengthen Wyndham's position as a leader in product and service
standards in the upscale segment. New service offerings include the Wyndham
ByRequestSM guest recognition program which focuses on rewarding repeat guests
with on-site amenities and benefits during their stay, as well as rewards for
use during future travel. The Company has targeted a number of technology
initiatives designed to position Wyndham as a dominant brand for the future.
For example, all Wyndham Hotels offer wireless internet access to their guests
and travelers, the ability to make reservations for any Wyndham hotel or
obtain information about Wyndham ByRequestSM via any wireless internet device
such as personal digital assistants and mobile phones. Wyndham Resorts are
distinctive properties and represent the largest hotel chain in the Caribbean.
The full-service and destination resorts average 300 rooms and service leisure
travelers as well as business groups. Primary destinations include Orlando,
South Florida and the Caribbean.

   Wyndham Luxury Resorts are five-star, luxury hotel properties featuring
between 150 and 300 rooms, numerous fine dining options, and other luxury and
recreational amenities. The resorts are distinguished by their focus on
incorporating the local environment into every aspect of the property, from
decor to cuisine to recreation. The luxury collection includes the Golden
Door(R), one of the world's preeminent spas based in Escondido, California.
Luxury Resorts are located in Arizona, California, Puerto Rico, and Mexico.

   Wyndham Garden Hotels, which serve individual business travelers and small
business groups, are located principally near major airports and suburban
business districts. The full-service hotels feature between 150 and 225 guest
rooms, and include up to 5,000 square feet of meeting space. Amenities and
services generally include a three-meal restaurant, signature Wyndham
Garden(R) libraries and laundry and room service. Consistent with

                                       6
<PAGE>

the Company's strategy to grow the Wyndham Hotels & Resorts brand, the Company
has also converted certain of the Wyndham Garden Hotels into Wyndham Hotels,
which is consistent with the Company's primary focus on expanding the core
Wyndham Hotels & Resorts brand.

   Summerfield Suites by Wyndham(TM) hotel brand offers guests the highest
quality lodging in the upscale all- suites segment. Each suite has a fully
equipped kitchen, a spacious living room and a private bedroom. Many of the
suites feature two bedroom, two bath units. The hotels also have a swimming
pool, exercise room and other amenities to serve business and leisure
travelers. Each Summerfield Suites hotel contains 86 to 150 suites in either
interior or exterior corridor design. The Company plans to lead its growth of
this product through franchising.

Non-Proprietary Brands

   Among its non-proprietary branded hotels, the Company owns and operates
82 hotels aggregating over 23,500 rooms under franchise or brand affiliations
with nationally recognized hotel companies, including Crowne Plaza(R),
Hilton(R), Hyatt(R), Radisson(R), Holiday Inn(R), Doubletree(R), Embassy
Suites(R), Ramada(R), Four Points by Sheraton(R), Marriott(R), and Courtyard
by Marriott(R). The majority of the Company's non-proprietary branded hotels
are full-service and operate in the luxury and upscale price points. Full-
service hotels generally offer a range of conference facilities and banquet
space, food and beverage accommodations, gift shops, and recreational areas,
including swimming pools. These hotels target both business and leisure
travelers, including meetings, groups and individuals.

LODGING

   The following table sets forth the number of hotels, number of rooms, total
revenue, average daily rate ("ADR"), average occupancy rate, and revenue per
available room ("REVPAR"), for the Company's owned and leased hotels as of
December 31, 2000.

<TABLE>
<CAPTION>
                                                    Number   Total
     Property Name              City        State  of Rooms Revenue    ADR   Occupancy RevPAR
     -------------        ---------------- ------- -------- -------- ------- --------- -------
                                          (Total Revenue in thousands)
<S>                       <C>              <C>     <C>      <C>      <C>     <C>       <C>
Wyndham Hotels & Resorts
Wyndham Andover.........  Andover          MA        293    $ 14,149 $107.35   75.7%   $ 81.23
Wyndham Arlington.......  Arlington        TX        310    $ 12,831 $ 91.17   72.2%   $ 65.83
Wyndham Atlanta.........  Atlanta          GA        312    $ 13,570 $131.82   59.4%   $ 78.28
Wyndham Baltimore--Inner
 Harbor.................  Baltimore        MD        707    $ 34,393 $121.31   75.2%   $ 91.23
Wyndham Bel Age.........  Hollywood        CA        200    $ 15,182 $167.19   74.9%   $125.15
Wyndham Billerica.......  Billerica        MA        210    $  9,652 $119.87   74.4%   $ 89.16
Wyndham Bloomington.....  Bloomington      MN        209    $  7,775 $ 83.74   81.4%   $ 68.14
Wyndham Boston..........  Boston           MA        362    $ 28,789 $199.56   82.5%   $164.57
Wyndham Bristol Place--
 Toronto Airport........  Toronto          Ontario   287    $ 13,974 $ 87.18   81.0%   $ 70.60
Wyndham Buttes Resort...  Tempe            AZ        353    $ 28,416 $137.46   75.7%   $104.12
Wyndham Casa Marina
 Resort & Beach House...  Key West         FL        311    $ 28,326 $190.67   83.6%   $159.42
Wyndham Chicago.........  Chicago          IL        417    $ 25,987 $163.07   69.9%   $113.96
Wyndham City Center.....  Washington       DC        352    $ 14,479 $112.15   72.4%   $ 81.18
Wyndham Colorado
 Springs................  Colorado Springs CO        311    $ 11,592 $ 86.73   69.1%   $ 59.95
Wyndham Commerce........  Commerce         CA        201    $  7,795 $ 97.51   68.0%   $ 66.26
Wyndham Dallas Market
 Center.................  Dallas           TX        228    $  7,011 $ 97.65   63.9%   $ 62.35
Wyndham Denver Tech
 Center.................  Denver           CO        180    $  5,553 $ 91.39   62.6%   $ 57.24
Wyndham El Conquistador
 Resort & Country Club..  Fajardo          PR        751    $104,873 $236.59   69.1%   $163.42
Wyndham El San Juan
 Hotel & Casino.........  San Juan         PR        382    $ 68,441 $224.90   84.3%   $189.57
Wyndham Emerald Plaza...  San Diego        CA        436    $ 26,151 $133.66   82.7%   $110.52
Wyndham Grand Bay--
 Coconut Grove..........  Miami            FL        177    $ 16,438 $224.49   70.4%   $158.08
Wyndham Greenspoint.....  Houston          TX        472    $ 23,286 $ 95.64   74.5%   $ 71.21
Wyndham Harbour Island..  Tampa            FL        299    $ 14,812 $126.48   69.0%   $ 87.28
Wyndham Indianapolis....  Indianapolis     IN        171    $  5,168 $ 87.32   63.5%   $ 55.43
Wyndham Miami Airport...  Miami            FL        408    $ 12,121 $ 79.22   70.2%   $ 55.64
Wyndham Miami Beach
 Resort.................  Miami            FL        424    $ 26,329 $136.34   74.8%   $101.94
</TABLE>

                                       7
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<TABLE>
<CAPTION>
                                                    Number   Total
     Property Name              City        State  of Rooms Revenue   ADR   Occupancy RevPAR
     -------------        ---------------- ------- -------- ------- ------- --------- -------
<S>                       <C>              <C>     <C>      <C>     <C>     <C>       <C>
Wyndham Midtown
 Atlanta................  Atlanta          GA         191   $ 7,700 $109.41   75.8%   $ 82.93
Wyndham Myrtle Beach
 Resort and Arcadian
 Shores Golf Club.......  Myrtle Beach     SC         385   $15,672 $100.92   62.9%   $ 63.53
Wyndham Nashville.......  Nashville        TN         180   $ 4,686 $ 75.07   66.3%   $ 49.76
Wyndham New Orleans.....  New Orleans      LA         438   $32,238 $175.58   79.8%   $140.05
Wyndham Northwest
 Chicago................  Itasca           IL         408   $28,327 $113.47   72.5%   $ 82.23
Wyndham Palace Resort &
 Spa....................  Lake Buena Vista FL       1,013   $80,518 $163.16   79.9%   $130.37
Wyndham Peachtree
 Conference Center......  Peachtree City   GA         250   $15,578 $118.63   59.8%   $ 70.89
Wyndham Peaks Resort &
 Golden
 Door Spa...............  Telluride        CO         174   $23,680 $328.03   57.0%   $187.05
Wyndham Philadelphia at
 Franklin Plaza.........  Philadelphia     PA         758   $40,104 $126.51   68.8%   $ 87.07
Wyndham Phoenix
 Airport................  Phoenix          AZ         210   $ 7,183 $ 92.40   72.3%   $ 66.83
Wyndham Pickwick Hotel..  San Francisco    CA         188   $ 7,375 $114.60   83.4%   $ 95.62
Wyndham Reach Resort....  Key West         FL         150   $10,879 $194.94   76.5%   $149.07
Wyndham Resort & Spa....  Fort Lauderdale  FL         496   $24,642 $122.23   53.9%   $ 65.89
Wyndham Richmond
 Airport................  Richmond         VA         155   $ 4,281 $ 61.37   76.3%   $ 46.84
Wyndham Riverfront......  New Orleans      LA         202   $ 9,331 $139.45   72.6%   $101.30
Wyndham Roanoke
 Airport................  Roanoke          VA         320   $ 8,965 $ 72.89   63.9%   $ 46.54
Wyndham Rose Hall &
 Resort
 Country Club...........  Montego Bay      Jamaica    488   $25,756 $108.46   71.4%   $ 77.39
Wyndham Salt Lake City..  Salt Lake City   UT         381   $12,480 $ 79.78   73.6%   $ 58.74
Wyndham San Diego.......  San Diego        CA         180   $ 8,081 $109.82   82.2%   $ 90.29
Wyndham Santa Maria.....  Key West         FL          51   $   498 $ 73.05   48.4%   $ 35.37
Wyndham Seattle-Tacoma
 Airport................  Seattle          WA         204   $ 7,271 $ 86.84   80.6%   $ 69.96
Wyndham Sunnyvale.......  Sunnyvale        CA         180   $ 9,458 $143.37   82.7%   $118.63
Wyndham Syracuse........  Syracuse         NY         250   $11,026 $ 86.12   69.5%   $ 59.89
Wyndham Toledo..........  Toledo           OH         241   $ 8,149 $ 79.64   68.1%   $ 54.22
Wyndham Valley Forge....  Wayne            PA         229   $10,833 $128.10   71.6%   $ 91.67
Wyndham Vinings.........  Atlanta          GA         159   $ 5,058 $ 91.28   67.6%   $ 61.66
Wyndham Washington,
 D.C. ..................  Washington       DC         400   $21,046 $122.33   79.3%   $ 96.97
Wyndham Westborough.....  Westborough      MA         223   $11,708 $100.04   79.7%   $ 79.71
 Wyndham Westshore--
 Tampa..................  Tampa            FL         324   $16,980 $ 96.81   70.5%   $ 68.22
Wyndham Windwatch.......  Haupauge         NY         360   $22,438 $131.60   81.7%   $107.51
Bourbon Orleans--A
 Wyndham Historic
 Hotel..................  New Orleans      LA         216   $10,423 $145.32   77.8%   $113.09
The Ambassador West--A
 Wyndham Historic
 Hotel..................  Chicago          IL         219   $10,806 $127.43   71.6%   $ 91.30
The Fairmount Hotel--A
 Wyndham Historic
 Hotel..................  San Antonio      TX          37   $ 2,269 $127.40   73.7%   $ 93.89
The Mayfair--A Wyndham
 Historic Hotel.........  St Louis         MO         182   $ 5,147 $ 82.89   67.4%   $ 55.85
The Tremont Boston--A
 Wyndham Historic
 Hotel..................  Boston           MA         322   $19,997 $147.43   89.4%   $131.86
The Tutwiler--A Wyndham
 Historic Hotel.........  Birmingham       AL         147   $ 5,295 $103.68   60.5%   $ 62.77
The Union Station--A
 Wyndham Historic
 Hotel..................  Nashville        TN         124   $ 5,039 $103.12   68.6%   $ 70.78

Wyndham Luxury Resorts
Carmel Valley Ranch--A
 Wyndham Luxury Resort..  Carmel Valley    CA         144   $24,659 $297.52   73.3%   $218.15
The Boulders--A Wyndham
 Luxury Resort..........  Carefree         AZ         160   $49,100 $341.92   75.1%   $256.78
The Lodge at Ventana
 Canyon--A Wyndham
 Luxury Resort..........  Tucson           AZ          50   $14,217 $211.67   67.1%   $141.99

Wyndham Garden Hotels
Wyndham Garden Hotel--
 Bothell................  Bothell          WA         166   $ 5,384 $ 94.45   66.9%   $ 63.82
Wyndham Garden Hotel--
 Brookfield.............  Brookfield       WI         178   $ 5,000 $ 76.34   66.8%   $ 51.01
Wyndham Garden Hotel--
 Chandler...............  Chandler         AZ         159   $ 4,369 $ 87.18   65.7%   $ 57.24
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                               Number   Total
     Property Name            City      State of Rooms Revenue   ADR   Occupancy RevPAR
     -------------        ------------- ----- -------- ------- ------- --------- -------
<S>                       <C>           <C>   <C>      <C>     <C>     <C>       <C>
Wyndham Garden Hotel--
 Charlotte..............  Charlotte      NC     173    $ 4,222 $ 76.77   59.5%   $ 45.71
Wyndham Garden Hotel--
 Dallas Park Central....  Dallas         TX     197    $ 4,294 $ 71.16   56.8%   $ 40.43
Wyndham Garden Hotel--
 LaGuardia..............  East Elmhurst  NY     229    $10,866 $123.81   92.3%   $114.27
Wyndham Garden Hotel--
 Las Colinas............  Irving         TX     168    $ 5,992 $105.42   70.0%   $ 73.84
Wyndham Garden Hotel--
 Naperville.............  Naperville     IL     143    $ 4,653 $ 87.36   74.0%   $ 64.63
Wyndham Garden Hotel--
 Novi...................  Novi           MI     148    $ 5,023 $ 92.57   72.0%   $ 66.62
Wyndham Garden Hotel--
 Overland Park..........  Overland Park  KS     180    $ 3,948 $ 70.04   59.1%   $ 41.39
Wyndham Garden Hotel--
 Perimeter..............  Atlanta        GA     143    $ 3,432 $ 85.94   57.1%   $ 49.05
Wyndham Garden Hotel--
 Pleasanton.............  Pleasanton     CA     171    $ 5,424 $ 93.19   76.6%   $ 71.42
Wyndham Garden Hotel--
 Schaumburg.............  Schaumburg     IL     188    $ 5,496 $ 96.21   65.2%   $ 62.77
Wyndham Garden Hotel--
 Wood Dale..............  Wood Dale      IL     162    $ 5,942 $ 99.51   71.1%   $ 70.75
Wyndham Garden Hotel--
 North Phoenix..........  Phoenix        AZ     166    $ 3,506 $ 73.65   57.4%   $ 42.24
Summerfield Suites by
 Wyndham
Summerfield by Wyndham--
 Addison................  Addison        TX     132    $ 4,073 $ 95.58   82.1%   $ 78.45
Summerfield by Wyndham--
 Belmont................  Belmont        CA     132    $ 7,344 $155.15   91.6%   $142.07
Summerfield by Wyndham--
 Buckhead...............  Atlanta        GA      88    $ 2,787 $113.40   72.8%   $ 82.55
Summerfield by Wyndham--
 Chatsworth.............  Chatsworth     CA     114    $ 3,764 $107.09   81.2%   $ 86.94
Summerfield by Wyndham--
 Denver.................  Englewood      CO     136    $ 3,989 $ 95.76   79.1%   $ 75.74
Summerfield by Wyndham--
 Dulles.................  Herndon        VA     112    $ 4,509 $129.48   81.1%   $104.99
Summerfield by Wyndham--
 El Segundo.............  El Segundo     CA     122    $ 5,452 $126.34   89.5%   $113.07
Summerfield by Wyndham--
 Lake Buena Vista.......  Orlando        FL     150    $ 6,496 $129.81   84.6%   $109.82
Summerfield by Wyndham--
 Las Colinas............  Irving         TX     148    $ 5,684 $114.84   86.4%   $ 99.22
Summerfield by Wyndham--
 Malvern................  Malvern        PA     120    $ 4,786 $131.64   78.2%   $103.00
Summerfield by Wyndham--
 Miami..................  Miami          FL     156    $ 5,137 $ 98.72   82.7%   $ 81.60
Summerfield by Wyndham--
 Morristown.............  Morristown     NJ     133    $ 7,059 $154.90   88.5%   $137.01
Summerfield by Wyndham--
 Mt. Laurel.............  Mt Laurel      NJ     116    $ 3,632 $ 99.15   79.2%   $ 78.56
Summerfield by Wyndham--
 Orlando................  Orlando        FL     146    $ 6,141 $127.33   82.8%   $105.40
Summerfield by Wyndham--
 Parisppany/Whippany....  Whippany       NJ     136    $ 5,933 $138.18   81.3%   $112.33
Summerfield by Wyndham--
 Perimeter..............  Atlanta        GA     122    $ 3,225 $ 91.78   75.3%   $ 69.08
Summerfield by Wyndham--
 Princeton..............  Princeton      NJ     124    $ 5,491 $137.25   83.1%   $114.02
Summerfield by Wyndham--
 San Francisco Airport..  San Bruno      CA      92    $ 4,674 $143.92   92.4%   $133.02
Summerfield by Wyndham--
 San Jose...............  San Jose       CA     114    $ 6,214 $159.36   90.2%   $143.74
Summerfield by Wyndham--
 Schaumburg.............  Schaumburg     IL     112    $ 3,928 $118.10   76.4%   $ 90.23
Summerfield by Wyndham--
 Seattle................  Seattle        WA     193    $ 6,209 $108.42   74.9%   $ 81.16
Summerfield by Wyndham--
 Somerset...............  Somerset       NJ     140    $ 6,257 $140.89   81.2%   $114.37
Summerfield by Wyndham--
 Sunnyvale..............  Sunnyvale      CA     138    $ 7,532 $163.69   88.5%   $144.83
Summerfield by Wyndham--
 Sunrise Suites.........  Tinton Falls   NJ      96    $ 3,065 $102.93   79.5%   $ 81.79
Summerfield by Wyndham--
 Torrance...............  Torrance       CA     144    $ 4,658 $100.41   82.2%   $ 82.52
Summerfield by Wyndham--
 Waltham................  Waltham        MA     136    $ 6,613 $149.60   84.0%   $125.59
Summerfield by Wyndham--
 West Hollywood.........  Hollywood      CA     109    $ 4,218 $126.95   74.7%   $ 94.86
Summerfield by Wyndham--
 Westport...............  St Louis       MO     106    $ 3,078 $ 89.98   83.9%   $ 75.49

Non-Proprietary Brand
 Properties
Condado Plaza...........  San Juan       PR     570    $69,437 $171.97   77.6%   $133.43
Courtyard by Marriott--
 Beachwood..............  Beachwood      OH     113    $ 3,235 $ 93.60   75.4%   $ 70.56
Crowne Plaza Ravinia....  Atlanta        GA     495    $26,102 $123.77   66.2%   $ 81.94
Doubletree--Allen
 Center.................  Houston        TX     350    $19,273 $132.53   71.6%   $ 94.92
Doubletree--Anaheim.....  Orange         CA     454    $16,535 $ 88.12   69.7%   $ 61.40
Doubletree--Des
 Plaines................  Des Plaines    IL     246    $ 7,002 $ 94.68   65.9%   $ 62.35
Doubletree--Glenview....  Glenview       IL     252    $10,615 $105.92   72.6%   $ 76.85
Doubletree--Miami.......  Miami          FL     266    $ 5,667 $ 72.32   64.3%   $ 46.50
Doubletree--
 Minneapolis............  Minneapolis    MN     230    $ 7,317 $110.12   65.2%   $ 71.78
Doubletree--Overland
 Park...................  Overland Park  KS     356    $15,858 $ 98.72   70.4%   $ 69.48
Doubletree-- Park
 Place..................  Minneapolis    MN     297    $11,689 $ 91.47   63.3%   $ 57.92
Doubletree--Post Oak....  Houston        TX     449    $24,306 $112.46   72.7%   $ 81.73
Doubletree-- St. Louis..  Chesterfield   MO     223    $12,223 $101.30   60.4%   $ 61.20
Doubletree--
 Tallahassee............  Tallahassee    FL     244    $ 8,080 $ 88.74   69.3%   $ 61.46
Doubletree--Tulsa.......  Tulsa          OK     417    $10,967 $ 72.56   60.2%   $ 43.65
Doubletree--
 Westminster............  Westminster    CO     180    $ 6,408 $ 89.47   67.9%   $ 60.72
</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                   Number   Total
     Property Name              City        State of Rooms Revenue   ADR   Occupancy RevPAR
     -------------        ----------------- ----- -------- ------- ------- --------- -------
<S>                       <C>               <C>   <C>      <C>     <C>     <C>       <C>
Embassy Suites Chicago..  Chicago            IL     358    $22,451 $183.31   82.4%   $151.05
Embassy Suites Hunt
 Valley.................  Hunt Valley        MD     223    $ 7,653 $106.85   68.4%   $ 73.11
Embassy Suites Phoenix..  Phoenix            AZ     314    $10,793 $ 84.15   77.6%   $ 65.29
Embassy Suites
 Schaumburg.............  Schaumburg         IL     209    $ 8,615 $125.43   69.6%   $ 87.25
Hilton Cleveland........  Independence       OH     191    $10,323 $ 90.27   69.8%   $ 62.97
Hilton Columbus.........  Columbus           GA     177    $ 5,142 $ 82.38   67.1%   $ 55.27
Hilton DelMar...........  San Diego          CA     245    $12,007 $110.92   80.6%   $ 89.37
Hilton Denver...........  Greenwood Village  CO     305    $12,543 $ 97.78   64.8%   $ 63.39
Hilton Ft. Lauderdale...  Dania              FL     383    $15,477 $ 79.89   88.2%   $ 70.45
Hilton Huntington.......  Melville           NY     302    $23,572 $160.09   77.0%   $123.35
Hilton Parsippany.......  Parsippany         NJ     510    $29,559 $136.49   71.9%   $ 98.15
Hilton Melbourne........  Melbourne          FL     240    $ 6,817 $ 76.69   61.7%   $ 47.30
Hilton Newark...........  Newark             NJ     253    $15,685 $142.53   85.3%   $121.59
Holiday Inn Aristocrat..  Dallas             TX     172    $ 4,986 $107.78   59.3%   $ 63.87
Holiday Inn Brentwood...  Brentwood          TN     246    $ 5,073 $ 65.52   62.1%   $ 40.72
Holiday Inn Dallas......  Dallas             TX     379    $10,361 $ 83.89   58.4%   $ 49.02
Holiday Inn Houston.....  Houston            TX     193    $ 3,605 $ 70.13   54.3%   $ 38.06
Holiday Inn San Angelo..  San Angelo         TX     148    $ 3,092 $ 65.64   69.8%   $ 45.80
Holiday Inn San
 Francisco..............  San Francisco      CA     224    $11,153 $126.52   85.3%   $107.92
Holiday Inn Westlake....  Westlake           OH     266    $ 6,722 $ 77.15   57.5%   $ 44.35
Hyatt Lexington.........  Lexington          KY     365    $12,299 $ 92.76   54.8%   $ 50.84
Hyatt Newporter.........  Newport Beach      CA     410    $27,194 $132.41   75.8%   $100.37
Marriott Albany.........  Albany             NY     359    $21,723 $125.08   83.0%   $103.88
Marriott Atlanta North
 Central................  Atlanta            GA     287    $12,095 $ 99.14   69.8%   $ 69.25
Marriott Harrisburg.....  Harrisburg         PA     348    $15,298 $105.06   70.5%   $ 74.11
Marriott Houston North
 at Greenspoint.........  Houston            TX     391    $14,133 $ 97.65   71.0%   $ 69.30
Marriott Indian River
 Plantation Resort......  Stuart             FL     297    $17,834 $119.49   66.1%   $ 78.96
Marriott Minneapolis
 Southwest..............  Minnetonka         MN     320    $16,041 $117.74   71.0%   $ 83.62
Marriott Philadelphia
 West...................  Conshohocken       PA     286    $20,035 $160.83   78.5%   $126.25
Marriott Pittsburgh
 Airport................  Corapolis          PA     314    $17,794 $117.02   79.4%   $ 92.95
Marriott San Diego
 Mission Valley.........  San Diego          CA     350    $19,107 $121.76   81.5%   $ 99.21
Marriott St. Louis
 West...................  St Louis           MO     300    $14,483 $108.66   69.7%   $ 75.77
Marriott Troy...........  Troy               MI     350    $24,862 $145.88   77.0%   $112.26
Marriott Tyson's
 Corner.................  Vienna             VA     390    $25,368 $156.97   79.8%   $125.28
Marriott Warner Center..  Woodland Hills     CA     463    $28,178 $117.58   86.5%   $101.70
Park Shore..............  Honolulu           HI     227    $ 5,572 $ 72.80   72.2%   $ 52.59
Radisson Akron..........  Akron              OH     130    $ 2,318 $ 78.40   51.2%   $ 40.13
Radisson Beachwood......  Beachwood          OH     196    $ 4,857 $ 79.41   60.2%   $ 47.84
Radisson Burlington.....  Burlington         VT     256    $12,838 $113.02   82.7%   $ 93.44
Radisson Dallas.........  Dallas             TX     199    $ 5,335 $ 74.39   73.4%   $ 54.61
Radisson Englewood......  Englewood          NJ     194    $ 8,792 $114.41   81.0%   $ 92.64
Radisson Ft. Magruder...  Williamsburg       VA     303    $ 9,421 $ 78.23   68.5%   $ 53.59
Radisson Lisle..........  Lisle              IL     242    $12,389 $102.25   69.7%   $ 71.26
Radisson New Orleans....  New Orleans        LA     759    $26,144 $105.16   68.6%   $ 72.08
Radisson Riverwalk......  Jacksonville       FL     322    $11,172 $ 78.52   78.4%   $ 61.55
Radisson San Jose.......  San Jose           CA     185    $ 9,588 $143.22   79.1%   $113.24
Radisson Town &
 Country................  Houston            TX     173    $ 4,327 $ 85.27   73.2%   $ 62.41
Ramada Nashville
 Downtown...............  Nashville          TN     285    $ 5,349 $ 70.13   62.0%   $ 43.47
Ramada San Francisco....  San Francisco      CA     323    $10,280 $ 88.15   79.8%   $ 70.32
Regency.................  San Juan           PR     127    $ 4,057 $126.21   58.7%   $ 74.04
Sheraton Saginaw........  Saginaw            MI     156    $ 3,052 $ 61.75   76.3%   $ 47.14
Valley River Inn........  Eugene             OR     257    $11,554 $ 94.44   68.8%   $ 64.99
</TABLE>

                                       10
<PAGE>

Total Portfolio

<TABLE>
<CAPTION>
                                          Owned Leased Managed Franchised Total
                                          ----- ------ ------- ---------- -----
<S>                                       <C>   <C>    <C>     <C>        <C>
Wyndham Hotel & Resorts..................   52    11      14        8       85
Wyndham Luxury Resorts...................    3    --       2       --        5
Wyndham Garden Hotels....................   10     5       5       12       32
Summerfield Suites by Wyndham............    6    22      --       10       38
                                           ---   ---     ---      ---      ---
Proprietary Brand Hotels--subtotal.......   71    38      21       30      160
Non-Proprietary Brand Hotels.............   68    --      14       --       82
                                           ---   ---     ---      ---      ---
Total....................................  139    38      35       30      242
                                           ===   ===     ===      ===      ===
</TABLE>

Total Portfolio

 Franchise and Brand Affiliations

   As of December 31, 2000, all but four of the Company's owned hotels are
operated under franchise or brand affiliations with nationally recognized
hotel companies. Franchisors and brand operators provide a variety of benefits
for hotels which include national advertising, publicity and other marketing
programs designed to increase brand awareness, training of personnel,
continuous review of quality standards and centralized reservation systems.
The Company generally is the licensee under the franchise agreement related to
such hotel. The Company is responsible for making all payments under the
franchise agreements to the franchisors. Franchise royalties and fees
generally range up to approximately 10% of room revenue. The duration of the
franchise agreements are varied, but generally may be terminated upon prior
notice and/or upon payment of certain specified fees.

 Management of the Hotels

   As of December 31, 2000, the Company managed 35 hotels for third parties
pursuant to management contracts under which it is responsible for the day-to-
day operation of the hotels. Of the 35 managed hotels, 21 hotels were managed
under proprietary brands of the Company, while 14 hotels were managed under
non-proprietary brands of the Company. These operations include managing hotel
accommodations, meeting rooms and food and beverage services as well as hiring
and training each hotel's staff, planning and providing sales and marketing
services, purchasing operating supplies, inventories and furniture, fixtures
and equipment, providing routine repairs and maintenance and performing hotel
accounting functions, including the preparation of monthly financial
statements. Management fees generally range up to approximately 5% of total
revenue. The terms of the management contracts vary from hotel to hotel, but
range from 1 to 20 years. As of December 31, 2000, the average remaining term
for the management contracts was approximately 6.1 years.

 Employees

   As of December 31, 2000, Wyndham had approximately 28,000 employees, and
retains appropriate support personnel to manage its operations.

Certain Risk Factors

   Set forth below are important risks and uncertainties that could cause
Wyndham's actual results to differ materially from those expressed in forward-
looking statements made by the management of Wyndham. In this section, the
words "we", "us", and "our" refer only to Wyndham and its subsidiaries and not
to any other person.

                                      11
<PAGE>

 Hotel Industry Risks

   Operating Risks. Our primary business is buying, selling, leasing and
managing hotels. This business is subject to operating risks common to the
hotel industry, including:

  .  competition for guests from other hotles, a number of which may have
     greater marketing and financial resources and experienc than us and our
     hotel management companies;

  .  increases in operating costs due to inflation and other factors, which
     may not be offset by increased room rates;

  .  dependence on business and commercial travelers and tourism, which may
     fluctuate amd be seasonal;

  .  increases in energy costs and other travel expenses, which may deter
     travelers; and

  .  adverse effects of general and local economic conditions.

   These factors could adversely affect our ability to generate revenues and
our financial condition and results of operations.

   We may be unable to obtain or transfer necessary operating licenses in
hotel acquisitions. When we acquire hotels or hotel operating companies, we
may be unable to transfer certain operating licenses or obtain new licenses in
a timely manner, such as food and beverage licenses. Although hotels can sell
alcoholic beverages under interim licenses or licenses obtained before we
acquire them, there can be no assurance that these licenses will remain in
effect until we (or our hotel management companies) obtain new licenses. If a
hotel fails to have a food and beverage license or other operating licenses,
this failure would adversely affect the hotel's ability to generate revenues
and could adversely affect our financial condition and results of operations.

   Internet Reservation Channels. A percentage of our hotel rooms are booked
through internet travel intermediaries such as Expedia.com, Travelocity.com,
Hotwire.com, Priceline.com and Click-It weekends. As this percentage
increases, these intermediaries may be able to obtain higher commissions,
reduced room rates or other significant contract concessions from us.
Moreover, some of these internet travel intermediaries are attempting to
commoditize hotel rooms by increasing the importance of price and general
indicators of quality at the expense of brand identification. These agencies
hope that consumers will eventually develop brand loyalties to their
reservation systems rather than to our lodging brands. If this occurs, it
could adversely affect our financial condition and results of operations.

   Hotel Renovation Costs and Capital Expenditures. In general, hotels have an
ongoing need for renovations and other capital improvements, particularly in
older structures, including periodically replacing or refurbishing furniture,
fixtures and equipment. Under the terms of certain debt and lease agreements,
we must establish a reserve to pay for certain capital expenditures and for
periodically replacing or refurbishing furniture, fixtures and equipment. If
capital expenditures exceed our expectations, this excess would have an
adverse effect on our available cash. In addition, we may acquire hotels that
require significant renovation. When we renovate hotels, we incur risks,
including the risk of environmental problems, construction cost overruns and
delays, uncertainties as to market demand after we renovate, market demand
deterioration after we begin renovating, and unanticipated competition
emerging from other hotels.

   Competition For Hotel Acquisition Opportunities. We may be competing for
hotel acquisition opportunities with entities that have substantially greater
financial resources. These entities may generally be able to accept more risk
than we can prudently manage, including risks of a hotel operator's
creditworthiness or a target hotel's geographic location. Competition may
generally reduce the number of hotel acquisition opportunities that we believe
suitable.

   Seasonality. The hotel industry is seasonal in nature; however, the periods
during which the Company's hotel properties experience higher revenues vary
from property to property and depend predominantly on the property's location.
The Company's revenues typically have been higher in the first and second
quarters than in the third and fourth quarters.

                                      12
<PAGE>

Real Estate Risks

   General Risks. Our ability to generate revenues from our hotels may be
adversely affected by risks common to the ownership, leasing or operation of
real property, including:

  .  changes in national economic conditions;

  .  changes in local market conditions due to changes in general or local
     economic conditions and neighborhood characteristics;

  .  changes in interest rates;

  .  changes in the availability, cost and terms of mortgage funds;

  .  the impact of present or future environmental legislation and compliance
     with environmental laws;

  .  the ongoing need for capital improvements, particularly in older
     structures;

  .  changes in real estate tax rates and other operating expenses;

  .  adverse changes in governmental rules and fiscal policies;

  .  adverse changes in zoning laws;

  .  civil unrest;

  .  acts of God, including earthquakes and other natural disasters (which
     may result in uninsured losses); and

  .  other factors that are beyond our control.

   Value and Illiquidity of Real Estate. Real estate is a relatively illiquid
asset. Therefore, our ability to respond to changes in economic and other
conditions will be limited. If we must sell a property, there can be no
assurance that we will be able to dispose of it in the time period we desire
or that the sales price of any property will equal or exceed the amount of our
initial investment in the property.

   Property Taxes. Our properties are subject to real property taxes. The real
property taxes on our properties may increase or decrease as property tax
rates change and as the value of the properties are assessed or reassessed by
taxing authorities. Increases in property taxes may adversely affect our
financial condition and results of operations.

   Consents of Ground Lessors Required For Sale of Certain Hotels. Some of our
properties are subject to ground leases with third party lessors. In addition,
we may acquire properties in the future that are subject to ground leases. If
we wish to sell a property that is subject to a ground lease or wish to assign
our leasehold interest in the ground lease, we may need the consent of third
party lessors. As a result, we may not be able to sell or assign our interest
in these properties without the consent of these lessors.

   Environmental Matters. Our operating costs may be affected by the cost of
complying with existing and future environmental laws, ordinances and
regulations. Under various federal, state and local environmental laws,
ordinances and regulations, we may be liable for the costs of removing or
remediating hazardous or toxic substances on, under, or in real property
currently or previously owned or operated by us. These laws often impose
liability whether or not we knew of, or were responsible for, the presence of
hazardous or toxic substances. In addition, our ability to borrow by using
real property as collateral may be adversely affected by the presence of
hazardous or toxic substances, or the failure to remediate the property
properly. By arranging for the transportation, disposal or treatment of
hazardous or toxic substances, we may also be liable for the costs of removing
or remediating these substances at the disposal or treatment facility, even if
we never owned or operated the disposal or treatment facility. We could be
held liable under environmental laws used to impose liability for releases of
hazardous materials, including asbestos-containing materials, into the
environment. Third parties may seek recovery from us for personal injuries
associated with exposure to hazardous materials on real property owned or
operated by us. Environmental laws may also impose restrictions on the manner
in which we

                                      13
<PAGE>

may use or transfer a property or in which we operate our business on a
property. In connection with our hotels, we may be potentially liable for any
environmental costs. The cost of defending against claims of liability or
remediating contaminated property and the cost of complying with environmental
laws could materially adversely affect our results of operations and financial
condition. Qualified independent environmental engineers have conducted Phase
I environmental site assessments on substantially all of our properties. The
purpose of these environmental assessments was to identify potential sources
of contamination for which any of our properties may be responsible and to
assess the status of environmental regulatory compliance. The environmental
assessments have not revealed any environmental liability or compliance
concerns that we believe would have a material adverse effect on our business,
assets, results of operations or liquidity, nor are we aware of any
environmental liability or compliance concerns. Nevertheless, these
environmental assessments may not have revealed all environmental liabilities
or compliance concerns. Also, there may be material environmental liabilities
or compliance concerns of which we are currently unaware. We have not been
notified by any governmental authority, and we have no other knowledge of, any
material noncompliance, liability or claim relating to hazardous or toxic
substances or other environmental substances in connection with any of our
properties.

   Uninsured and Underinsured Losses. Each of the leases with third parties
specifies comprehensive insurance that must be maintained on each of the
applicable leased hotels, including liability, fire and extended coverage. We
believe this specified coverage is of the type and amount customarily obtained
for hotels. Leases for subsequently acquired hotels will contain similar
provisions. However, there are certain types of losses, generally of a
catastrophic nature such as earthquakes and floods that may be uninsurable or
not economically insurable. Our Board of Directors and management will use
their discretion in determining amounts, coverage limits and deductibility
provisions of insurance, with a view to maintaining appropriate insurance
coverage on our investments at a reasonable cost and on suitable terms. This
may result in insurance coverage that, in the event of a substantial loss,
would not be sufficient to pay the full current market value or current
replacement cost of the lost investment. Inflation, changes in building codes
and ordinances, environmental considerations, and other factors also might
make it impractical to use insurance proceeds to replace the property after it
has been damaged or destroyed. Under these circumstances, the insurance
proceeds received might not be adequate to restore our economic position with
respect to the damaged property.

   Acquisition and development risks. We currently intend to pursue
acquisitions of additional hotels and hotel operating companies and, under
appropriate circumstances, may pursue development opportunities. Acquisitions
entail risks that the acquired hotels or hotel operating companies will fail
to perform according to our expectations or that our cost estimates to market,
acquire and operate properties will prove inaccurate. In addition, hotel
development is subject to other risks, including risks of construction delays
or cost overruns that may increase project costs, new project commencement
risks such as receiving zoning, occupancy and other required governmental
approvals and permits, and incurring development costs for projects that are
not pursued to completion.

   We depend on management contracts. We manage hotels for third party owners
pursuant to management contracts. These contracts may be acquired, terminated,
renegotiated or converted to franchise agreements in the ordinary course of
our business. However, the hotel property owner may terminate these management
contracts if we fail to meet certain performance standards, if the property is
sold to a third party, if the owner defaults on indebtedness encumbering the
property, upon a foreclosure of the property, closing of the property and
certain business combinations involving us in which our name or current
management team does not survive.

   There can be no assurance that we will be able to replace terminated
management contracts, or that the terms of renegotiated or converted contracts
will be as favorable as the terms that existed before such renegotiations or
conversion. We also will be subject to the risk that a hotel property owner
will be unable to pay management fees to us. In addition, in certain
circumstances, we may be required to make loans to or capital investments in
hotel properties in connection with management contracts. If any of these
hotel properties suffers poor operating results or if we lose our management
contract, we may not recover our loan or capital investment.

                                      14
<PAGE>

 Risks of Operating Hotels under Franchise or Brand Affiliations

   We operate some of our hotels under franchise or brand affiliations. In
addition, we may acquire hotels in the future that are operated under
franchise or brand affiliations. Each franchised hotel must meet specified
operating standards and other terms and conditions to continue its franchise
license. The continued use of a brand generally depends upon the continuation
of the management agreement related to that hotel with the hotel's management
entity. Franchisors typically inspect licensed properties periodically to
confirm adherence to operating standards. Actions by us, our affiliates or the
hotel management entities could cause a breach of these standards or other
terms and conditions of a franchise license or the loss or cancellation of a
franchise license. It is possible that a franchisor could condition the
continuation of a franchise license on the completion of capital improvements
which our Board of Directors determines are too expensive or otherwise
unwarranted in light of general economic conditions or the operating results
or prospects of the affected hotel. In that event, our Board of Directors may
elect to allow the franchise license to lapse which could result in our
incurring significant termination costs. If a franchise or brand affiliation
is terminated for any reason, we may try to obtain a suitable replacement
franchise or brand affiliation, or to operate the hotel independent of a
franchise or brand affiliation. If we lose a franchise or brand affiliation,
we will lose the associated name recognition, marketing support and
centralized reservation systems provided by the franchisor or brand owner.
This loss could adversely affect the value of the hotel and our results of
operations.

 Risks Relating to Gaming Operations

   Regulation of Gaming Operations. We own and operate several casino gaming
facilities at some of our hotels, including El San Juan, El Conquistador, and
Condado Plaza in Puerto Rico. Each of these gaming operations is subject to
extensive licensing, permitting and regulatory requirements administered by
various governmental entities.

   Typically, gaming regulatory authorities have broad powers related to the
gaming operations licenses. They may revoke, suspend, condition or limit our
gaming approvals and licenses, impose substantial fines and take other
actions, any of which could have a material adverse effect on our business and
the value of our hotel/casinos. Our directors, officers and some key employees
are subject to licensing or suitability determinations by various gaming
authorities. If any of those gaming authorities were to find someone
unsuitable, we would have to sever our relationship with that person.

   Risks Associated with High-End Gaming. The high-end gaming business is more
volatile than other forms of gaming. Fluctuations in customers' high-end
gaming activities could have an adverse impact on our financial condition and
results of operations. In addition, a significant portion of our table gaming
is attributable to a relatively small number of international customers. If
the most significant of these customers reduces or quits his or her gaming, it
could have an adverse effect on our financial condition and results of
operations.

 Risks Relating to Our Indebtedness

   As of December 31, 2000, our outstanding debt was approximately $3.4
billion and our ratio of debt to total stockholders' equity was approximately
1.89 to 1. Our aggregate outstanding debt includes the following:

  .  Senior Credit Facility. We have a senior credit facility comprised of
     (1) term loans in an aggregate principal amount of $1.3 billion which
     expire on June 30, 2006, and (2) a revolving credit facility in an
     aggregate principal amount of up to $500 million which expires on June
     30, 2004. As of December 31, 2000, we had borrowed $85 million under the
     revolving credit facility. The senior credit facility is guaranteed by
     our domestic subsidiaries and secured by pledges of our equity interests
     and the equity interests of our subsidiaries.

  .  Increasing Rate Loans. We have an increasing rate loan facility in the
     aggregate principal amount of $617 million which expires on June 30,
     2004. The lenders under the increasing rate loans receive the benefit of
     the same guarantees and pledges of security provided under the senior
     credit facility.

                                      15
<PAGE>

  .  Mortgage Debt. As of December 31, 2000, we had outstanding $1.3 billion
     of mortgage debt. The mortgage debt has a weighted average interest rate
     of 8.71% and a weighted average remaining life of 3.9 years. This
     mortgage debt is secured by 62 of our properties.

   We also may borrow additional amounts from the same or other lenders in the
future, may assume debt in connection with acquisitions, or may issue
corporate debt securities in public or private offerings. Our organizational
documents do not limit the amount of indebtedness we may incur. However, our
ability to borrow under the revolving credit facility is subject to our
compliance with a number of customary financial and other covenants, including
total leverage and interest coverage ratios. Our inability to borrow under the
revolving credit facility could materially adversely affect our ability to
fund operations or expand our business. Further, substantially all of our debt
bears interest at a variable rate. Economic conditions could result in higher
interest rates, which could increase debt service requirements on variable
rate debt. Our debt service requirements will require the use of a substantial
portion of our operating cash flow to pay interest on our debt instead of for
other corporate purposes.

   There can be no assurance that we will be able to meet our debt service
obligations and, to the extent that we cannot, we may lose some or all of our
assets, including hotel properties. Adverse economic conditions could cause
the terms on which we borrow to worsen. Those circumstances, if we are in need
of funds to repay indebtedness, could force us to liquidate one or more
investments in properties at times that may not permit realization of the
maximum return on those investments.

   The foregoing risks associated with our debt obligations may inhibit our
ability to raise capital in both the public and private markets and may have a
negative impact on our credit rating.

Executive Officers of the Registrant

   Set forth below are the names, ages and certain other information
concerning the executive officers of Wyndham:

   Fred J. Kleisner is the Chairman of the Board and Chief Executive Officer
of Wyndham. He has served as Chairman of the Board of Wyndham since October
13, 2000 and as Chief Executive Officer of Wyndham since March 27, 2000. From
August 1999 to October 2000, Mr. Kleisner served as Wyndham's President. From
August 1999 to March 2000, Mr. Kleisner also served as the Company's Chief
Operating Officer. From March 1998 to August 1999, he was President and Chief
Operating Officer of The Americas for Starwood Hotels & Resorts Worldwide,
Inc. His experience in the industry also includes senior positions with Westin
Hotels and Resorts, where he was President and Chief Operating Officer from
1995 to 1998; Interstate Hotels, where he was Executive Vice President and
Group President of Operations from 1990 to 1995; The Sheraton Corporation,
where he was Senior Vice President, Director of Operations, North America
Division-East from 1985 to 1990; and Hilton Hotels, where for 16 years he
served as General Manager of several landmark hotels, including The Waldorf
Astoria and The Waldorf Towers in New York, The Capital Hilton in Washington,
D.C., and The Hilton Hawaiian Village in Honolulu. Mr. Kleisner, who holds a
B.A. degree in Hotel Management from Michigan State University, completed
advanced studies at the University of Virginia and Catholic University of
America. Mr. Kleisner is 56 years old.

   Ted Teng joined Wyndham in May 2000 as Chief Operating Officer. He assumed
the additional title of President in October of 2000. He oversees the
Company's core branded hotel products--Wyndham Hotels & Resorts, Wyndham
Luxury Resorts and Summerfield Suites by Wyndham HotelsTM--as well as the
Performance Hospitality Management Division, the Asset Management Division and
procurement. He previously served as President, Asia Pacific, for Starwood
Hotels & Resorts Worldwide, Inc. from April 1998 to May 2000, where he oversaw
the integration of that company's branded hotel operations in the region, and
the operating and financial performance of over 70 hotels and resorts in 17
countries. From July 1996 to April 1998, Mr. Teng served as the President of
Asia-Pacific for Westin Hotels. Prior to this time, he served for 14 years in
a variety of senior and strategic capacities with ITT Sheraton. Mr. Teng
graduated from the Cornell University School of Hotel Administration and holds
an M.B.A. from the University of Hawaii. Mr. Teng is 45 years old.

                                      16
<PAGE>

   Rick Smith was named Executive Vice President and Chief Financial Officer
in April 2000 and is responsible for the Company's finance strategy and
operations. Mr. Smith joined Wyndham in September 1999 as Senior Vice
President and Treasurer, overseeing capital market activity, corporate banking
relationships, cash management, risk management and debt compliance. He came
to the Company from Starwood Hotels & Resorts Worldwide, Inc., where he served
as Vice President, Corporate Finance from 1996 to 1999. He previously worked
for Atlantic Richfield Company and Coopers & Lybrand LLP. Mr. Smith is a
certified public accountant. He graduated from the University of Tennessee
where he received a B.S. in accounting and business law. Mr. Smith is 38 years
old.

   Michael A. Grossman has served as Executive Vice President of Wyndham and
divisional president of the management services division of the Company since
January 1998. From 1977 to 1993, Mr. Grossman owned and operated Grossman and
Associates, a hotel management company. Mr. Grossman joined Patriot American
Hospitality L.P. in August 1993 as a Senior Vice President heading up its
hotel division. Mr. Grossman was subsequently appointed Chief Operating
Officer of Gencom American Hospitality, which initially served as a third
party manager for Patriot and was subsequently acquired by Patriot. Mr.
Grossman holds a B.B.A. from the University of Texas and a J.D. from Southern
Methodist University. Mr. Grossman is 48 years old.

   Dave Johnson became Executive Vice President, Sales and Marketing, in March
2000. He previously served as president of the Wyndham hotel division from
August 1999 to March 2000, and president of the Wyndham Garden division from
January 1998 to August 1999. Prior to these positions, Mr. Johnson was Senior
Vice President of Operations for the Eastern United States. His career began
with Wyndham Hotel and Resorts in 1987 as Director of Sales & Marketing. Dave
Johnson holds a B.A. and M.A. from Northeastern Illinois University. Mr.
Johnson is 39 years old.

ITEM 3. LEGAL PROCEEDINGS

   On or about February 3, 1999, McNeill Investment Company, Inc. ("MIC")
commenced an action against Patriot in the United States District Court for
the Western District of Pennsylvania alleging a breach by Patriot of its
obligations under a Registration Rights and Shareholders Agreement dated
August 6, 1997, as amended July 15, 1998. Pursuant to a settlement agreement
between Patriot and MIC, dated May 17, 2000: (i) the action was dismissed with
prejudice; (ii) Patriot paid to MIC $3 million without any admission of
liability or acknowledgement of truth or validity of any claims asserted in
the action; (iii) Patriot and MIC exchanged mutual releases; and (iv)
depending upon the highest rolling 30-day average per share last sales price
for Patriot stock between May 9, 2000 and May 8, 2001, MIC may be required to
pay to Patriot up to $750,000.

   On May 7, 1999, Doris Johnson and Charles Dougherty filed a lawsuit in the
Northern District of California against Patriot, Old Wyndham, their respective
operating partnerships and Paine Webber Group, Inc. This action, Johnson v.
Patriot American Hospitality, Inc., et al., No. C-99-2153, was commenced on
behalf of all former holders of Bay Meadows stock during a class period from
June 2, 1997 to the date of filing. The action asserts securities fraud claims
and alleges that the purported class members were wrongfully induced to tender
their shares as part of the Patriot/Bay Meadows merger based on a fraudulent
prospectus. The action further alleges that defendants continued to defraud
shareholders about their intentions to acquire numerous hotels and saddle
Patriot and Old Wyndham with massive debt during the class period. Three other
actions against the same defendants subsequently were filed in the Northern
District of California: (i) Ansell v. Patriot American Hospitality, Inc., et
al., No. C-99-2239 (filed May 14, 1999), (ii) Sola v. Paine Webber Group,
Inc., et al., No. C-99-2770 (filed June 11, 1999), and (iii) Gunderson v.
Patriot American Hospitality, Inc., et al., No. C 99-3040 (filed June 23,
1999). Another action with substantially identical allegations, Susnow v.
Patriot American Hospitality, Inc., et al., No. 3-99-CV1354-T (filed June
15,1999), also subsequently was filed in the Northern District of Texas. By
order of the Judicial Panel on Multidistrict Litigation, these actions along
with certain actions identified below have been consolidated in the Northern
District of California for consolidated pretrial purposes. On or about October
13, 2000, the defendants moved to dismiss the actions. The Court heard
arguments on motions to dismiss the actions on December 14, 2000 but has not
yet rendered a decision. Wyndham intends to defend the suits vigorously.

                                      17
<PAGE>

   On or about June 22, 1999, a lawsuit captioned Levitch v. Patriot American
Hospitality, Inc., et al., No. 3-99-CV1416-D, was filed in the Northern
District of Texas against Patriot, Old Wyndham, James D. Carreker and Paul A.
Nussbaum. This action asserts securities fraud claims and alleges that, during
the period from January 5, 1998 to December 17, 1998, the defendants defrauded
shareholders by issuing false statements about Patriot and Old Wyndham. The
complaint was filed on behalf of all shareholders who purchased Patriot and
Old Wyndham stock during that period. Three other actions, Gallagher v.
Patriot American Hospitality, Inc., et al., No. 3-99-CV1429-L, filed on June
23, 1999, David Lee Meisenburg, et al. v. Patriot American Hospitality, Inc.,
Wyndham International, Inc., James D. Carreker, and Paul A. Nussbaum Case No.
3-99-CV1686-X, filed July 27, 1999 and Deborah Szekely v. Patriot American
Hospitality, Inc., et al. No. 3-99-CV1866-D, filed on or about August 27,
1999, allege substantially the same allegations. By orders of the Judicial
Panel on Multidistrict Litigation, these actions have been consolidated with
certain other shareholder actions and transferred to the Northern District of
California for consolidated pre-trial purposes. On or about October 20, 2000,
the defendants moved to dismiss the actions. The Court heard arguments on
motions to dismiss the actions on December 14, 2000 but has not yet rendered a
decision. Wyndham intends to defend the suits vigorously.

   Wyndham has received a draft complaint which threatens to assert claims on
behalf of Golden Door, LLC, Golden Springs, LLC, Golden Door, Inc., Deer
Springs Ranch, LLC, Deborah Szekely and Sarah Livia Brightwood. The potential
plaintiffs appear to be the same as the plaintiffs who filed the action
referenced above, Deborah Szekely v. Patriot American Hospitality, Inc.,
etal., No. 3-99-CV1866-D, however the allegations of the complaints are not
the same. The draft complaint purports to assert claims against Patriot,
Wyndham and their respective operating partnerships for securities fraud under
California securities code, common law fraud, breach of fiduciary duty and
deceit in connection with the purchase by Patriot of the Golden Door Spa in
February 1998. The draft complaint seeks compensatory damages for the alleged
lost value of the potential plaintiff's stock and other unspecified damages.
Although the Company has received a draft complaint, to date no complaint has
been filed.

   Patriot and PAH Stanley Ranch ("PAH") are engaged in a dispute with
Carneros Valley Investors involving a contract which calls for a purchase
price of $14 million with an additional $5 million to be paid if PAH gets
approval for a development in the Napa Valley. PAH did not get approval for
this development. In September 1999, Carneros Valley Investors filed a
complaint in the Superior Court of California, San Francisco, which alleges
that Patriot owes Carneros Valley Investors $5 million and alleges that
Patriot acted negligently, fraudulently and in bad faith in attempting to get
the approval for the development. The complaint has been amended to allege
fraud, purportedly entitling the plaintiff to rescind the sale. Patriot has
answered the complaint, but to date, no discovery had been taken. The dispute
was settled with the assistance of, and in connection with the sale of the
subject property to, a third party. The sale was consummated, the dispute was
settled and mutual releases were exchanged on November 30, 2000, and the
above-referenced lawsuit was formally dismissed prior to December 31, 2000.

   On or about October 26, 2000, a demand for arbitration was filed on behalf
of John W. Cullen, IV, William F. Burruss, Heritage Hotel Management &
Investment Ltd. And GH-Resco, L.L.C. naming Wyndham International, Inc. f/k/a
Patriot American Hospitality, Inc. as respondent. The Demand for Arbitration
claims that the claimants and Wyndham are parties to a Contribution Agreement
dated February 28, 1997 and that Wyndham is in breach of that agreement.
Claimants assert that Wyndham breached its agreement to pay respondents
additional consideration under the Contribution Agreement by, among other
things, allegedly denying claimants compensation due to them in connection
with various transactions initiated by claimants and provided to Wyndham,
which allegedly provided Wyndham with growth and added revenue. In addition,
claimants assert that Wyndham failed to provide claimants with various other
amounts due under the Contribution Agreement, failed to indemnify claimants
for certain expenses and intentionally and negligently mismanaged Wyndham's
business. Claimants do not specify the amount of damages sought. Wyndham has
moved to stay the arbitration. To date, Wyndham has not responded to the
Demand for Arbitration. Wyndham intends to defend the claims vigorously.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   None.

                                      18
<PAGE>

                                    PART II

ITEM 5. MARKET PRICE FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

Market Information

   The following table sets forth the quarterly high and low sale prices per
share as reported on the New York Stock Exchange ("NYSE") of Wyndham class A
common stock (symbol "WYN") from June 30, 1999. Prior to June 30, 1999, the
paired shares were reported on the NYSE under the symbol "PAH".

<TABLE>
<CAPTION>
                                                                      Per Share
                                                       High    Low    Dividend
                                                      ------- ------- ---------
<S>                                                   <C>     <C>     <C>
1999:
  First Quarter...................................... $  7.00 $4.4375   $ --
  Second Quarter..................................... $  5.50 $  4.00   $ -- (1)
  Third Quarter...................................... $ 4.875 $ 2.625   $ --
  Fourth Quarter..................................... $ 3.875 $2.4375   $ --
2000:
  First Quarter...................................... $2.9375 $  1.75   $ --
  Second Quarter..................................... $ 2.625 $1.6875   $ --
  Third Quarter...................................... $  2.50 $1.6875   $ --
  Fourth Quarter..................................... $2.0625 $1.3125   $ --
</TABLE>
--------
(1) On June 18, 1999 there was a spin-off of IHC. Each record holder as of
    June 7, 1999 received one share of newly issued IHC stock for every 30
    shares held of Patriot common stock, Patriot series A preferred stock, Old
    Wyndham series A and B preferred stock, Patriot American Hospitality
    Partnership L.P. common and preferred limited partnership units, and
    Wyndham International L.P. class A and class C preferred limited
    partnership units.

Holders

   As of March 19, 2001, there were approximately 1,500 record holders of the
Company's shares of class A common stock, including shares held in "street
name" by nominees who are record holders, and approximately 19,000
shareholders.

Dividends

   The Company does not anticipate paying a dividend to its common
shareholders and is prohibited under the terms of its credit facility and term
loans from paying dividends on its common stock. However, for the six year
period beginning September 30, 1999, dividends on Wyndham's series A and
series B convertible preferred stock are structured to ensure an aggregate
fixed cash dividend payment of $29.25 million per year, so long as there is no
redemption or conversion of the preferred stock; therefore, for that period,
dividends are payable partly in cash and partly in additional shares of
preferred stock. For the following four years, dividends are payable in cash
or additional shares of series A or series B convertible preferred stock, as
the case may be, as determined by the Board of Directors. After year ten,
dividends are payable solely in cash.

Recent Sales of Unregistered Securities

   None

                                      19
<PAGE>

ITEM 6. SELECTED FINANCIAL INFORMATION

   The following tables set forth selected consolidated historical financial
information for the Company. The following financial information should be
read in conjunction with, and is qualified in its entirety by, the historical
financial statements and notes thereto of the Company included elsewhere in
this Annual Report on Form 10-K. The selected financial and other data for the
Company for 2000 and 1999 has been derived from the consolidated financial
statements of the Company audited by PricewaterhouseCoopers LLP, independent
accountants.

                             WYNDHAM INTERNATIONAL
           Selected Condensed Consolidated Historical Financial Data

<TABLE>
<CAPTION>
                                          Year Ended December 31,
                          ------------------------------------------------------------
                             2000        1999         1998         1997        1996
                          ----------  -----------  -----------  -----------  ---------
                                   (in thousands, except per share data)
<S>                       <C>         <C>          <C>          <C>          <C>
Operating Data:
Total revenue...........  $2,498,595  $ 2,495,335  $ 2,056,341  $   335,035  $  76,493
(Loss) income before
 income tax provision,
 minority interests and
 extraordinary item.....    (523,014)    (491,335)    (112,508)       4,142     44,813
(Loss) income before
 extraordinary item.....    (324,671)  (1,062,131)    (126,406)         362     37,991
Net (loss) income.......  $ (324,671) $(1,071,969) $  (158,223) $    (2,172) $  37,991
Per Share Data (1):
Basic earnings per
 share:
 (Loss) income before
  extraordinary item....  $    (2.56) $     (7.02) $     (1.13) $      0.01  $    0.84
 Extraordinary item,
  net of minority
  interest..............         --         (0.06)       (0.23)       (0.04)       --
                          ----------  -----------  -----------  -----------  ---------
 Net (loss) income per
  share.................  $    (2.56) $     (7.08) $     (1.36) $     (0.03) $    0.84
                          ==========  ===========  ===========  ===========  =========
 Diluted (loss) earnings
  per share (2), (3)....  $    (2.56) $     (7.20) $     (2.57) $     (0.03) $    0.83
                          ==========  ===========  ===========  ===========  =========
 Dividends per share
  (4)...................  $       --  $        --  $    1.0362  $    1.0878  $  0.9154
                          ==========  ===========  ===========  ===========  =========
Cash Flow Data:
Cash provided by
 operating activities...  $  246,838  $   202,302  $   244,493  $   108,110  $  61,196
Cash provided by (used
 in) investing
 activities.............      37,272     (356,564)  (2,107,223)  (1,202,124)  (419,685)
Cash (used in) provided
 by financing
 activities.............    (383,397)     181,889    1,940,635    1,134,846    360,324
<CAPTION>
                                             As of December 31,
                          ------------------------------------------------------------
                             2000        1999         1998         1997        1996
                          ----------  -----------  -----------  -----------  ---------
                                               (in thousands)
<S>                       <C>         <C>          <C>          <C>          <C>
Balance Sheet Data:
Investment in real
 estate and
 assets held for sale at
 cost, net..............  $4,711,495  $ 5,413,178  $ 5,585,616  $ 2,044,649  $ 641,825
Total assets............   6,066,899    7,003,490    7,415,670    2,507,853    760,931
Total debt..............   3,398,950    3,643,556    3,857,521    1,112,709    214,339
Minority interest in the
 Operating
 Partnerships...........      21,416       22,435      253,970      220,177     68,562
Minority interest in
 consolidated
 subsidiaries...........     164,906      166,483      229,537       49,694     11,711
Shareholders' equity....   1,794,187    2,137,662    2,603,037      989,892    437,039
<CAPTION>
                                          Year Ended December 31,
                          ------------------------------------------------------------
                             2000        1999         1998         1997        1996
                          ----------  -----------  -----------  -----------  ---------
                                               (in thousands)
<S>                       <C>         <C>          <C>          <C>          <C>
Other Data:
Weighted average number
 of
 shares outstanding.....     167,308      161,255      137,764       64,260     45,997
Ratio of (losses)
 earnings to fixed
 charges................       (0.39)       (0.36)        0.59         1.08       7.00
Deficiency of earnings
 to fixed charges.......     523,014      491,335      112,508          --         --
</TABLE>

                                      20
<PAGE>

Notes to Selected Financial Information

(1) On January 30, 1997, the Patriot Board of Directors declared a 2-for-1
    stock split effected in the form of a stock dividend on March 18, 1997 to
    stockholders of record on March 7, 1997. On July 1, 1997, by operation of
    the Cal Jockey Merger, each issued and outstanding share of Patriot common
    stock was converted into 0.51895 paired shares. In addition, on July 10,
    1997, the respective Boards of Directors of Patriot and Old Wyndham
    declared a 1.927-for-1 stock split on their shares of common stock
    effected in the form of a stock dividend distributed on July 25, 1997 to
    stockholders of record on July 15, 1997. All references herein to the
    number of shares, per share amounts and market prices of the paired shares
    and options to purchase paired shares have been restated to reflect the
    impact of the Cal Jockey Merger and the above-described stock splits, as
    applicable.

  In addition, in February 1997, the Financial Accounting Standards Board
  issued Statement of Financial Accounting Standards No. 128 "Earnings Per
  Share" ("Statement 128"). Statement 128 specifies the computation,
  presentation and disclosure requirements for basic earnings per share and
  diluted earnings per share. The earnings per share amounts presented herein
  have been restated to reflect the impact of Statement 128.

  On December 22, 1998, Patriot declared a stock dividend of $0.44 per share
  of common stock for the fourth quarter of 1998. The dividend was paid on
  January 25, 1999 to shareholders of record on December 30, 1998. Each
  shareholder had the option to receive the dividend in the form of
  additional paired shares or shares of Series B Cumulative Perpetual
  Preferred Stock, par value $0.01 per share, of Patriot. Earnings per common
  share, weighted average shares outstanding and all stock option activity
  have been restated to reflect the stock dividend.


  On June 30, 1999, a subsidiary of Old Wyndham was merged with and into
  Patriot and Patriot became a wholly-owned subsidiary of Wyndham. The
  pairing arrangement was terminated and each outstanding paired share was
  converted into a share of Wyndham class A common stock.

(2) For 2000, the dilutive effect of unvested stock grants of 645,000, the
    option to purchase 104,000 shares of common stock and 129,073,000 shares
    of preferred stock were not included in the computation of diluted
    earnings per share for the year ended December 31, 2000 because they are
    anti-dilutive. For 1999, the dilutive effect of unvested stock grants of
    803,000, the option to purchase 59,000 shares of common stock and
    64,367,000 shares of preferred stock were not included in the computation
    of diluted earnings per share for the year ended December 31, 1999 because
    they are anti-dilutive. For 1998, the dilutive effect of unvested stock
    grants of 880,000, the option to purchase 753,000 shares of common stock
    and shares issued in connection with forward equity contracts of 2,507,000
    and 6,613,000 of preferred shares were not included in the computation of
    diluted earnings per share for the year ended December 31, 1998 because
    they are anti-dilutive.

(3) For 2000, options to purchase 12,157,000 shares of common stock at prices
    ranging from $2.0625 to $30.40 were outstanding but not included in the
    computation because the options' exercise prices were greater than the
    average market price of the common shares and, therefore, the effect would
    be anti-dilutive. For 1999, options to purchase 9,702,000 shares of common
    stock at prices ranging from $4.75 to $30.40 were outstanding but not
    included in the computation because the options' exercise prices were
    greater than the average market price of the common shares and therefore
    the effect would be anti dilutive. For 1998, options to purchase 4,650,000
    shares of common stock at prices ranging from $19.45 to $33.58 were
    outstanding but not included in the computation because the options'
    exercise price was greater than the average market price of the common
    shares and therefore the effect would be anti-dilutive.

(4) Dividends for the year ended 1998 include a $0.44 stock dividend.
    Dividends paid for the year ended December 31, 1997 include a special
    dividend of $0.06 per share paid by Patriot's predecessor on June 30,
    1997. To maintain its qualification as a REIT prior to consummation of the
    Cal Jockey Merger, Patriot was required to distribute to its stockholders
    any undistributed "real estate investment trust taxable income" for its
    short taxable year ending with the consummation of the Cal Jockey Merger.
    Old Wyndham did not pay any dividends for the six months ended December
    31, 1997.

                                      21
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS

   Certain statements in this Form 10-K constitute "forward-looking
statements" as that term is defined under (S)21E of the Securities Exchange
Act of 1934, as amended, and the Private Securities Litigation Reform Act of
1995. The words "believe", "expect", "anticipate", "intend", "estimate", and
other expressions which are predictions of or indicate future events and
trends and which do not relate to historical matters identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements. Although forward-looking statements reflect
management's good faith beliefs, reliance should not be placed on forward-
looking statements because they involve known and unknown risks, uncertainties
and other factors, which may cause the actual results, performance or
achievement of the Company to differ materially from anticipated future
results, performance or achievements expressed or implied by such forward-
looking statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new information,
future events or otherwise. Certain factors that might have an adverse effect
include, but are not limited to, risks associated with the availability of
equity or debt financing at terms and conditions favorable to the Company, the
Company's ability to effect sales of assets on favorable terms and conditions,
risks associated with the hotel industry and real estate markets in general;
risks associated with debt financing and the risks discussed above in Part I--
Business and Properties--Certain Risk Factors.

Background

 Organization

   Patriot was formed April 17, 1995 as a self-administered REIT for the
purpose of acquiring equity interests in hotel properties. On October 2, 1995,
Patriot completed an initial public offering of shares of common stock and
commenced operations. Between October 2, 1995 and July 1, 1997, Patriot
acquired interests in 56 hotel properties. These hotels were leased to various
third party lessees.

   On July 1, 1997, Patriot merged with and into Cal Jockey, with Cal Jockey
being the surviving legal entity, hereinafter referred to as the "Cal Jockey
merger". Cal Jockey's shares of common stock were paired and traded together
with the shares of common stock of Bay Meadows as a single unit pursuant to a
stock pairing agreement. In connection with the Cal Jockey merger, Cal Jockey
changed its name to "Patriot American Hospitality, Inc." and Bay Meadows
changed its name to "Patriot American Hospitality Operating Company".
Subsequent to December 31, 1997, as a result of the merger of Wyndham Hotel
Corporation with and into Patriot as discussed below (the "Wyndham merger"),
Patriot American Hospitality Operating Company changed its name to "Wyndham
International, Inc." and is referred to herein, collectively with its
subsidiaries, as "Old Wyndham".

   Subsequent to the Cal Jockey merger through December 31, 1998, the Company
went through a series of mergers and acquisitions including the Wyndham
merger, the merger with WHG Casinos & Resorts Inc. ("WHG") and the acquisition
of partners' interests, the merger with Arcadian International ("Arcadian"),
the Summerfield acquisition, the merger with CHCI International Inc. ("CHCI")
and the merger with Interstate.

   Effective June 30, 1999, a subsidiary of Old Wyndham merged with and into
Patriot with Patriot being the surviving entity and becoming a subsidiary of
Old Wyndham. In connection with this restructuring, the pairing agreement
between Patriot and Old Wyndham was terminated, Patriot's status as a REIT
terminated effective January 1, 1999, and Patriot became a taxable corporation
as of that date. This merger converted each previously outstanding paired
share into one share of Wyndham class A common stock. Old Wyndham and its
subsidiaries, which now include Patriot, is hereafter referred to as Wyndham
or the Company.

   The restructuring was reflected as a reorganization of two companies under
common control and was accounted for in a manner similar to that used in
pooling of interest accounting. As such, there was no revaluation of the
assets and liabilities of Old Wyndham or Patriot. The financial statements
prior to the reorganization are presented on a combined basis and include the
combined accounts of Patriot and its subsidiaries with Old Wyndham and its
subsidiaries.

                                      22
<PAGE>

 Restructuring

   During 1999, the Company recorded a restructuring charge of $285.3 million
as a result of the termination of the paired share structure and management's
decision to streamline its organization and focus on its core brands and
strategic assets. The restructuring activities (shown below in tabular format)
primarily relate to: (1) the termination of the paired share structure,
resulting in the write-down of the unamortized intangible asset, and
elimination of job responsibilities, resulting in the costs to sever employees
in New York and Dallas, (2) the exiting of the European market for its non-
branded assets, resulting in the write-down of assets held for sale to
estimated fair value, the write-down of goodwill, the reduction in the
European workforce, lease abandonments, and other costs necessary to reduce
the infrastructure in Arcadian International, (3) the exiting of the limited
service hotel sector, resulting in a write-down of those assets held for sale
and the write-off of management contracts, (4) the closure of the Phoenix
division office, resulting in the costs to sever employees and lease
abandonments, (5) the closure of the Wichita division office, resulting in the
costs to sever employees, and (6) the elimination of certain brands, resulting
in the write-down of those tradename intangible assets. During 2000,
continuing cash payments were made against the accrued liability as shown in
the table below. The remaining accruals will be relieved throughout fiscal
2001, as leases expire and severance payments are made.

<TABLE>
<CAPTION>
                                                      Accrued            Accrued
                                                      Balance            Balance
                                        Restructuring    at                 at
      Description         Cash/Non-Cash    Charge     12/31/99  Activity 12/31/00
      -----------         ------------- ------------- --------  -------- --------
<S>                       <C>           <C>           <C>       <C>      <C>
                                              (in thousands)
Organizational
 Restructuring
Write-down of intangible
 assets.................  Non-cash        $ (83,094)      --        --      --
Severance packages......  Cash/non-cash      (4,675)     (500)      250    (250)
Downsizing European
 division
Write-down of assets
 held for sale..........  Non-cash          (69,491)      --        --      --
Write-down of intangible
 assets.................  Non-cash          (28,394)      --        --      --
Severance packages......  Cash               (3,578)   (2,458)    2,396     (62)
Lease cancellations and
 commitments............  Cash               (1,907)   (1,907)    1,818     (89)
Other exit costs........  Cash               (4,062)   (2,408)    2,287    (121)
Exiting limited service
 market sector
Write-down of assets
 held for sale..........  Non-cash          (63,328)      --        --      --
Write-down of intangible
 assets.................  Non-cash           (8,834)      --        --      --
Closing the Phoenix
 division office
Severance packages......  Cash               (2,006)     (312)      312     --
Lease cancellations and
 other commitments......  Cash                 (492)     (321)      321     --
Closing of the Wichita
 division office
Severance packages......  Cash               (1,872)   (1,872)    1,872     --
Elimination of certain
 hotel brands
Write-down of intangible
 assets.................  Non-cash          (12,821)      --        --      --
Other
Other Exit Costs........  Cash                 (713)      --        --      --
Effect of foreign
 currency translation...                        --          8        10      18
                                          ---------   -------    ------   -----
  Total.................                  $(285,267)  $(9,770)   $9,266   $(504)
                                          =========   =======    ======   =====
</TABLE>

   During 2000, the Company continued with its plan to dispose of non-
strategic and non-proprietary branded hotels. During 2000, the Company sold
26 hotel properties, including the Clubhouse Inn brand, and received net cash
proceeds of approximately $175.0 million, after the repayment of mortgage debt
of $70.4 million. The Company also sold investments in three hotels, two
parcels of land, retail space and a garage and received net cash proceeds of
$61.4 million after the repayment of debt of $7.8 million and a note
receivable of $4.3 million.

   The Company also sold the Sierra Suites hotel brand, one owned and three
leased properties, 17 franchise and management contracts for Sierra Suites and
nine management contracts for Summerfield Suites for

                                      23
<PAGE>

approximately $53 million. The Company received net cash proceeds of $23.0
million and was relieved of $29.8 million of future obligations. In addition
Wyndham agreed to the redemption of its aggregate 55% non-voting economic
interest in IH LLC. Approximately 9% of the Wyndham Interest was redeemed by
IH LLC and substantially all of the remainder was converted into a preferred
membership interest in IH LLC.

   As of December 31, 2000, the Company had 177 owned and leased hotels with
45,700 guestrooms as compared to 204 owned and leased hotels with over
49,600 guestrooms at December 31, 1999. This reduction primarily results from
the sale of 27 owned hotels and three leased hotels offset by the acquisition
of one owned hotel and two leased properties. As of December 31, 2000, the
Company managed 35 and franchised 30 hotels as compared to 88 managed and
11 franchised hotels at December 31, 1999.

Results of Operations: Year Ended December 31, 2000 Compared with Year Ended
December 31, 1999

   Hotel revenues were $2,421,603,000 and $2,409,046,000 for the years ended
December 31, 2000 and 1999, respectively. Although hotel revenues remained
relatively stable between periods, increases during the year ended
December 31, 2000 from acquisitions, assets placed in service, and increases
in RevPAR throughout the Company's portfolio were offset by the asset sales
during the year and the spin-off of Interstate Hotel Corporation (the
"Interstate spin-off") on June 18, 1999.

   Hotel expenses were $1,747,601,000 and $1,772,724,000 for the years ended
December 31, 2000 and 1999, respectively. As with revenues, expenses remained
relatively stable between periods. The decrease in expenses resulting from
assets sales was partially offset by increases in expenses resulting from
acquisitions and new assets placed in service during the previous year.

   Management fee and service fee income was $46,028,000 and $69,278,000 for
the years ended December 31, 2000 and 1999, respectively. The decrease is
primarily the result of the loss of management contracts associated with the
Interstate spin-off, the sale of the third party management contracts in the
Sierra transaction in the first quarter of 2000, and the loss of a portfolio
of 17 management contracts during 2000. This resulted in a decrease of
management and service fee revenue of approximately $24,504,000 between years.

   Interest and other income was $30,964,000 and $11,256,000 for the years
ended December 31, 2000 and 1999, respectively. This increase was primarily
due to the recognition of a termination fee of $14,746,000 related to the
termination of 17 management contracts. In addition, the increase can also be
attributed to increases in interest income from funds held in escrow. In 1999,
certain of the funds were escrowed for only six months as the debt was not
obtained until June of 1999.

   General and administrative expenses were $97,766,000 and $178,039,000 for
the years ended December 31, 2000 and 1999, respectively. The decrease was
primarily a result of expenditures incurred in 1999, in part associated with
the reorganization, but not incurred in 2000. Those costs were as follows:

  .  $13,047,000 of strategic reorganization costs, including fees to settle
     forward equity contracts and vesting of employees' stock awards;

  .  $3,917,000 associated with the write off of bond offering costs;

  .  $5,435,000 of costs associated with the Interstate spin-off;

  .  $13,530,000 of abandoned transaction costs;

  .  $21,131,000 of costs associated with conversion costs and becoming year
     2000 compliant; and

  .  $4,695,000 associated with the write-off of receivables from a managed
     hotel in which Wyndham terminated the management contract

                                      24
<PAGE>

   In addition, in 1999 the Company incurred approximately $29,829,000 of
general and administrative expenses for divisional offices located in
Pittsburgh, Wichita, and Phoenix. As those offices were closed during 1999 and
the first quarter of 2000, minimal costs were incurred during 2000. However,
in 2000, the Company incurred approximately $12,085,000 in severance related
expenses for certain executive officers who resigned their positions in 2000.
In addition, during 2000, the Company incurred approximately $7,439,000 in
costs associated with the settlement of certain lawsuits and legal fees
related to those lawsuits.

   As discussed in Note 4 to the financial statements, the Company recorded
$285,267,000 of costs associated with the restructuring. These costs primarily
relate to the non-cash write down of assets of approximately $265,962,000 as
the Company exited from certain business sectors, and focused on its core
brands and products. In management's attempt to streamline its organization,
it closed offices in New York, London, Phoenix, and Wichita. Severance, lease
cancellation costs, legal costs and other costs to exit resulted in the
Company recording costs of $19,305,000.

   Interest expense was $371,855,000 and $353,227,000 for the years ended
December 31, 2000 and 1999, respectively. The increase in interest expense is
primarily related to higher interest rate spreads on the current credit
facility as compared to the old credit facility and higher interest rates
during 2000 as compared to 1999. The Company's derivative financial
instruments in part negated the impact of these higher rates. However, the
Company also had increases in the amortization of loan costs associated with
the amortization of the premiums for $1.5 billion in new derivatives acquired
in March 2000.

   During the year ended December 31, 2000, the Company recognized losses on
the sale of assets of $12,987,000. During the year ended December 31, 1999,
the Company recognized losses of $10,702,000 on the sale of assets.

   At December 31, 2000, the Company had classified 50 assets as held for sale
based on management having the authority and intent of entering into
commitments for sale transactions expected to close in the next twelve months.
Based on the estimated net sales proceeds, the Company recorded a reserve for
impairment for loss on real estate assets held for sale of $361,571,000. In
addition, the Company recorded a write-down for impairment of $39,654,000 on
assets held for use, $45,174,000 on management contract costs, and a reserve
for impairment of $40,259,000 on investments in unconsolidated subsidiaries
which were held for sale.

   Depreciation and amortization expense was $304,785,000 and $302,890,000 for
the years ended December 31, 2000 and 1999, respectively. The increase in
depreciation was primarily due to the increase in capital renovations during
the year, as well as the placement in service of additional assets that were
previously under development, offset in part by the asset sales that occurred
during the twelve-month period, and the placement of certain assets held for
sale.

   The Company's share of equity in earnings (losses) from unconsolidated
subsidiaries was $2,491,000 and $(7,746,000) for the years ended December 31,
2000 and 1999, respectively. The increase is due primarily from the allocation
of income from one of its investments which was in development in 1999 but in
operation in 2000. In addition, 1999 was impacted by loss allocations from one
subsidiary which resulted in the write-down of certain leaseholds.

   The benefit (provision) for income taxes was $205,912,000 and
($571,421,000) for the years ended December 31, 2000 and 1999, respectively.
The change in the provision is due to a 1999 charge of $675,000,000 due to
Patriot's conversion from a REIT to a C corporation, the restructuring of
certain special purpose controlled subsidiaries, which previously could not be
consolidated with Wyndham's taxable income or loss, and charges taken in 2000
for the impairment of certain assets held for sale.

   Minority interest's share of loss associated with the operating
partnerships was $6,642,000 for the year ended December 31, 1999. There was no
minority interest's share of the income (loss) associated with the operating
partnerships for the year ended December 31, 2000 due to amendments in the
partnership agreements at June 30, 1999 which amended the allocation of profit
and loss to the limited partners.

                                      25
<PAGE>

   In connection with the debt financing in 1999, the Company wrote off the
remaining balance of unamortized deferred financing costs associated with the
old credit facility resulting in an extraordinary loss of $9,838,000, net of
minority interest and income taxes.

   As a result, the net loss was $324.7 million and $1.07 billion for the
years ended December 31, 2000 and 1999, respectively.

Results of Operations: Year Ended December 31, 1999 Compared with Year Ended
December 31, 1998

   For the year ended December 31, 1999, hotel revenues were $2,409,046,000 as
compared to $1,842,682,000 during 1998. Of the approximate $566,364,000
increase, approximately $337,377,000 was attributable to the 1998 acquisitions
including Interstate, Summerfield, Arcadian and WHG, net of leases which were
included in the Interstate spin-off. In addition, the purchase of the
remaining third party leasehold interests, primarily CHC Lease Partners,
NorthCoast Hotels L.L.C. ("NorthCoast"), and the DTR North Canton Inc (the
"Doubletree Lessee"), in June 1998, December 1998 and January 1999 led to
increases in hotel revenue of $124,712,000 as the operations of the hotels
during 1999 were consolidated in the statement of operations, whereas in 1998,
the Company was receiving a participating rent payment. Additionally,
$25,072,000 can be attributed to the consolidation of two hotels that were
previously accounted as an equity investment.

   Hotel expenses increased from $1,360,213,000 in 1998 to $1,772,724,000 in
1999. As with revenues, the vast majority of this increase is a result of
acquisitions and the acquisition of third party leaseholds.

   The contributing factor in the decline in participating revenue from
$58,440,000 during the year ended December 31, 1998 to $1,194,000 for the same
period in 1999 was the acquisition of the third party leaseholds discussed
above.

   Management fee and service fee income was $69,278,000 in 1999 compared to
$89,067,000 in 1998. The decrease is primarily the result of a decrease in
incentive fee income associated with 17 management contracts which were
renewed in 1998 with no provision to earn incentives fees, and management
contracts lost during the period. This was partially offset by the acquisition
of third party management contracts acquired in June 1998 and the Interstate
management contracts also acquired in June 1998, but were included in the
Interstate spin-off on June 18, 1999.

   Interest and other income was $11,256,000 in 1999 as compared to
$14,893,000 in 1998. The decrease resulted from a management termination fee
of $2,950,000 in 1998.

   Total revenues from the racecourse facility operations (including interest
and other income) were $4,561,000 for 1999 compared to $51,259,000 in 1998.
Total costs and expenses associated with the racecourse operations (included
marketing costs, and general and administrative expenses) were $3,867,000 for
1999 compared to $43,198,000 for 1998. These decreases are due to the sale of
Bay Meadows racecourse effective February 1999.

   General and administrative expenses were $178,039,000 for 1999 compared to
$109,325,000 for 1998. In part, the increase is due to the overhead required
due to the growth in the portfolio of owned, managed and leased hotels during
1998. However, the significant portion of the increase was due to the
following factors:

   As a result of the $1 billion equity investment, the Company incurred
$13,047,000 of strategic reorganization costs, including fees to settle the
forward equity contracts, and the acceleration of vesting of certain
employees' stock awards. The reorganization resulted in work associated with a
high yield bond offering and a bond offering in Puerto Rico to cease,
resulting in a write-off of costs associated with the offerings totaling
$3,917,000 and $13,530,000 in other abandoned transaction costs.

   The Company also incurred $5,435,000 of costs associated with the spin-off
of Interstate's third-party management business, $21,131,000 with costs
associated with becoming Year 2000 compliant and conversion costs, and
$4,695,000 in bad debt expense for the write-off of receivables from a hotel
that Wyndham no longer manages.

                                      26
<PAGE>

   Interest expense for 1999 was $353,227,000 as compared to $260,103,000 for
1998. The increase is due in part to the closing of $1.45 billion in debt in
June of 1998 for the merger with Interstate. Secondly, as a result of
extending certain maturities of the credit facilities, Wyndham paid
$11,700,000 in fees, which were amortized and included in interest expense.
Finally, Wyndham assumed and incurred additional debt in order to finance the
Summerfield, Interstate and Arcadian transactions during 1998.

   Cost of acquiring license agreements and leaseholds was $1,296,000 for 1999
as compared to $64,407,000 for 1998. This decrease is primarily due to the
prior year amount including the purchase of 17 leasehold interest acquired in
connection with the CHCI merger.

   The Company recognized a loss on the sale of assets of $10,702,000 based on
the excess book value over the cash proceeds received in the sale as compared
to $9,453,000 in the prior year.

   For the year ended December 31, 1999, the Company recognized approximately
$70,912,000 of impairment losses related to assets held for sale. In 1998, the
Company recognized approximately $51,081,000 of impairment losses. In
accordance with SFAS No. 121, when management identifies an asset held for
sale a fair value is estimated. If the fair value of the asset is less than
the carrying value amount, a reserve for impairment is established.

   As discussed in Note 4 to the financial statements, the Company recorded
$285,267,000 of costs associated with the restructuring. These costs primarily
relate to the non-cash write down of assets of approximately $265,962,000 as
the Company exited from certain business sectors, and focused on its core
brands and products. In management's attempt to streamline its organization,
it closed offices in New York, London, Phoenix, and Wichita. Severance, lease
cancellation costs, legal costs and other costs to close these offices
resulted in the Company recording costs of $19,305,000.

   Depreciation and amortization expense was $302,890,000 for the year ended
December 31, 1999 compared to $231,233,000 for the year ended December 31,
1998. A significant number of assets were acquired in 1998 as a result of the
mergers and acquisition as discussed, and therefore twelve months of
depreciation is not reflected in 1998 as compared to 1999. Of the $71,657,000
increase, $34,817,000 of depreciation was attributable to the significant
transactions which occurred during 1998, which included Arcadian in April
1998, and Summerfield, CHCI and Interstate in June 1998. The remaining
increase is due to depreciation on renovations at the hotels which were under
construction in 1998, but in service in 1999 as well as full year amortization
of goodwill and other intangible assets in 1999 for those intangibles acquired
in the mergers during 1998.

   The Company's share of losses from unconsolidated subsidiaries was
$7,746,000 for the year ended December 31, 1999 as compared to income of
$9,498,000 for the year ended December 31, 1998. The decrease is primarily a
result of two hotels, no longer being accounted for as equity investments. In
June 1999, Wyndham acquired the 1% controlling interest in these hotels, and
they are now being accounted for on a consolidated basis. In addition, the
decrease is due to the allocation of losses from the Company's approximate
55% investment in Interstate.

   The provision for income taxes increased from $17,122,000 for 1998 to
$571,421,000 for 1999. The increase is primarily due to the $675,000,000
charge recorded during June 1999 due to Patriot converting from a REIT to a C
corporation, and the operations of certain special purpose controlled
subsidiaries which separately report and pay taxes on their taxable income.
For federal income tax purposes, the taxable income from these subsidiaries
cannot be consolidated with Wyndham's taxable income or loss and hence cannot
be offset by operating losses created at the Wyndham Partnership.
Additionally, the provision was decreased by benefits recorded in conjunction
with certain restructuring changes taken during 1999.

   Minority interest's share of loss associated with the Operating
Partnerships was $6,642,000 for the year ended December 31, 1999 as compared
to $12,651,000 for 1998 due to increased losses in the Operating Partnerships
prior to the amendments in the partnership agreements on June 30, 1999.

                                      27
<PAGE>

   Minority interest's share of income in other consolidated subsidiaries were
$6,017,000 in 1999 as compared to $9,427,000 in 1998. This reduction in
minority interest's share of income is due primarily to the acquisition of the
outside interests in nine hotels.

   For the year ended 1998, certain debt obligations of Old Wyndham,
Interstate and Summerfield were repaid upon the merger and acquisition of
these entities. In addition, certain debt of WHG was refinanced in 1998. As a
result, Wyndham incurred certain prepayment penalties and wrote off the
remaining balance of unamortized deferred financing costs associated with such
debt, resulting in an extraordinary loss of $31,817,000, net of minority
interest and income taxes. In connection with the new debt financing in 1999,
Wyndham wrote off the remaining balance of unamortized deferred financing
costs associated with the old credit facility, resulting in an extraordinary
loss of $9,838,000, net of minority interest and income taxes.

   As a result, the net loss was $1,071,969,000 for 1999 and $158,223,000 for
1998.

Results of reporting segments

   The Company's results of operations are classified into seven reportable
segments. Those segments include Wyndham Hotel & Resorts(R), Wyndham Luxury
Resorts, Wyndham Gardens(R), Summerfield Suites by Wyndham(TM), other
proprietary branded hotel properties, non-proprietary branded properties and
other. Prior years reportable segments have been restated to conform to
current year presentation.

  For the year ended December 31, 2000 compared with the year ended December
31, 1999

   Wyndham Hotels & Resorts(R) represented approximately 45.1% and 39.8% of
total revenue for the years ended December 31, 2000 and 1999, respectively.
Total revenue was $1,128,073,000 compared to $992,353,000 years ended
December 31, 2000 and 1999, respectively. Operating income was $293,380,000
compared to $244,435,000 for the years ended December 31, 2000 and 1999,
respectively. The increases in revenues and operating income can be primarily
attributed to the acquisition of four Wyndham branded hotels in late 1999 and
early 2000 and the stabilization of revenues in 2000 for an additional two
flagship hotels which opened during 1999. The revenue increase attributed to
these six hotels was $96,109,000. This segment also had strong improvement in
both occupancy and ADR for the year ended December 31, 2000 as compared to
1999.

   Wyndham Luxury Resorts represented approximately 4.1% and 3.9% of total
revenue for the years ended December 31, 2000 and 1999, respectively. Total
revenue was $103,654,000 compared to $97,422,000 for the years ended
December 31, 2000 and 1999, respectively. Operating income was $26,907,000
compared to $22,050,000 for the same periods, respectively. The increases in
revenues and operating income can be attributed in large part to an increase
in ADR of 2.0% and occupancy of 1.8%.

   Wyndham Gardens(R) represented approximately 3.4% and 3.7% of total revenue
for the years ended December 31, 2000 and 1999, respectively. Total revenue
was $84,730,000 compared to $92,776,000 for the years ended December 31, 2000
and 1999, respectively. Operating income was $15,689,000 compared to
$23,044,000 for the same periods respectively. Decreases in both revenue and
operating income were due primarily to the sale of six Wyndham Garden hotels
in June 2000.

   Summerfield Suites by Wyndham(TM) represented approximately 5.7% as
compared to 5.3% of total revenue for the years ended December 31, 2000 and
1999, respectively. Total revenue was $142,442,000 compared to $132,772,000
for the years ended December 31, 2000 and 1999, respectively. Operating income
was $29,519,000 compared to $26,785,000 for the same periods, respectively.
Increases in revenues and operating results were primarily due to the opening
of a new hotel in Miami during late 1999, and overall increases in ADR of 2.0%
and occupancy of 2.4%.

   Other proprietary branded properties, including Malmaison, Sierra Suites,
Clubhouse and hotels acquired in the Arcadian acquisition, represented
approximately 1.6% and 4.1% of total revenue for the years ended

                                      28
<PAGE>

December 31, 2000 and 1999, respectively. Total revenue was $41,197,000
compared to $101,796,000 for the years ended December 31, 2000 and 1999,
respectively. Operating income for these properties was $11,955,000 and
$27,680,000 for the years ended December 31, 2000 and 1999, respectively. The
decrease in both revenues and operating income was primarily a result of the
sale of 11 hotels in December 1999 acquired in the Arcadian acquisition, the
sale of the Sierra branded leaseholds in March 2000, the sale of the Clubhouse
branded hotels in June 2000, and the sale of the Malmaison hotels in November
2000. As of December 31, 2000, only one hotel remains in this segment.

   Non-proprietary branded properties, including Hilton(R), Holiday Inn(R),
Marriott(R), Ramada(R), Radisson(R), and other major hotel franchises,
represented approximately 36.9% and 39.8% of total revenue for the years ended
December 31, 2000 and 1999, respectively. Total revenue was $921,507,000
compared to $991,927,000 for the years ended December 31, 2000 and 1999,
respectively. Operating income for these properties was $248,036,000 and
$240,028,000 for the years ended December 31, 2000 and 1999, respectively. The
decrease in revenue is due primarily to the spin-off of several leases in
connection with the Interstate spin-off on June 18, 1999, as well as the sale
of non-proprietary branded assets throughout the year. Total revenues included
in the years ended December 31, 2000 and 1999 for those assets sold was
$13,996,000 and $131,137,000, respectively. This decrease resulting from the
sale of these assets was in part offset due to increases in ADR of 3.8% and
occupancy of 0.6%. Operating income benefited from the increases in the
overall operating statistics in this segment as well as a result of the spin-
off of the leases in 1999 in the Interstate spin-off as certain of those
leases were generating operating losses.

   Other represents revenue from various operating businesses including
management and other service companies. Expenses in this segment are primarily
interest, depreciation, amortization and corporate general and administrative
expenses. Total revenue for the other segment was $76,992,000 and $86,289,000
for the years ended December 31, 2000, and 1999, respectively. The $9,297,000
decrease in this segment's revenue was caused primarily by decreases in
management and service fee income from the Interstate spin-off and the sale of
third party management contracts in the Sierra transaction. This was partially
offset by the recognition of a $14,746,000 termination fee. Operating losses
for the segment were $1,150,991,000 and $1,067,611,000 for the years ended
December 31, 2000, and 1999, respectively. In 1999, the operating loss was
impacted by restructuring charges of $285,267,000 which resulted from the
termination of the paired share structure and management's decision to
streamline its organization and focus on its core brands and strategic assets.
In addition, the loss was impacted by reductions in general and administrative
expenses as management made efforts to streamline the organization such as
consolidating the Company's divisional and sales offices in Dallas and
eliminating layers of management. In 2000, however, the operating loss was
impacted by a $486,658,000 impairment reserve recognized for certain assets.

  For the year ended December 31, 1999 compared with the year ended December
31, 1998

   Wyndham Hotels & Resorts(R) represented 39.8% and 32.3% of total revenue
for the years ended December 31, 1999 and 1998, respectively. Total revenue
was $992,353,000 in 1999 as compared to $663,824,000 in 1998. Operating income
was $244,435,000 in 1999 as compared to $162,560,000 in 1998. The increases in
revenue and operating income were primarily due to the conversion of several
non-proprietary hotels and the acquisition of the remaining partners' interest
in certain resorts in March 1998. Prior to the acquisition, Wyndham accounted
for its investment in these resorts on the equity basis of accounting.
Subsequent to the purchase of the partners' interest, the operations were
consolidated into the statement of operations.

   Wyndham Luxury Resorts represented approximately 3.9% and 4.1% of total
revenue for the years ended December 31,1999 and 1998, respectively. Total
revenue was $97,422,000 compared to $84,372,000 for the years ended
December 31, 1999 and 1998, respectively. Operating income was $22,050,000 in
1999 as compared to $18,581,000 in 1998. The increases can primarily be
attributed to having a full year of operations of the Golden Door Spa in 1999
as compared to 1998 when it was acquired and the repositioning of the Peaks
Resort and Spa from a Wyndham Luxury Resort to Wyndham Hotels & Resorts.

                                      29
<PAGE>

   Wyndham Garden Hotels represented approximately 3.7% and 8.7% of total
revenue for the years ended December 31, 1999 and 1998, respectively. Total
revenue was $92,776,000 compared to $178,000,000 for the years ended
December 31, 1999 and 1998, respectively. Operating income was $23,044,000 as
compared to $48,931,000 in 1998. The decrease in primarily the result of the
repositioning of several Garden Hotels to Wyndham Hotel and Resorts. The 1998
revenue and operating income attributable to those hotels repositioned was
$79,855,000 and $24,793,000, respectively.

   Summerfield Suites by Wyndham(TM) represented approximately 5.3% and 3.5%
of total revenue for the year ended December 31, 1999 as compared to 1998.
Total revenue was $132,772,000 compared to $71,413,000 for the years ended
December 31, 1999 and 1998, respectively. Operating income was $26,785,000 in
1999 as compared to $14,586,000 in 1998. Summerfield was not acquired until
June of 1998 and therefore only seven months of operations are reflected in
1998. In addition, 1999 results reflected the opening of additional
Summerfield hotels which were under development in 1998 but not operational
until 1999.

   Other proprietary branded properties, including Malmaison, Grand Heritage,
Sierra, ClubHouse and hotels acquired in the Arcadian acquisition, represented
approximately 4.1% of total revenue for the years ended December 31 1999, and
1998, respectively. Total revenue was $101,796,000 compared to $83,919,000 for
the years ended December 31, 1999 and 1998, respectively. Operating income was
$27,680,000 in 1999 as compared to $26,596,000 in 1998. The hotels acquired in
the Arcadian acquisition, including the Malmaison properties, were not
acquired until April 1998, accounting primarily for the increase of both
revenues and operating income. In addition, 1999 results reflected the opening
of an additional hotel which was under development in 1998 and the addition of
the controlling interest in a third hotel in September of 1999. However, these
increases were partially offset by the sale of the 11 hotels from Arcadian in
December of 1999 and the decreases in revenues and operating income for the
ClubHouse branded hotels.

   Non-proprietary branded properties, including Hilton(R), Holiday Inn(R),
Marriott(R), Doubletree(R), Radisson(R) and other major hotel franchises,
represented approximately 39.8% and 37.0% of total revenue for the year ended
December 31, 1999 as compared to 1998. Total revenue increased from
$761,154,000 to $991,927,000 and operating income increased from $183,703,000
to $240,028,000 for the years ended 1998 and 1999, respectively. The increases
are due primarily to the acquisition of the owned and leased Interstate
properties, and the leasehold interest in CHC Lease Partners, NorthCoast and
the Doubletree Lessees. The increases were partially offset by asset sales
during the year, as well as the loss of certain leaseholds in the Interstate
spin-off.

   Other represents revenue from various operating businesses including
management and other service companies, and participating lease revenue for
one hotel and a parcel of land. Total revenue for the other segment was
$86,289,000 and $213,659,000 for 1999 and 1998, respectively. The overall
$127,370,000 decrease in this segment's revenue was caused by several factors.
The sale of Bay Meadows Race Track operations and leasehold effective February
1, 1999 reduced revenue by $46,698,000. The purchase of the third party
leasehold interests, primarily CHC Lease Partners and NorthCoast Hotels,
reduced participating lease revenue by $57,246,000. Operating losses for the
segment were $1,067,611,000 and $576,963,000 for the years ended December 31,
1999 and 1998, respectively. In addition to the decrease in revenues, the
increase in the segment's operating loss is a result of increased expenses
resulting from the mergers and acquisitions in 1998. Interest expense
increased $93,124,000, depreciation and amortization increased $71,657,000 and
corporate and general and administrative expenses increased $68,714,000. The
sale of the Bay Meadows Racetrack accounted for an approximate $39,331,000
decrease in expenses and the cost of acquiring the third party leaseholds in
1998 decreased expenses by an additional $63,111,000.

 Statistical Information

   During 2000, the Company's portfolio of 177 owned and leased hotels
experienced growth in both average daily rate ("ADR") and revenue per
available room ("REVPAR") of approximately 2.9% and 4.8%, respectively, with a
slight increase in occupancy of 1.8%. Management attributes this growth to
continued

                                      30
<PAGE>

marketing efforts throughout the portfolio on hotels that have been
repositioned and converted, as well as to the market conditions in the U.S.
lodging industry. The following table sets forth certain statistical
information for the Company's 177 owned and leased hotels for 2000 and 1999 as
if the hotels were owned or leased for the entire periods presented.

<TABLE>
<CAPTION>
                                    Occupancy         ADR           REVPAR
                                    ----------  --------------- ---------------
                                    2000  1999   2000    1999    2000    1999
                                    ----  ----  ------- ------- ------- -------
<S>                                 <C>   <C>   <C>     <C>     <C>     <C>
Wyndham Hotels & Resorts........... 73.0% 70.9% $130.22 $127.63 $ 95.12 $ 90.61
Wyndham Luxury Resorts............. 73.2  71.9   306.99  300.97  224.85  216.63
Wyndham Garden Hotels.............. 67.8  66.5    91.40   92.38   61.95   61.38
Summerfield Suites by Wyndham...... 82.4  80.5   123.99  121.55  102.18   97.88
Non-proprietary brands............. 71.5  71.1   109.47  105.48   78.30   74.98
                                    ----  ----  ------- ------- ------- -------
  Weighted average................. 72.8% 71.5% $120.08 $116.67 $ 87.44 $ 83.44
                                    ====  ====  ======= ======= ======= =======
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

   Cash and cash equivalents as of December 31, 2000 were $52.5 million, and
restricted cash was $98.1 million. Cash and cash equivalents as of December
31, 1999 were $144.3 million, and restricted cash $102.5 million.

Cash Flow Provided by Operating Activities

   The Company's principal source of cash flow is from the operations of the
hotels that it owns, leases and manages. Cash flows from operating activities
were $246.8 million, $202.3 million, and $244.5 million for 2000, 1999 and
1998, respectively.

Cash Flows from Investing and Financing Activities

   Cash flows provided by investing activities of the Company were
approximately $37.2 million for 2000, resulting primarily from the sale of
hotel properties and other investments along with cash distributions received
from investments in certain unconsolidated subsidiaries. This was offset in
part by the acquisition of the remaining partnership interest in one hotel,
the amendment of the Wyndham Anatole management contract, payment of
additional purchase consideration in connection with the Summerfield
transaction, and capital improvements and renovations at the hotel properties.

   Cash flows used in financing activities of the Company were $383.4 million
for 2000, resulting primarily from the repayment of debt and dividend payments
made on the preferred stock. In addition, the Company paid $34.4 million in
premiums to enter into financial derivatives with a total notional amount of
$1.5 billion to limit its exposure to rising interest rates.

   Cash flows used in investing activities of the Company were approximately
$356.6 million for 1999, resulting primarily from the acquisition of hotel
properties, property renovations and improvements, and cash deposited as
escrows and property improvement reserves.

   Cash flows provided by financing activities of approximately $181.9 million
for 1999 were primarily related to the net proceeds from the sale of the
series B preferred stock, the net proceeds from the new credit facility and
the net proceeds from the new mortgage debt, partially offset by the repayment
of the old credit facility, term loans, and the settlement of the forward
equity contracts.

   During 1998, the Company continued to experience rapid growth through the
merger and acquisition of hotel properties and management companies. These
transactions were funded with a combination of issuance and or assumption of
debt as well as sale of registered securities, issuance of OP units and
proceeds from the forward equity transactions. The proceeds from the forward
equity transactions were used to repay borrowings under the credit facility.
The credit facility was then used to fund the cash portion of the Company's
mergers and acquisitions.

                                      31
<PAGE>

   Cash flows used in investing activities of the Company were approximately
$2.1 billion for 1998, resulting primarily from the merger and acquisition of
various hotel properties and management companies and the renovation
expenditures at certain hotels.

   Cash flows from financing activities of $1.9 billion for 1998 were
primarily related to the borrowings on the credit facility, the term loans and
mortgage notes and net proceeds from public and private placement of equity
securities, net of payments of dividends and distributions.

   The Company does not anticipate paying a dividend to its common
shareholders. However, for the six year period beginning September 30, 1999,
dividends on Wyndham's series A and B convertible preferred stock are
structured to ensure an aggregate fixed cash dividend payment of
$29.25 million per year, so long as there is no redemption or conversion of
the preferred stock; therefore, for that period, dividends are payable partly
in cash and partly in additional shares of preferred stock. For the following
four years, dividends are payable in cash or additional shares of convertible
preferred stock as determined by the Board of Directors. After year ten,
dividends are payable solely in cash.

   Effective September 25, 2000, the Company amended certain terms of its
credit agreement. As a part of the amendment, the applicable interest rate
margins of the $1.3 billion term loan would be increased by 0.50% if the
balance of the increasing rate term loans in the aggregate amount was greater
than $325 million, or 0.25% should the balance be equal to or less than
$325 million. As of December 31, 2000, the balance of the increasing rate
loans was $617 million.

   As of March 19, 2001, the Company had approximately $145 million
outstanding under the revolving credit facility, $1.3 billion outstanding on
the term loans, and $617 million outstanding under the increasing rate loans.
Additionally, the Company had outstanding letters of credit totaling
$56.4 million. As of such date, the Company also had over $1.3 billion of
mortgage debt outstanding that encumbered 62 hotels and capital leases and
other debt of $51.4 million, resulting in total indebtedness of approximately
$3.4 billion. As of March 19, 2001, the Company had $298.6 additional
availability under the revolving credit facility.

Renovations and Capital Improvements

   During 2000, the Company invested approximately $202.3 million in capital
improvements and renovations. During 2000, the capital expenditures included
(i) costs related to converting hotels to one of the Company's proprietary
brands, (ii) costs related to converting certain Wyndham Garden hotels to
Wyndham hotels, (iii) costs related to enhancing the revenue-producing
capabilities of the Company's hotels, and (iv) costs related to recurring
maintenance reserves capital expenditures. The expenditures also included an
additional $16.7 million as additional purchase consideration (See Note 8).
During 2001, the Company anticipates spending approximately $154.7 million in
capital expenditures primarily for costs related to recurring maintenance
capital expenditures and technological initiatives.

   The Company attempts to schedule renovations and improvements during
traditionally lower occupancy periods in an effort to minimize disruption to
the hotel's operations. Therefore, management does not believe such
renovations and capital improvements will have a material effect on the
results of operations of the hotels. Capital expenditures will be financed
through capital expenditure reserves or with working capital.

Newly Issued Accounting Standards

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and No. 138.

   SFAS No. 133, as amended, requires that derivatives be recorded on the
balance sheet as an asset or liability at fair value. SFAS No. 133, as
amended, requires that derivatives that are not hedges be recorded at fair
value through earnings. Special accounting for qualifying hedges allows a
derivative instrument's gains and losses to

                                      32
<PAGE>

offset related results on the hedged item in the income statement, to the
extent effective, and requires that a company formally document, designate and
assess the effectiveness of transactions that receive hedge accounting.
SFAS No. 133, as amended, in part, allows special hedge accounting for fair
value and cash flow hedges. The Statement provides that the gain or loss on a
derivative instrument designated and qualifying as a fair value hedging
instrument as well as the offsetting loss or gain on the hedged item
attributable to the hedged risk be recognized currently in earnings in the
same accounting period. SFAS No. 133, as amended, provides that the effective
portion of the gain or loss on a derivative instrument designated and
qualifying as a cash flow hedging instrument be reported as a component of
other comprehensive income and be reclassified into earnings in the same
period or periods during which the hedged forecasted transaction affects
earnings. The ineffective portion of a derivative's change in fair value is
recognized currently through earnings regardless of whether the instrument is
designated as a hedge.

   The adoption of the new statement on January 1, 2001 will result in a
liability recorded of $14.3 million and a reduction of deferred expenses of
$23.2 million representing the difference between the carrying value and the
fair value of the derivatives with the offset recognized in the cumulative
effect of an accounting change of $5.4 million in the consolidated statement
of operations and a charge of $32.1 million in other comprehensive income in
the first quarter of 2001. Additionally, the Company will review the
effectiveness of the derivatives at each reporting date and will recognize the
ineffective portion of the derivatives as a charge to earnings for the period.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

   The Company's primary market risk exposure is to future changes in interest
rates related to the Company's derivative financial instruments and other
financial instruments including debt obligations, interest rate swaps,
interest rate caps, and future debt commitments.

   The Company manages its debt portfolio by periodically entering into
interest rate swaps and caps to achieve an overall desired position of fixed
and floating rates or to limit its exposure to rising interest rates.

   The following table provides information about the Company's derivative and
other financial instruments that are sensitive to changes in interest rates.

  .  For fixed rate debt obligations, the table presents principal cash flows
     and related weighted-average interest rates by expected maturity date
     and contracted interest rates at December 31, 2000. For variable rate
     debt obligations, the table presents principal cash flows by expected
     maturity date and contracted interest rates at December 31, 2000.

  .  For interest rate swaps and caps, the table presents notional amounts
     and weighted-average interest rates or strike rates by expected
     (contractual) maturity dates. Notional amounts are used to calculate the
     contractual cash flows to be exchanged under the contract. Weighted
     average variable rates are based on implied forward rates in the yield
     curve at December 31, 2000.

<TABLE>
<CAPTION>
                            2001      2002      2003       2004       2005    Thereafter  Face Value Fair Value
                          --------  --------  --------  ----------  --------  ----------  ---------- ----------
                                                      (dollars in thousands)
<S>                       <C>       <C>       <C>       <C>         <C>       <C>         <C>        <C>
Debt
Long-term debt
 obligations Including
 Current Portion Fixed
 Rate...................  $ 24,931  $ 50,002  $  7,103  $   52,627  $ 53,037  $  236,291  $  423,991 $  405,845
 Average Interest Rate..      8.40%     8.96%     8.71%       8.23%     7.71%       8.51%
 Variable Rate..........  $185,865  $276,795  $ 20,786  $1,109,098  $115,441  $1,266,974  $2,974,959 $2,974,959
 Average Interest Rate..      9.34%     9.83%     9.77%      10.05%     9.03%      10.75%
Interest Rate Derivative
 Financial Instruments
 Related to Debt
Interest Rate Swaps
 Pay Fixed/Receive
 Variable...............  $ 29,723  $750,000       --          --   $700,000         --   $1,479,723 $  (24,477)
 Average Pay Rate.......      6.05%     6.35%     6.69%       6.71%     6.75%        --
 Average Receive Rate...      5.15%     5.30%     5.68%       5.91%     6.11%        --
Interest Rate Caps
 Notional Amount........  $ 57,091  $550,000  $250,000  $  349,028  $106,000         --   $1,312,119 $   10,232
 Strike Rate............      6.11%     6.08%     7.48%       7.84%     9.75%        --
 Forward Rate...........      5.15%     5.30%     5.68%       5.91%     6.11%        --
</TABLE>

                                      33
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The independent auditors' reports, financial statements and financial
statement schedules listed in the accompanying index are filed as part of this
report. See Index to Financial Statements and Financial Statement Schedules on
page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

   On August 19, 1999, the Company dismissed Ernst & Young LLP as its
independent accountants. The reports of Ernst & Young LLP on the financial
statements of the Company for the past two fiscal years contain no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. The audit committee of the
Board of Directors of the Company participated in and approved the decision to
change independent accountants. In connection with Ernst & Young LLP's audits
for Wyndham's two most recent fiscal years ended December 31, 1998 and in the
subsequent interim period, there have been no disagreements with Ernst & Young
LLP on any matter of accounting principles or financial statement disclosure,
or auditing scope or procedure which if not resolved to the satisfaction of
Ernst & Young LLP would have caused them to make reference to the subject
matter in their report. There were no reportable events as defined in
Regulation S-K Item 304(a) (1) (v).

                                   PART III

   The information called for by this Part III (other than the information
required by Item 10 with respect to executive officers of Wyndham, which
information appears under the heading "Executive Officers of the Registrant"
in Part I hereof) is, in accordance with General Instruction G(3) to Form 10-
K, incorporated herein by reference to the information contained in the
Company's definitive proxy statement for the annual meeting of stockholders of
Wyndham to be held May 24, 2001, which will be filed with the Securities and
Exchange Commission not later than 120 days after December 31, 2000.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON FORM 8-K

(a)  The index to the audited financial statements and financial statement
     schedules is included on page F-1 of this report. The financial
     statements are included herein at pages F-1 through F-44. The following
     financial statement schedule is included herein at pages F-45 through F-
     46:

  Schedule III--Real Estate and Accumulated Depreciation for Wyndham
  International, Inc.

  All other schedules for which provision is made in Regulation S-X are
  either not required to be included herein under the related instructions or
  are inapplicable or the related information is included in the footnotes to
  the applicable financial statement and, therefore, have been omitted.

(b)  Reports on Form 8-K for the quarter ended December 31, 2000:

  Current Report on Form 8-K of Wyndham International, Inc. dated October 16,
  2000 (01-9320) reporting under Item 5, the resignation of the Chairman of
  the Board and the appointment of a new Chairman of the Board.

                                      34
<PAGE>

(c)  Exhibits:

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
   2.1   Securities Purchase Agreement, dated as of February 18, 1999, by and
         among Patriot American Hospitality, Inc. ("Patriot"), Wyndham
         International, Inc. ("Wyndham"), Patriot American Hospitality
         Partnership, L.P., Wyndham International Operating Partnership, L.P.
         and the Investors named therein, incorporated by reference to Exhibit
         2.1 to Wyndham's Registration Statement on Form S-4/A (SEC file no.
         333-79527) filed June 1, 1999.


   2.2   Amendment to Securities Purchase Agreement, dated as of June 28, 1999,
         by and among Patriot, Wyndham, Patriot American Hospitality
         Partnership, L.P., Wyndham International Operating Partnership, L.P.
         and the parties identified on the signature page as the Original
         Investors, incorporated by reference to Exhibit 2.2 to Wyndham's
         Current Report on Form 8-K filed July 13, 1999.

   2.3   Restructuring Plan, incorporated by reference to Exhibit 2.2 to
         Wyndham's Registration Statement on Form S-4/A (SEC file no. 333-
         79527) filed June 1, 1999.


   2.4   Agreement and Plan of Merger, dated as of March 26, 1999, by and among
         Wyndham, Wyndham International Acquisition Subsidiary, Inc. and
         Patriot, incorporated by reference to Exhibit 2.3 to Wyndham's
         Registration Statement on Form S-4/A (SEC file no. 333-79527) filed
         June 1, 1999.

   3.1   Amended and Restated Certificate of Incorporation of Wyndham,
         incorporated by reference to Exhibit 3.1 to Wyndham's Registration
         Statement on Form S-8 filed July 2, 1999.


   3.2   Amended and Restated Bylaws of Wyndham, incorporated by reference to
         Exhibit 3.2 to Wyndham's Registration Statement on Form S-8 filed July
         2, 1999.


   3.3   Amendment No. 1 to Amended and Restated Bylaws of Wyndham incorporated
         by reference to Exhibit 2.1 to Wyndham's Quarterly Report on Form 10-Q
         for the quarterly period ended March 31, 2000.


   4.1   Certificate of Designation of Series A Convertible Stock of Wyndham,
         incorporated by reference to Exhibit 99.5 to Wyndham's and Patriot's
         Current Report on Form 8-K filed March 2, 1999.


   4.2   Certificate of Designation of Series B Convertible Preferred Stock of
         Wyndham, incorporated by reference to Exhibit 4.2 to Wyndham's
         Registration Statement on Form S-4/A (SEC file no. 333-79527) filed
         June 1, 1999.


   4.3   Certificate of Designation of Series C Junior Participating Cumulative
         Preferred Stock of Wyndham, incorporated by reference to Exhibit 3.1
         to Wyndham's Current Report on Form 8-K filed July 12, 1999.


   4.4   Registration Rights Agreement, dated as of February 18, 1999, by and
         among Wyndham and the holders of Series B Convertible Preferred Stock
         of Wyndham party thereto, incorporated by reference to Exhibit 4.1 to
         Wyndham's Quarterly Report on Form 10-Q for the quarter ended June 30,
         1999.

   4.5   Registration Rights Agreement, dated as of June 30, 1999, by and among
         Wyndham and former Operating Partnership unitholders party thereto,
         incorporated by reference to Exhibit 10.1 to Wyndham's Registration
         Statement on Form S-3 (SEC file no. 333-86189) filed August 30, 1999.

   4.6   Shareholder Rights Agreement, dated as of June 29, 1999, between
         Wyndham and American Stock Transfer and Trust Company, as Rights
         Agent, incorporated by reference to Exhibit 4.1 to Wyndham's Current
         Report on Form 8-K, filed July 12, 1999.

</TABLE>


                                       35
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
   4.7   Amendment No. 1 to the Shareholder Rights Agreement, dated May 12,
         2000, by and between Wyndham and American Stock Transfer, and Trust
         Company, as rights agent incorporated by reference to Exhibit 4.2 to
         Wyndham's Registration Statement on Form 8-A filed May 30, 2000.


   4.8*  First Amendment to the Registration Rights Agreement, dated September
         25, 2000, by and among Wyndham and the Chase Manhattan Bank, as
         representative


  10.1   Credit Agreement, dated as of June 30, 1999, by and among Wyndham and
         the Lenders named therein, incorporated by reference to Exhibit 10.1
         to Wyndham's Annual Report on Form 10-K for the year ended December
         31, 1999.


  10.2   Increasing Rate Note Purchase and Loan Agreement, dated as of June 30,
         1999, by and among Wyndham and the Lenders named therein, incorporated
         by reference to Exhibit 10.2 to Wyndham's Annual Report on Form 10-K
         for the year ended December 31, 1999.

  10.3   Executive Employment Agreement as Amended and Restated, dated as of
         April 19, 1999, between Wyndham and Michael A. Grossman, incorporated
         by reference to Exhibit 10.5 to Wyndham's Annual Report on Form 10-K
         for the year ended December 31, 1999.

  10.4*  Executive Employment Agreement, dated as of March 27, 2000, between
         Wyndham and Fred J. Kleisner.


  10.5   Executive Employment Agreement, dated as of August 18, 1999, between
         Wyndham and James D. Carreker, incorporated by reference to Exhibit
         10.14 to Wyndham's Annual Report on Form 10-K for the year ended
         December 31, 1999.


  10.6   Amendment No. 1 to Executive Employment Agreement, dated as of March
         27, 2000, between Wyndham and James D. Carreker, incorporated by
         reference to Exhibit 10.15 to Wyndham's Annual Report on Form 10-K for
         the year ended December 31, 1999.

  10.7   Letter Agreement, dated July 7, 1999, between Wyndham and Karim
         Alibhai, incorporated by reference to Exhibit 10.4 to Wyndham's
         Quarterly Report on Form 10-Q for the quarter ended September 30,
         1999.


  10.8   Amended and Restated Wyndham 1997 Incentive Plan, incorporated by
         reference to Exhibit 10.1 to Wyndham's Annual Report on Form 10-K for
         the year ended December 31, 1999.


  10.9   Amendment No. 1 to the Amended and Restated Wyndham 1997 Incentive
         Plan, incorporated by reference to Exhibit 4.1 to Wyndham's
         Registration Statement on Form S-8 filed December 12, 2000.


  10.10  Letter Agreement dated April 14, 2000 between Anne L. Raymond and
         Wyndham incorporated by reference to Exhibit 10.1 to Wyndham's
         Quarterly Report on Form 10-Q for the quarterly period ended March 31,
         2000.


  10.11  Executive Employment Agreement, dated April 12, 2000 between Wyndham
         and Theodore Teng incorporated by reference to Exhibit 10.1 to
         Wyndham's Quarterly Report on Form 10-Q for the quarterly period ended
         June 30, 2000.


  10.12  Executive Employment Agreement, dated May 31, 2000 between Wyndham and
         Richard A. Smith incorporated by reference to Exhibit 10.2 to
         Wyndham's Quarterly Report on Form 10-Q for the quarterly period ended
         June 30, 2000.


  10.13  Executive Employment Agreement, dated August 1, 2000 between Wyndham
         and David W. Johnson incorporated by reference to Exhibit 10.3 to
         Wyndham's Quarterly Report on Form 10-Q for the quarterly period ended
         June 30, 2000.


  10.14  Letter Agreement, dated July 18, 2000 between Leslie V. Bentley and
         Wyndham incorporated by reference to Exhibit 10.2 to Wyndham's
         Quarterly Report on Form 10-Q for the quarterly period ended September
         30, 2000.

</TABLE>


                                       36
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.15*  Letter Agreement, dated February 23, 2001 between Carla S. Moreland
         and Wyndham.


 10.16*  Letter Agreement, dated March 1, 2001 between James D. Carreker and
         Wyndham.


 10.17   Amendment and Restatement to the Credit Agreement, dated September 25,
         2000, by Wyndham and the Lenders named therein incorporated by
         reference to Exhibit 10.2 to Wyndham's Quarterly Report on Form 10-Q
         for the quarterly period ended September 30, 2000.

 10.18*  Amendment and Restatement to the Increasing Rate Note Purchase and
         Loan Agreement, dated September 25, 2000, by Wyndham and Lenders named
         therein.


 12.1*   Statement Regarding Computation of Ratios.


 21.1*   Significant Subsidiaries of Wyndham.


 23.1*   Consent of Ernst & Young LLP.


 23.2*   Consent of PricewaterhouseCoopers LLP.
</TABLE>
--------
 *  Filed herewith

                                       37
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

Dated: March 26, 2000

                                          Wyndham International, Inc.

                                                  /s/ Fred J. Kleisner
                                          By: _________________________________
                                                      Fred J. Kleisner
                                                 Chairman of the Board and
                                                  Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
              Signature                Capacities in which signed        Date
              ---------                --------------------------        ----

<S>                                    <C>                        <C>
      /s/ Fred J. Kleisner             Chairman of the Board, and   March 26, 2001
______________________________________  Chief Executive Officer
           Fred J. Kleisner

        /s/ Theodore Teng              President, Chief Operating   March 26, 2001
______________________________________  Officer
            Theodore Teng

       /s/ Richard A. Smith            Executive Vice President     March 26, 2001
______________________________________  and Chief Financial
           Richard A. Smith             Officer

        /s/ Karim Alibhai              Director                     March 26, 2001
______________________________________
            Karim Alibhai

        /s/ Leonard Boxer              Director                     March 26, 2001
______________________________________
            Leonard Boxer

      /s/ James D. Carreker            Director                     March 26, 2001
______________________________________
          James D. Carreker

         /s/ Milton Fine               Director                     March 26, 2001
______________________________________
             Milton Fine

       /s/ Susan Groenteman            Director                     March 26, 2001
______________________________________
           Susan Groenteman

        /s/ Rolf E. Ruhfus             Director                     March 26, 2001
______________________________________
            Rolf E. Ruhfus

       /s/ Sherwood Weiser             Director                     March 26, 2001
______________________________________
           Sherwood Weiser

</TABLE>

                                      38
<PAGE>

<TABLE>
<CAPTION>
              Signature                Capacities in which signed        Date
              ---------                --------------------------        ----

<S>                                    <C>                        <C>
        /s/ Leon D. Black              Director                     March 26, 2001
______________________________________
            Leon D. Black

      /s/ Norman Brownstein            Director                     March 26, 2001
______________________________________
          Norman Brownstein

       /s/ Stephen T. Clark            Director                     March 26, 2001
______________________________________
           Stephen T. Clark

        /s/ Paul Fribourg              Director                     March 26, 2001
______________________________________
            Paul Fribourg

        /s/ Thomas H. Lee              Director                     March 26, 2001
______________________________________
            Thomas H. Lee

                                       Director                     March   , 2001
______________________________________
          Alan M. Leventhal

         /s/ William Mack              Director                     March 26, 2001
______________________________________
             William Mack

        /s/ Lee S. Neibert             Director                     March 26, 2001
______________________________________
            Lee S. Neibert

        /s/ Marc J. Rowan              Director                     March 26, 2001
______________________________________
            Marc J. Rowan

         /s/ Scott Schoen              Director                     March 26, 2001
______________________________________
             Scott Schoen

      /s/ Scott M. Sperling            Director                     March 26, 2001
______________________________________
          Scott M. Sperling
</TABLE>

                                       39
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

        INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                        HISTORICAL FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
Wyndham International, Inc.:
  Report of Independent Accountants--PricewaterhouseCoopers LLP...........  F-2
  Report of Independent Auditors--Ernst & Young LLP.......................  F-3
  Consolidated Balance Sheets as of December 31, 2000 and 1999............  F-4
  Consolidated Statements of Operations for the years ended December 31,
   2000, 1999 and 1998....................................................  F-5
  Consolidated Statements of Shareholders' Equity for the years ended
   December 31, 2000, 1999 and 1998.......................................  F-6
  Consolidated Statements of Cash Flows for the years ended December 31,
   2000, 1999 and 1998....................................................  F-8
  Notes to Consolidated Financial Statements.............................. F-10
  Report of Independent Accountants on Financial Statement Schedule....... F-45
  Financial Statement Schedule:
  Schedule III--Real Estate and Accumulated Depreciation.................. F-46
</TABLE>

                                      F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors and Shareholders
Wyndham International, Inc.

   In our opinion, the accompanying consolidated balance sheets of Wyndham
International, Inc. as of December 31, 2000 and 1999 and the related
consolidated statements of operations, shareholders' equity and cash flows
present fairly in all material respects the financial position of Wyndham
International Inc. and its subsidiaries at December 31, 2000 and 1999, and the
results of their operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States
of America. These consolidated financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion expressed above. The
financial statements of the Company for the year ended December 31, 1998 were
audited by other independent accountants whose report dated March 1, 1999
expressed an unqualified opinion.

/s/ PricewaterhouseCoopers LLP

Dallas, Texas
February 5, 2001

                                      F-2
<PAGE>

                        Report of Independent Auditors

Board of Directors and Shareholders
 Wyndham International, Inc.

   We have audited the accompanying consolidated statements of operations,
shareholders' equity, and cash flows of Wyndham International, Inc. for the
year ended December 31, 1998. Our audit also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule as of December 31, 1998 based on our audit.

   We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

   In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash
flows of Wyndham International, Inc. for the year ended December 31, 1998 in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule as of December
31, 1998, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

                                             /s/ Ernst & Young LLP

Dallas, Texas
March 1, 1999

                                      F-3
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                          CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)

                         PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                      December 31,  December 31,
                                                          2000          1999
                                                      ------------  ------------
<S>                                                   <C>           <C>
                       ASSETS
Current assets:
 Cash and cash equivalents..........................  $    52,460   $   144,333
 Restricted cash....................................       98,070       102,480
 Accounts and lease revenue receivable..............      188,381       186,321
 Inventories........................................       21,211        23,304
 Prepaid expenses and other assets..................       15,248        21,197
 Assets held for sale, net of accumulated
  depreciation of $205,242 in 2000 and $70,315 in
  1999..............................................    1,196,272       428,993
                                                      -----------   -----------
 Total current assets...............................    1,571,642       906,628
                                                      -----------   -----------
Investment in real estate and related improvements
 net of accumulated depreciation of $497,669 in 2000
 and $408,179 in 1999...............................    3,515,223     4,984,185
Investment in unconsolidated subsidiaries...........      104,814       165,663
Notes and other receivables.........................       48,976        42,653
Management contract costs, net of accumulated
 amortization $18,034 in 2000 and $26,359 in 1999...      109,106       129,362
Leasehold costs, net of accumulated amortization of
 $21,128 in 2000 and $15,305 in 1999................      125,044       133,102
Trade names and franchise costs, net of accumulated
 amortization of $17,560 in 2000 and $11,328 in
 1999...............................................      104,249       116,521
Deferred acquisition costs..........................        2,936         2,584
Goodwill and intangibles, net of accumulated
 amortization of $36,826 in 2000 and $30,141 in
 1999...............................................      339,032       378,916
Deferred expenses, net of accumulated amortization
 of $42,244 in 2000 and $46,614 in 1999.............      104,474        97,767
Other assets........................................       41,403        46,109
                                                      -----------   -----------
 Total assets.......................................  $ 6,066,899   $ 7,003,490
                                                      ===========   ===========
        LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Accounts payable and accrued expenses..............  $   210,592   $   322,195
 Deposits...........................................       38,943        39,452
 Mortgage debt associated with assets held for
  sale..............................................      505,836        31,511
 Current portion of borrowings under credit
  facility, term loans, mortgage notes and capital
  lease obligations.................................      155,728       129,700
                                                      -----------   -----------
 Total current liabilities..........................      911,099       522,858
                                                      -----------   -----------
Borrowings under credit facility, term loans,
 mortgage notes and capital lease obligations.......    2,737,386     3,482,345
Deferred income taxes...............................      430,030       656,164
Deferred income.....................................        7,875        15,543
Minority interest in the Operating Partnerships.....       21,416        22,435
Minority interest in consolidated subsidiaries......      164,906       166,483
Commitments and contingencies
Shareholders' equity:
 Preferred stock, $0.01 par value; authorized:
  150,000,000 shares; shares issued and outstanding:
  11,087,390 in 2000 and 10,344,662 in 1999.........          111           103
 Common stock, $0.01 par value; authorized:
  750,000,000 shares; shares issued and outstanding:
  167,416,376 in 2000 and 167,193,696 in 1999.......        1,674         1,672
 Additional paid in capital.........................    3,828,900     3,753,235
 Receivables from shareholders and affiliates.......      (17,161)      (17,210)
 Unearned stock compensation, net of accumulated
  amortization of $19,552 in 2000 and $19,297 in
  1999..............................................          --           (255)
 Unrealized loss on securities available for sale...         (647)       (1,000)
 Unrealized foreign exchange loss...................         (164)       (7,576)
 Accumulated deficit................................   (2,018,526)   (1,591,307)
                                                      -----------   -----------
 Total shareholders' equity.........................    1,794,187     2,137,662
                                                      -----------   -----------
  Total liabilities and shareholders' equity........  $ 6,066,899   $ 7,003,490
                                                      ===========   ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-4
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                               2000        1999         1998
                                            ----------  -----------  ----------
<S>                                         <C>         <C>          <C>
Revenue:
 Hotel revenue............................  $2,421,603  $ 2,409,046  $1,842,682
 Participating lease revenue..............         --         1,194      58,440
 Racecourse facility and land lease
  revenue.................................         --         4,561      51,259
 Management fee and service fee income....      46,028       69,278      89,067
 Interest and other income................      30,964       11,256      14,893
                                            ----------  -----------  ----------
 Total revenue............................   2,498,595    2,495,335   2,056,341
                                            ----------  -----------  ----------
Expenses:
 Hotel expenses...........................   1,747,601    1,772,724   1,360,213
 Racing facility operations...............         --         3,867      43,198
 General and administrative...............      97,766      178,039     109,325
 Interest expense.........................     371,855      353,227     260,103
 Cost of acquiring leaseholds and license
  agreements..............................       2,448        1,296      64,407
 Treasury lock settlement.................         --           --       49,334
 Loss on sale of assets...................      12,987       10,702       9,453
 Impairment loss on assets................     486,658       70,912      51,081
 Restructuring charge.....................         --       285,267         --
 Depreciation and amortization............     304,785      302,890     231,233
                                            ----------  -----------  ----------
 Total expenses...........................   3,024,100    2,978,924   2,178,347
                                            ----------  -----------  ----------
Operating loss............................    (525,505)    (483,589)   (122,006)
 Equity in earnings (losses) of
  unconsolidated subsidiaries.............       2,491       (7,746)      9,498
                                            ----------  -----------  ----------
Loss before income tax provision, minority
 interests and extraordinary item.........    (523,014)    (491,335)   (112,508)
 Income tax benefit (provision)...........     205,912     (571,421)    (17,122)
                                            ----------  -----------  ----------
Loss before minority interests and
 extraordinary item.......................    (317,102)  (1,062,756)   (129,630)
 Minority interest in the Operating
  Partnerships............................         --         6,642      12,651
 Minority interest in consolidated
  subsidiaries............................      (7,569)      (6,017)     (9,427)
                                            ----------  -----------  ----------
Loss before extraordinary item............    (324,671)  (1,062,131)   (126,406)
 Extraordinary loss from early
  extinguishment of debt, net of minority
  interest and income taxes...............         --        (9,838)    (31,817)
                                            ----------  -----------  ----------
Net loss..................................  $ (324,671) $(1,071,969) $ (158,223)
                                            ==========  ===========  ==========
Basic loss attributable to common
 shareholders:
 Net loss.................................  $ (324,671) $(1,071,969) $ (158,223)
 Adjustment for equity forwards...........         --       (19,372)    (21,151)
 Preferred stock dividends................    (103,522)     (50,190)     (7,956)
 Excess of fair value of consideration to
  redeem preferred stock..................         --          (115)        --
                                            ----------  -----------  ----------
 Basic net loss...........................  $ (428,193) $(1,141,646) $ (187,330)
                                            ==========  ===========  ==========
Basic loss per common paired share:
 Loss before extraordinary item...........  $    (2.56) $     (7.02) $    (1.13)
 Extraordinary loss.......................         --         (0.06)      (0.23)
                                            ----------  -----------  ----------
 Net loss per common share................  $    (2.56) $     (7.08) $    (1.36)
                                            ==========  ===========  ==========
Diluted loss attributable to common
 shareholders:
 Net loss.................................  $ (324,671) $(1,071,969) $ (158,223)
 Adjustment for equity forwards...........         --       (39,322)   (188,392)
 Preferred stock dividends................    (103,522)     (50,190)     (7,956)
 Excess of fair value of consideration to
  redeem preferred stock..................         --          (115)        --
                                            ----------  -----------  ----------
 Diluted net loss.........................  $ (428,193) $(1,161,596) $ (354,571)
                                            ==========  ===========  ==========
Diluted loss per common paired share:
 Loss before extraordinary item...........  $    (2.56) $     (7.14) $    (2.34)
 Extraordinary loss.......................         --         (0.06)      (0.23)
                                            ----------  -----------  ----------
 Net loss per common share................  $    (2.56) $     (7.20) $    (2.57)
                                            ==========  ===========  ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-5
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     (in thousands, except share amounts)

<TABLE>
<CAPTION>
                   Preferred Stock          Common Stock
                   --------------- ------------------------------
                                                                               Receivables                 Accumulated
                                     Patriot     Wyndham          Additional       From        Unearned    Deficit and
                    Number    Par    Number      Number     Par    Paid in     Shareholders     Stock       Dividend
                   of Shares Value  of Shares   of Shares  Value   Capital    and affiliates Compensation Distributions
                   --------- ----- ----------- ----------- ------ ----------  -------------- ------------ -------------
<S>                <C>       <C>   <C>         <C>         <C>    <C>         <C>            <C>          <C>
Balance, December
31, 1997.........        --   --    73,276,716  73,276,716  1,466  1,070,973          --       (13,116)       (69,431)
 Issuance of
 shares for
 mergers and
 acquisitions of
 properties......  8,423,230   85   59,491,863  59,491,863  1,190  1,607,050          --           --             --
 Issuance of
 shares, net of
 offering
 expenses........        --   --    64,084,627  64,084,627  1,282    257,439          --           --             --
 Return of
 capital.........        --   --           --          --     --     (52,873)         --           --             --
 Issuance of
 shares to
 employees and
 directors.......        --   --        39,790      39,790    --         928          --           --             --
 Issuance of
 shares for
 exercise of
 options.........        --   --     1,210,737   1,210,737     24     15,250          --           --             --
 Issuance of
 shares to redeem
 OP units........        --   --     1,362,316   1,362,316     28     27,868          --           --             --
 Issuance of
 notes receivable
 from
 shareholders and
 affiliates for
 mergers and
 acquisitions....        --   --           --          --     --         --       (18,617)         --             --
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......        --   --           --          --     --         --          (863)         --             863
 Collections on
 notes receivable
 from
 shareholders and
 affiliates......        --   --           --          --     --         --         3,116          --             --
 Amortization of
 unearned stock
 compensation....        --   --           --          --     --         --           --         7,622            --
 Net loss........        --   --           --          --     --         --           --           --        (158,223)
 Foreign currency
 translation
 adjustment......        --   --           --          --     --         --           --           --             --
 Unrealized loss
 on securities
 held for sale...        --   --           --          --     --         --           --           --             --
                   ---------  ---  ----------- ----------- ------ ----------     --------      -------      ---------
Comprehensive
loss.............
                   ---------  ---  ----------- ----------- ------ ----------     --------      -------      ---------
 Cash dividends..        --   --           --          --     --         --           --           --         (87,390)
 Stock dividends
 declared........    558,656    5   14,055,598  14,055,598    280     97,905          --           --         (91,328)
                   ---------  ---  ----------- ----------- ------ ----------     --------      -------      ---------
Balance, December
31, 1998.........  8,981,886  $90  213,521,647 213,521,647 $4,270 $3,024,540     $(16,364)     $(5,494)     $(405,509)
                   ---------  ---  ----------- ----------- ------ ----------     --------      -------      ---------
<CAPTION>
                     Accumulated Other
                    Comprehensive Income
                   ----------------------
                             Unrealized
                   Foreign     Loss on
                   Currency  Securities
                   Exchange Held for Sale    Total
                   -------- ------------- ------------
<S>                <C>      <C>           <C>
Balance, December
31, 1997.........      --          --         989,892
 Issuance of
 shares for
 mergers and
 acquisitions of
 properties......      --          --       1,608,325
 Issuance of
 shares, net of
 offering
 expenses........      --          --         258,721
 Return of
 capital.........      --          --         (52,873)
 Issuance of
 shares to
 employees and
 directors.......      --          --             928
 Issuance of
 shares for
 exercise of
 options.........      --          --          15,274
 Issuance of
 shares to redeem
 OP units........      --          --          27,896
 Issuance of
 notes receivable
 from
 shareholders and
 affiliates for
 mergers and
 acquisitions....      --          --         (18,617)
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......      --          --             --
 Collections on
 notes receivable
 from
 shareholders and
 affiliates......      --          --           3,116
 Amortization of
 unearned stock
 compensation....      --          --           7,622
 Net loss........      --          --        (158,223)
 Foreign currency
 translation
 adjustment......    2,749         --           2,749
 Unrealized loss
 on securities
 held for sale...      --       (1,245)        (1,245)
                   -------- ------------- ------------
Comprehensive
loss.............                            (156,719)
                   -------- ------------- ------------
 Cash dividends..      --          --         (87,390)
 Stock dividends
 declared........      --          --           6,862
                   -------- ------------- ------------
Balance, December
31, 1998.........   $2,749     $(1,245)   $ 2,603,037
                   -------- ------------- ------------
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-6
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     (in thousands, except share amounts)
<TABLE>
<CAPTION>
                    Preferred Stock              Common Stock
                    -----------------  -----------------------------------
                                                                                         Receivables                 Accumulated
                                         Patriot       Wyndham              Additional       From        Unearned    Deficit and
                      Number     Par      Number        Number       Par     Paid in     Shareholders     Stock       Dividend
                    of Shares   Value   of Shares     of Shares     Value    Capital    and affiliates Compensation Distributions
                    ----------  -----  ------------  ------------  -------  ----------  -------------- ------------ -------------
 <S>                <C>         <C>    <C>           <C>           <C>      <C>         <C>            <C>          <C>
 Settlement of
 forward equity
 contracts.......          --    --    (100,701,863) (100,701,863)  (2,014)   (327,466)         --           --              --
 Merger of PAH
 Inc. into
 Wyndham
 International
 Inc.............   (4,860,876)  (50)  (142,865,949)    4,860,876   (1,380)      1,430          --           --              --
 Exchange of Old
 Wyndham
 preferred stock
 to common
 stock...........   (3,562,354)  (36)           --      3,562,354       36         --           --           --              --
 Redemption of
 PAH Inc.
 Preferred B
 Stock...........     (558,656)   (5)           --            --       --      (13,961)         --           --             (896)
 Issuance of
 shares net of
 offering
 expenses........   10,000,000   100     29,239,336    29,239,336      585     917,306          --           --              --
 Issues of shares
 to employees and
 directors.......          --    --         538,496       955,757       14      11,820          --          (611)            --
 Issuance of
 shares to redeem
 OP units........          --    --         268,333    15,390,452      156     114,381          --           --              --
 Issuance of
 shares for
 mergers and
 acquisition of
 properties......          --    --             --      1,336,276       13       6,030           -           --              --
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......          --    --             --            --       --          --          (846)         --              846
 Amortization of
 unearned stock
 compensation....          --    --             --            --       --          --           --         5,850             --
 Retirement of
 stock...........          --    --             --       (971,139)      (8)    (15,307)         --           --              --
 Net loss........          --    --             --            --       --          --           --           --       (1,071,969)
 Foreign currency
 translation
 adjustment......          --    --             --            --       --          --           --           --              --
 Unrealized loss
 on securities
 held for sale...          --    --             --            --       --          --           --           --              --
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Comprehensive
 loss............
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Interstate Spin-
 off Dividend....          --    --             --            --       --          --           --           --          (64,602)
 Cash Dividends..          --    --             --            --       --          --           --           --          (14,711)
 Stock
 Dividends.......      344,662     4            --            --       --       34,462          --           --          (34,466)
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Balance as of
 December 31,
 1999............   10,344,662  $103            --    167,193,696  $ 1,672  $3,753,235     $(17,210)      $ (255)    $(1,591,307)
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Issuance of
 shares net of
 offering
 expenses........          --    --             --        222,470        2       1,398          --           --              --
 Redemption of
 Preferred A
 Stock...........          (18)  --             --            210      --          --           --           --              --
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......          --    --             --            --       --          --            49          --              975
 Amortization of
 unearned stock
 compensation....          --    --             --            --       --          --           --           255             --
 Net loss........          --    --             --            --       --           -           --           --         (324,671)
 Foreign currency
 translation
 adjustment......          --    --             --            --       --          --           --           --              --
 Unrealized loss
 on securities
 held for sale...          --    --             --            --       --          --           --           --              --
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Comprehensive
 loss............
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Cash Dividends..          --    --             --            --       --          --           --           --          (29,248)
 Stock
 Dividends.......      742,746     8            --            --       --       74,267          --           --          (74,275)
                    ----------  ----   ------------  ------------  -------  ----------     --------       ------     -----------
 Balance as of
 December 31,
 2000............   11,087,390  $111            --    167,416,376  $ 1,674  $3,828,900     $(17,161)       $ --      $(2,018,526)
                    ==========  ====   ============  ============  =======  ==========     ========       ======     ===========
<CAPTION>
                      Accumulated Other
                     Comprehensive Income
                    -----------------------
                               Unrealized
                    Foreign      Loss on
                    Currency   Securities
                    Exchange  Held for Sale    Total
                    --------- ------------- ------------
 <S>                <C>       <C>           <C>
 Settlement of
 forward equity
 contracts.......       --           --        (329,480)
 Merger of PAH
 Inc. into
 Wyndham
 International
 Inc.............       --           --             --
 Exchange of Old
 Wyndham
 preferred stock
 to common
 stock...........       --           --             --
 Redemption of
 PAH Inc.
 Preferred B
 Stock...........       --           --         (14,862)
 Issuance of
 shares net of
 offering
 expenses........       --           --         917,991
 Issues of shares
 to employees and
 directors.......       --           --          11,223
 Issuance of
 shares to redeem
 OP units........       --           --         114,537
 Issuance of
 shares for
 mergers and
 acquisition of
 properties......       --           --           6,043
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......       --           --             --
 Amortization of
 unearned stock
 compensation....       --           --           5,850
 Retirement of
 stock...........       --           --         (15,315)
 Net loss........       --           --      (1,071,969)
 Foreign currency
 translation
 adjustment......   (10,325)         --         (10,325)
 Unrealized loss
 on securities
 held for sale...       --           245            245
                    --------- ------------- ------------
 Comprehensive
 loss............                            (1,082,049)
                    --------- ------------- ------------
 Interstate Spin-
 off Dividend....       --           --         (64,602)
 Cash Dividends..       --           --         (14,711)
 Stock
 Dividends.......       --           --             --
                    --------- ------------- ------------
 Balance as of
 December 31,
 1999............   $(7,576)     $(1,000)   $ 2,137,662
                    --------- ------------- ------------
 Issuance of
 shares net of
 offering
 expenses........       --           --           1,400
 Redemption of
 Preferred A
 Stock...........       --           --             --
 Accrued interest
 on notes
 receivable from
 shareholders and
 affiliates......       --           --           1,024
 Amortization of
 unearned stock
 compensation....       --           --             255
 Net loss........       --           --        (324,671)
 Foreign currency
 translation
 adjustment......     7,412          --           7,412
 Unrealized loss
 on securities
 held for sale...     -- --          353            353
                    --------- ------------- ------------
 Comprehensive
 loss............                              (316,906)
                    --------- ------------- ------------
 Cash Dividends..       --           --         (29,248)
 Stock
 Dividends.......       --           --             --
                    --------- ------------- ------------
 Balance as of
 December 31,
 2000............   $  (164)     $  (647)   $ 1,794,187
                    ========= ============= ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-7
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                 Years Ended December 31,
                                             ----------------------------------
                                               2000        1999         1998
                                             ---------  -----------  ----------
<S>                                          <C>        <C>          <C>
Cash flows from operating activities:
Net loss...................................  $(324,671) $(1,071,969) $ (158,223)
Adjustments to reconcile net loss to net
 cash provided by operating activities:
 Depreciation and amortization.............    304,785      302,890     231,233
 Amortization of unearned stock
  compensation.............................        255        5,850       7,622
 Amortization of deferred loan costs.......     27,566       34,946      26,914
 Net loss on sale of assets................     12,987       10,702       9,453
 Impairment loss on assets.................    486,658      203,731      51,081
 Write-off of intangible assets............        --       133,143         --
 Write-off of deferred acquisition costs...      1,208        8,349         --
 Provision for bad debt expense............      1,925        7,898         --
 Recognition of deferred termination fee...    (14,746)         --          --
 Cost of acquiring leaseholds..............        --           --       64,407
 Treasury lock settlement..................        --           --       49,225
 Award of unearned stock compensation and
  other....................................        --           --          928
 Equity in losses (earnings) of
  unconsolidated subsidiaries..............     (2,491)       7,746      (9,498)
 Minority interest in income of Operating
  partnerships.............................        --        (6,642)    (12,652)
 Minority interest in consolidated
  subsidiaries.............................      7,569        6,017       9,427
 Deferred income taxes.....................   (226,133)     539,313     (14,665)
 Extraordinary items.......................        --         9,838      31,817
 Changes in assets and liabilities:
  Accounts receivable......................     (1,011)      (6,168)    (65,927)
  Prepaid expenses and other assets........     15,001        6,552      47,020
  Lease revenue receivable.................        --         3,440         924
  Deferred income..........................      7,079          --          --
  Accounts payable and other accrued
   expenses................................    (49,143)       6,666     (24,593)
                                             ---------  -----------  ----------
   Net cash provided by operating
    activities.............................    246,838      202,302     244,493
                                             ---------  -----------  ----------
Cash flows from investing activities:
Acquisition of hotel properties and related
 working capital assets net of cash
 acquired..................................    (20,626)    (264,086) (1,946,227)
Improvements and additions to hotel
 properties................................   (202,292)    (230,653)   (189,885)
Proceeds from sale of assets...............    337,630      205,553      77,325
Payment of contingent liability............    (32,825)         --          --
Acquisition of management contracts........    (67,372)         --          --
Termination of management contracts........        --        16,086         --
Changes in restricted cash accounts........      4,410      (66,611)    (30,864)
Change in other assets.....................        610         (772)        880
Collection on other notes receivable.......        569        2,681      12,009
Advances on other notes receivable.........     (1,273)         --          --
Deferred acquisition costs.................     (1,906)        (613)    (19,926)
Investment in unconsolidated subsidiaries..     (5,022)     (10,077)    (24,557)
Distributions from unconsolidated
 subsidiaries..............................     25,369          --          --
Principal payments received on mortgage and
 other notes receivable....................        --         2,357         --
Investment in other mortgage and other
 notes receivable..........................        --       (10,429)     14,022
                                             ---------  -----------  ----------
   Net cash provided by (used in) investing
    activities.............................     37,272     (356,564) (2,107,223)
                                             ---------  -----------  ----------
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-8
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                 Years Ended December 31,
                                              --------------------------------
                                                2000       1999        1998
                                              --------  ----------  ----------
<S>                                           <C>       <C>         <C>
Cash flows from financing activities:
Borrowings under line of credit facility and
 mortgage notes.............................   533,081   2,930,205   2,883,719
Repayments of borrowings under credit
 facility and other debt....................  (841,257) (3,153,525)   (997,436)
Payment of deferred loan costs..............    (8,492)   (110,655)    (39,923)
Proceeds from issuance of common stock......       --          --      273,995
Net proceeds from issuance of preferred
 stock......................................       --      921,702         --
Cost to retire Patriot series B preferred
 stock......................................       --      (13,966)        --
Cash settlement with Interstate upon spin-
 off........................................       --      (17,102)        --
Contributions received from minority
 interest in consolidated subsidiaries......       --          180       5,952
Distribution made to minority interest in
 other partnerships.........................    (9,711)    (29,907)    (11,081)
Collections on notes receivable from
 shareholders...............................       --          --        3,116
Payments to redeem OP units.................       (64)        --          --
Dividends and distributions paid............   (29,248)    (15,607)   (124,834)
Proceeds received from amendments to
 financial derivatives......................     6,654         --          --
Premiums paid for financial derivatives.....   (34,360)        --          --
Forward equity settlements..................       --     (329,480)    (52,873)
Other.......................................       --           44         --
                                              --------  ----------  ----------
  Net cash (used in) provided by financing
   activities...............................  (383,397)    181,889   1,940,635
                                              --------  ----------  ----------
Foreign currency translation adjustment.....     7,414      (6,379)      2,749
Net (decrease) increase in cash and cash
 equivalents................................   (91,873)     21,248      80,654
Cash and cash equivalents at beginning of
 year.......................................   144,333     123,085      42,431
                                              --------  ----------  ----------
Cash and cash equivalents at end of year....  $ 52,460  $  144,333  $  123,085
                                              ========  ==========  ==========
Supplemental disclosure of cash flow
 information:
  Cash paid during the year for interest....  $356,217  $  338,675  $  224,444
                                              ========  ==========  ==========
  Cash paid during the year for income
   taxes....................................  $ 24,076  $   31,978  $   26,729
                                              ========  ==========  ==========
</TABLE>

See Note 16 for additional Supplemental disclosure of cash flow information.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-9
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (dollars in thousands, except share amounts)

1. Organization:

   Wyndham International, Inc. (together with its consolidated subsidiaries,
"Wyndham" or the "Company") is a fully integrated and multi-branded hotel
enterprise that operates primarily in the upscale and luxury segments. Through
a series of acquisitions, Wyndham has since 1995 grown from 20 hotels to
become one of the largest U.S. based hotel operators. As of December 31, 2000,
Wyndham owned interests in 139 hotels with aggregate of over 39,800 guestrooms
and leased 38 hotels from third parties with over 5,800 guestrooms. In
addition, Wyndham managed 35 hotels for third party owners with over 10,900
guestrooms and franchises 30 hotels with over 5,600 guestrooms.

   Wyndham International, Inc., as currently constituted, was formed through
the June 30, 1999 restructuring and reorganization of Patriot American
Hospitality, Inc. (collectively with its subsidiaries, "Patriot") and Wyndham
International, Inc. (collectively with its subsidiaries, "Old Wyndham"). Prior
to June 30, 1999, the shares of common stock of Patriot were paired and traded
together with the shares of Old Wyndham, on a one for one basis, as a single
unit pursuant to a stock pairing arrangement, and were referred to as paired
shares.

   Patriot was formed April 17, 1995 as a self-administered real estate
investment trust ("REIT") for the purpose of acquiring equity interests in
hotel properties. Old Wyndham was formed in connection with Patriot's merger
with and into California Jockey Club and Bay Meadows Operating Company on July
1, 1997 (the "Cal Jockey Merger").

   Effective June 30, 1999, a subsidiary of Old Wyndham merged with and into
Patriot with Patriot being the surviving entity and becoming a subsidiary of
Old Wyndham. In connection with this restructuring, the pairing agreement
between Patriot and Old Wyndham was terminated. Patriot's status as a REIT
terminated effective January 1, 1999, and Patriot became a taxable corporation
as of that date. This merger converted each previously outstanding paired
share into one share of Wyndham class A common stock.

   The restructuring was reflected as a reorganization of two companies under
common control and was accounted for in a manner similar to that used in
pooling of interest accounting. As such, there was no revaluation of the
assets and liabilities of Old Wyndham or Patriot.

2. Summary of Significant Accounting Policies:

 Principles of Consolidation

   The consolidated financial statements include the accounts of Wyndham, its
wholly-owned subsidiaries, and the partnerships, corporations, and limited
liability companies in which Wyndham owns a controlling interest, after the
elimination of all significant intercompany accounts and transactions.

   Partnerships-- The condition for control is the ownership of a majority
voting interest and the ownership of the general partnership interest.

   Corporations and Limited Liability Companies-- The condition for control is
the ownership of a majority voting interest.

   The financial statements prior to the reorganization are presented on a
combined basis and include the combined accounts of Patriot and its
subsidiaries with Old Wyndham and its subsidiaries.

 Investment in Real Estate and Related Improvements

   The hotel properties are stated at cost. Depreciation is computed using the
straight-line method based upon estimated useful lives of the assets of 35 to
40 years for the hotel buildings and improvements and 3 to 10 years

                                     F-10
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

for furniture, fixtures and equipment. These estimated useful lives are based
on management's knowledge of the properties and the industry in general.

   Maintenance and repairs are charged to operations as incurred; major
renewals and betterments are capitalized. Upon the sale or disposition of a
fixed asset, the asset and the related accumulated depreciation are removed
from the accounts and the gain or loss is included in operations.

   Interest associated with borrowings used to finance substantial hotel
renovations is capitalized and amortized over the estimated useful life of the
assets. Interest of $3,170, $6,910 and $12,112 was capitalized in 2000, 1999
and 1998, respectively.

   In accordance with the Statement of Financial Accounting Standards ("SFAS")
No. 121, the Company periodically reviews the carrying value of each property
to determine if events and circumstances exist indicating that the assets
might be impaired. If facts or circumstances support the possibility of
impairment, the Company will prepare projections of undiscounted cash flows,
without interest charges, of the specific property, to determine if the
amounts estimated to be generated by those assets are less than the carrying
amounts of those assets. If impairment is indicated, an adjustment will be
made to the carrying amount based on the difference between the sum of the
expected future discounted net cash flows and the carrying amount of the
asset. During, 2000, the Company recorded an impairment of $39,654 in
operating expenses for assets held for use.

   When management identifies an asset held for sale, the Company estimates
the net selling price of such asset. If in management's opinion, the net
selling price of the asset is less than the carrying amount of the asset, a
reserve for loss is established. Depreciation is no longer recorded once
management has identified an asset held for sale. Net selling price is
estimated as the amount at which the asset could be bought or sold (fair
value) less costs to sell. Fair value is determined at prevailing market
conditions, appraisals or current estimated net sales proceeds from pending
offers, if appropriate. The Company recorded impairment of $361,571 and
$70,912 in operating expenses on assets held for sale for the years ended
December 31, 2000 and 1999, respectively (See Note 3).

   During 1999, the Company also recorded a restructuring charge of $132,819
associated with write-down of assets to estimated fair market value, as the
Company will exit from these business sectors. The Company also recognized
approximately $12,987, and $10,702, net of impairment, of losses related to
assets sold during 2000 and 1999, respectively.

 Cash and Cash Equivalents

   All highly liquid investments with an original maturity date of three
months or less when purchased are considered to be cash equivalents.

 Restricted Cash

   Restricted cash includes real estate tax, insurance, interest, and capital
reserve deposits required pursuant to certain of the Company's mortgage loan
and lease requirements.

 Inventories

   Inventories consist of food, beverages, china, linen, glassware and
silverware and are stated at cost, which approximates market.

                                     F-11
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Investment in Unconsolidated Subsidiaries

   The Company's investments in unconsolidated subsidiaries include
investments in 13 entities ranging from approximately 1% to 50%. Investments
in partnerships and joint ventures are accounted for using the equity method
of accounting when the Company has a 20% or more ownership interest or
exercises significant influence over the venture. If the Company's ownership
is less than 20% and does not exercise significant influence the investment is
accounted under the cost method. During 2000, the Company recorded an
impairment loss of $40,259 as a result of changes in the estimated fair value
for certain investments held for sale.

 Management contracts, trade names and franchise costs

   The costs associated with the acquisition of management contracts, trade
names and franchises have been recorded as deferred costs. Amortization of
management contracts is computed using the straight-line method over the term
of the related management agreements. During 2000, the Company recognized
$45,174 of impairment for management contracts lost. Amortization of trade
names and franchise costs is computed using the straight-line method over
estimated useful lives ranging from 12 to 20 years.

 Leaseholds

   The costs associated with the acquisition of leaseholds for hotel
properties leased from third party owners have been recorded as deferred
costs. Leasehold costs are amortized using the straight-line method over the
terms of the related leasehold agreement.

 Goodwill and intangibles

   Goodwill and intangibles recognized in connection with the acquisition of
certain businesses are amortized utilizing the straight-line method over a
period of 10 to 40 years. The carrying value of goodwill is reviewed based on
undiscounted cash flows over the remaining amortization period. Should this
review indicate that the goodwill will not be recoverable, a reserve for
impairment is established. During 1999, the Company recorded a write-down of
goodwill and intangibles of $112,702, as a result of the Company's
restructuring plan.

 Deferred Expenses

   Deferred expenses consist of the following:
<TABLE>
<CAPTION>
                                                               December 31,
                                                             ------------------
                                                               2000      1999
                                                             --------  --------
   <S>                                                       <C>       <C>
   Deferred loan costs...................................... $144,175  $140,038
   Costs of non-compete agreements..........................    1,479     1,479
   Franchise fees...........................................    1,024     1,147
   Other....................................................       40     1,717
                                                             --------  --------
                                                              146,718   144,381
   Less: accumulated amortization...........................  (42,244)  (46,614)
                                                             --------  --------
                                                             $104,474  $ 97,767
                                                             ========  ========
</TABLE>

   Deferred loan costs are amortized to interest expense on a straight-line
basis (which approximates the interest method) over the terms of the related
loans, which range from one to ten years. Costs of non-compete agreements are
amortized using the straight-line method over the terms of the related
agreement. Franchise costs are amortized using the straight-line method over
the terms of the related franchise agreements.

                                     F-12
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Other Assets

   Insurance premiums included in other assets are expensed on a pro-rata
basis over the life of the related policies. Security deposits paid in
connection with certain leasehold agreements of approximately $41,403 and
$46,109 are included in long term other assets for 2000 and 1999,
respectively.

 Dividends

   At June 30, 1999, as a result of the reorganization, Patriot's status as a
REIT terminated effective January 1, 1999, and Patriot became a taxable
corporation as of that date. The Company does not anticipate paying a dividend
to its common shareholders.

 Deposits

   Deposits represent cash received from guests for future hotel reservations
at the hotels that Wyndham owns and leases.

 Income Taxes

   Wyndham records its provision for income taxes in accordance with SFAS No.
109, "Accounting for Income Taxes". Under the liability method of SFAS No.
109, deferred taxes are determined based on the difference between the
financial statements and tax bases of assets and liabilities using enacted tax
rates in effect in the years the differences are expected to reverse (see Note
12).

   In 1999, Wyndham recorded a one-time charge of $675,000 to establish a
deferred tax liability that resulted from Patriot's change in tax status from
a REIT to a C corporation, as required by SFAS No. 109. This charge is
included in income tax expense in the accompanying 1999 consolidated statement
of operations.

 Minority Interest in the Operating Partnerships

   Minority interest in the Operating Partnerships includes adjustments for
the minority partners' share of the net income as defined by the partnership
agreement and certain other adjustments for the issuance or redemption of OP
units.

 Minority Interest in Consolidated Subsidiaries

   The Company has entered into a number of joint ventures in which a third
party owns a minority interest. For financial reporting purposes, the
financial position and results of operations for each joint venture is
included in the consolidated financial statements of the Company.

 Stock Dividend

   On December 22, 1998, Patriot declared a stock dividend of $0.44 per share
of common stock for the fourth quarter of 1998. The dividend was payable on
January 25, 1999 to shareholders of record on December 30, 1998. Each
shareholder received the option to receive the dividend in the form of
additional paired shares or shares of Series B Cumulative Perpetual Preferred
Stock, par value $0.01 per share, of Patriot.

   Per share data (including dividends), weighted average shares outstanding
and all stock option activity have been restated to reflect the stock
dividend.

                                     F-13
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Earnings per Share

   The Company has adopted SFAS No. 128 "Earnings Per Share" which specifies
the computation, presentation and disclosure requirements for basic earnings
per share and diluted earnings per share. Earnings per share disclosures for
all periods presented have been calculated in accordance with requirements of
SFAS No. 128. Basic earnings per share is computed based upon the weighted
average number of shares of common stock outstanding during the period
presented. Shares of common stock granted to officers and employees of the
Company are included in the computation only after the shares become fully
vested. Diluted earnings per share is computed based upon the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding during the periods presented. The diluted earnings per share
computations also include the dilutive impact of options to purchase common
stock which were outstanding during the period calculated by the "treasury
stock" method, unvested stock grants and other restricted awards to officers
and employees, convertible preferred shares and collateral shares issued in
conjunction with certain forward equity transactions (see Note 7).

 Stock Compensation

   The Company accounts for its stock compensation arrangements under the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"), and intends to continue to do so. See
Note 13 for a discussion of the Company's stock compensation arrangements and
pro forma disclosure of the effect on income from operations and earnings per
share of such arrangements pursuant to the requirements of SFAS No. 123,
"Accounting for Stock-Based Compensation."

 Revenue Recognition

   The Company primarily owns, operates and manages hotel properties. Hotel
revenue, management fees, service and other fees, are recognized when earned.

 Foreign Currency Translation

   Financial statements of foreign subsidiaries not maintained using U.S.
dollars are remeasured into the U.S. dollar functional currency for
consolidation and reporting purposes. Assets and liabilities of non-U.S.
operations are translated into U.S. dollars at the exchange rate in effect at
the balance sheet date. Revenues and expenses of non-U.S. operations are
translated at the weighted average exchange rate during the year. Resulting
translation adjustments are reflected in shareholders' equity. Realized
foreign currency gains and losses are included in results of operations.

 Advertising Costs

   The Company participates in various advertising and marketing programs. All
costs are expensed in the period incurred. The Company has recognized
advertising expenses of $52,894, $68,834, and $61,468 for 2000, 1999 and 1998
respectively.

 Self Insurance

   The Company is self-insured for various levels of general liability,
workers' compensation and employee medical coverage. Accrued expenses include
the estimated cost from unpaid incurred claims.

 Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

                                     F-14
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Concentrations

   The Company currently invests primarily in hotel properties. The hotel
industry is highly competitive and the Company's hotel investments are subject
to competition from other hotels for guests. Each of the Company's hotels
competes for guests primarily with other similar hotels in its immediate
vicinity and other similar hotels in its geographic market. The Company
believes that brand recognition, location, quality of the hotel, services
provided and price are the principal competitive factors affecting its hotel
investments.

 Derivative Instruments and Hedging Activities

   Financial Accounting Standards Board Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") requires that all
derivative investments be recorded in the balance sheet at fair value. Changes
in the fair value of derivatives are recorded each period in current earnings
or comprehensive income depending on where a derivative is designated as part
of a hedge transaction, and the type of hedge transaction.

   During 1999, Financial Accounting Standards Board Statement No. 137,
"Accounting for Derivative Instruments and Hedging Activities--deferral of the
Effective Date of the Statement of Financial Accounting Standards No. 133"
("SFAS 137") was issued. This statement amended SFAS 133 by deferring the
effective date to fiscal quarters of all fiscal years beginning after June 15,
2000. The Company will adopt these standards effective January 1, 2001(See
Note 6).

   During 2000, Financial Accounting Standards Board Statement No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging--an
Amendment to the Statement of Financial Accounting Standards No. 133" ("SFAS
138") was issued. This statement amends the accounting and reporting standards
of SFAS 133 for certain derivative instruments and certain hedging activities.

 Seasonality

   The hotel industry is seasonal in nature; however, the periods during which
the Company's hotel properties experience higher revenues vary from property
to property and depend predominantly on the property's location. The Company's
revenues typically have been higher in the first and second quarters than in
the third and fourth quarters.

 Reclassification

   Certain prior year balances have been reclassified to conform to the
current year presentation with no effect on previously reported amounts of
losses or accumulated deficits.

                                     F-15
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


3. Investment in Real Estate and Related Improvements and Assets Held for
Sale:

   Investment in Real Estate and Related Improvements and Assets Held for Sale
consists of the following:

<TABLE>
<CAPTION>
                                                   December 31, 2000
                                          ------------------------------------
                                          Investment in   Assets
                                           Real Estate   Held for
                                          Held for Use     Sale       Total
                                          ------------- ----------  ----------
   <S>                                    <C>           <C>         <C>
   Land..................................  $  318,189   $  114,601  $  432,790
   Land held for development.............      33,050          --       33,050
   Buildings and improvements............   2,987,909    1,447,517   4,435,426
   Furniture, fixtures and equipment.....     620,634      207,503     828,137
   Renovations in progress...............     144,694       13,502     158,196
                                           ----------   ----------  ----------
                                            4,104,476    1,783,123   5,887,599
   Less: impairment......................     (91,584)    (381,609)   (473,193)
   Less: accumulated depreciation........    (497,669)    (205,242)   (702,911)
                                           ----------   ----------  ----------
                                           $3,515,223   $1,196,272  $4,711,495
                                           ==========   ==========  ==========
<CAPTION>
                                                   December 31, 1999
                                          ------------------------------------
                                          Investment in   Assets
                                           Real Estate   Held for
                                          Held for Use     Sale       Total
                                          ------------- ----------  ----------
   <S>                                    <C>           <C>         <C>
   Land..................................  $  422,744   $   43,829  $  466,573
   Land held for development.............      68,266          --       68,266
   Buildings and improvements............   4,155,246      484,904   4,640,150
   Furniture, fixtures and equipment.....     701,379      109,364     810,743
   Renovations in progress...............      44,729          --       44,729
                                           ----------   ----------  ----------
                                            5,392,364      638,097   6,030,461
   Less: impairment......................         --      (138,789)   (138,789)
   Less: accumulated depreciation........    (408,179)     (70,315)   (478,494)
                                           ----------   ----------  ----------
                                           $4,984,185   $  428,993  $5,413,178
                                           ==========   ==========  ==========
</TABLE>

   Management classifies certain assets as held for sale based on management
having the authority and intent of entering into commitments for sale
transactions expected to close in the next twelve months. Based on estimated
sale proceeds, during 2000, the Company recorded a provision for loss on
assets held for sale of $361,571. The assets held for sale had combined
earnings before interest, depreciation, amortization and taxes ("EBITDA") of
$148,128, net of amounts owned by third party limited partners. The Company
also recorded a provision of $39,654 during 2000 on real estate assets held
for use where current facts, circumstances and analysis indicate that the
assets might be impaired. During 2000, the Company sold assets for which
impairments of $66,821 had been previously recorded.


   At December 31, 1999, the Company had $428,993 of assets held for sale, net
of impairment, which were expected to be sold during 2000. The assets held for
sale at December 31, 1999 had combined earnings before interest, depreciation,
and taxes of $70,023 for the year then ended.

 Investments in Hotel Properties

   During 2000, the Company invested approximately $20,626 in the acquisition
of the remaining interest in Wyndham Chicago. The Company now consolidates
mortgage debt associated with the property of $38,910.

                                     F-16
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   During 1999, the Company invested approximately $210,123 in the acquisition
of four hotels with a total of over 900 guestrooms. These acquisitions were
financed primarily with funds drawn on the credit facility and the assumption
of mortgage debt in the amount of approximately $24,593.

   During 1999, the Company acquired the remaining minority interests in 9
hotel assets. The acquisition of these interests was financed through cash of
approximately $4,230, additional mortgage indebtedness totaling $49,800, and
the sale of an additional 10% interest in another hotel.

   On July 30, 1999, a wholly-owned subsidiary of Wyndham merged with Gencom
Interest, Inc. As a result of the merger, Wyndham acquired the remaining
34.52% interest in the Omni Baltimore hotel, and 421,161 shares of Wyndham
class A common stock owned by Gencom Interest, Inc. The total purchase
consideration for the merger was approximately $6,043, which consisted of
1,336,276 shares of Wyndham class A common stock.

 Asset Sales

   During 2000, the Company sold 26 hotel properties, including the Clubhouse
Inn brand and received net cash proceeds of approximately $174,978, after the
repayment of mortgage debt of $70,406. The Company also sold investments in
three hotels, two parcels of land, retail space and a garage and received net
cash proceeds of $61,355 after the repayment of debt of $7,847 and a note
receivable of $4,319. The Company recorded a net loss of $12,830, net of
impairment of $66,821 as a result of these transactions.

   Two of the hotel properties sold in 2000 were leased back to the Company
under two long-term operating leases. The leases have an initial term of 15
years and three optional five-year renewal periods exercisable at the
Company's option. Under the terms of the leases, yearly base rent aggregates
$4,345 plus a contingent rent paid based on a percentage of revenues over
certain thresholds as specified in the leases. The leases require the Company
to pay substantially all expenses associated with the operation of the leased
hotels, including real estate taxes and insurance.

   Effective March 31, 2000, the Company sold its Sierra Suites hotel brand,
properties and related assets (the "Sierra transaction") to Sierra Suites
Hotel Company, L.P., an entity affiliated with Mr. Rolf Ruhfus, a director of
Wyndham, for approximately $53,000. The transaction included the sale by the
Company of one owned and three leased properties, 17 franchise and management
contracts for Sierra Suites and nine management contracts for Summerfield
Suites. Pursuant to the purchase agreement, the Company received net cash
proceeds of $23,045 and relieved $29,770 of future obligations due under the
purchase and sale agreement of the acquisition of SF Hotel Company L.P. in
June of 1998 (the "Summerfield transaction"). As a result of the transaction,
the Company recorded a net loss of $157.

   During 1999, the Company sold 21 hotel properties, including 11 historic
hotels in London (see Note 4). The Company received net cash proceeds of
approximately $116,424, after the repayment of mortgage debt of $62,865, and a
mortgage note receivable in the amount of $6,000. The Company also sold its
interest in Bay Meadows Racecourse and a parcel of land adjacent to the Bay
Meadows Racecourse and received cash proceeds of approximately $6,926.

                                     F-17
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Interstate

   Effective June 18, 1999, Patriot distributed approximately 92% of the
shares of Interstate Hotel Corporation ("IHC") in the form of a dividend to
shareholders. Shareholders of record on June 7, 1999 received one share of New
Interstate stock for every thirty shares of Patriot common stock, Patriot
series A preferred stock, Old Wyndham series A and B preferred stock, Patriot
common and preferred OP units, and Old Wyndham class A and C preferred OP
units. The remaining 8% was owned equally by Wyndham and Marriott
International, Inc. ("Marriott").

   As a result of the spin-off, the Company owned an approximate 55% non-
controlling in Interstate Hotels, LLC ("IH LLC"), a subsidiary of IHC that
operates the third-party management business that Patriot acquired from
Interstate Hotel Company ("Interstate").

   During 2000, Wyndham agreed to the redemption of its aggregate 55% non-
voting economic interest in IH LLC (the "Wyndham Interest"), a principal
operating subsidiary of IHC. IH LLC transferred to Wyndham a management
agreement for one hotel owned by Wyndham and amended management agreements
with respect to six other hotels owned by Wyndham to reduce the management
fees and to permit termination by the owner upon 30 days notice. In addition,
approximately 9% of the Wyndham Interest was redeemed by IH LLC and
substantially all of the remainder was converted into a preferred membership
interest in IH LLC. At any time on or after July 1, 2001, both IH LLC and
Wyndham have the right to require that IH LLC redeem the preferred membership
interest for approximately $12,682 to be paid with a combination of cash and
promissory notes. The portion of the Wyndham Interest that was not converted
into a preferred membership interest will remain outstanding after the
preferred membership interest is redeemed. Thereafter, at any time on or after
July 1, 2004, both IH LLC and Wyndham have the right to require that IH LLC
redeem the remaining common interest at an amount that is the lesser of (a)
the product of (i) five times IH LLC's EBITDA as of December 31, 2003 and (ii)
the percentage of total equity interest in IH LLC which is represented by the
remaining interest, or (b) approximately $433. As additional consideration for
the redemption and conversion of the Wyndham Interest, Wyndham caused its
representative on IHC's Board of Directors to resign and relinquished its
right to appoint a member to IHC's Board of Directors in the future. In
addition, Wyndham granted IHC an option exercisable within 90 days of October
20, 2000, to acquire all of IHC's stock owned by Wyndham at a weighted average
trading price per share, provided that the purchase price not be less than
$3.00 per share nor more than $4.00 per share. On December 3, 2000, the common
stock was acquired for approximately $597. As a result of this transaction,
the Company recognized an impairment charge on its investment in IH LLC of
$16,499.

4. Restructuring charges:

   During 1999, the Company recorded a restructuring charge of $285,267 as a
result of the termination of the paired share structure (See Note 13) and
management's decision to streamline its organization and focus on its core
brands and strategic assets. The restructuring activities (shown below in
tabular format) primarily relate to: (1) the termination of the paired share
structure, resulting in the write-down of the unamortized intangible asset,
and elimination of job responsibilities, resulting in the costs to sever
employees in New York and Dallas, (2) the exiting of the European market for
its non-branded assets, resulting in the write-down of assets held for sale to
estimated fair value, the write-down of goodwill, the reduction in the
European workforce, lease abandonments, and other costs necessary to reduce
the infrastructure in Arcadian International, (3) the exiting of the limited
service hotel sector, resulting in a write-down of those assets held for sale
and the write-off of management contracts, (4) the closure of the Phoenix
division office, resulting in the costs to sever employees and lease
abandonments, (5) the closure of the Wichita division office, resulting in the
costs to sever employees, and (6) the elimination of certain brands, resulting
in the write-down of those tradename intangible assets.

                                     F-18
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   The Company plans associated with these costs were substantially completed
during 2000 with many of the costs associated with the reduction in workforce
being incurred and paid in 1999. The total number of employees terminated was
177.

   During 2000, continuing cash payments were made against the accrued
liability as shown in the table below. The remaining accruals will be relieved
throughout fiscal 2001, as leases expire and severance payments are made.

<TABLE>
<CAPTION>
                                                      Accrued            Accrued
                                                      Balance            Balance
                                        Restructuring    at                 at
Description               Cash/Non-Cash    Charge     12/31/99  Activity 12/31/00
-----------               ------------- ------------- --------  -------- --------
<S>                       <C>           <C>           <C>       <C>      <C>
Organizational
 Restructuring
Write-down of intangible
 assets.................  Non-cash        $ (83,094)  $   --     $  --    $ --
Severance packages......  Cash/non-cash      (4,675)     (500)      250    (250)
Downsizing European
 division
Write-down of assets
 held for sale..........  Non-cash          (69,491)      --        --      --
Write-down of intangible
 assets.................  Non-cash          (28,394)      --        --      --
Severance packages......  Cash               (3,578)   (2,458)    2,396     (62)
Lease cancellations and
 commitments............  Cash               (1,907)   (1,907)    1,818     (89)
Other exit costs........  Cash               (4,062)   (2,408)    2,287    (121)
Exiting limited service
 market sector
Write-down of assets
 held for sale..........  Non-cash          (63,328)      --        --      --
Write-down of intangible
 assets.................  Non-cash           (8,834)      --        --      --
Closing the Phoenix
 division office
Severance packages......  Cash               (2,006)     (312)      312     --
Lease cancellations and
 other commitments......  Cash                 (492)     (321)      321     --
Closing of the Wichita
 division office
Severance packages......  Cash               (1,872)   (1,872)    1,872     --
Elimination of certain
 hotel brands
Write-down of intangible
 assets.................  Non-cash          (12,821)      --        --      --
Other
Other Exit Costs........  Cash                 (713)      --        --      --
Effect of foreign
 currency translation...                        --          8        10      18
                                          ---------   -------    ------   -----
  Total.................                  $(285,267)  $(9,770)   $9,266   $(504)
                                          =========   =======    ======   =====
</TABLE>

5. Line of Credit Facility, Term Loans, Mortgage and Other Notes and Capital
Lease Obligations:

   Effective September 25, 2000, the Company amended certain terms of its
credit agreement. As a part of the amendment, the applicable interest rate
margins of the $1,300,000 term loan would be increased by 0.50% if the balance
of the increasing rate term loans in the aggregate amount was greater than
$325,000, or 0.25% should the balance be equal to or less than $325,000. As of
December 31, 2000, the balance of the increasing rate loans was $617,000.

   In connection with the acquisition of the controlling interest in Wyndham
Chicago, the Company now consolidates mortgage debt associated with the
property of approximately $38,910; the loan bears interest at LIBOR plus 3.5%
and matures August 20, 2001.

   Effective June 30, 2000, the Company completed a $116,000 first mortgage
and mezzanine financing through Bear, Stearns Funding, Inc. on the Wyndham El
Conquistador Resort & Country Club. The first

                                     F-19
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands, except share amounts)

mortgage in the amount of $106,000 bears interest at LIBOR plus 2.35%.
Principal payments on the loan are due beginning October 1, 2004, with a final
balloon payment due on July 1, 2005. The mezzanine financing in the amount of
$10,000 also bears interest at LIBOR plus 2.35%. Principal payments on the loan
are due monthly beginning August 1, 2000 through maturity October 1, 2004.
Proceeds from these loans were used to retire existing indebtedness.

  In addition, the Company refinanced a $15,000 loan with the Government
Development Bank. The loan bears interest at LIBOR plus 1.5% and is secured by
a first mortgage on approximately 150 acres of real property located in
Fajardo, Puerto Rico, adjacent to the Wyndham El Conquistador resort.

Outstanding borrowings under the line of credit facilities, term loans, various
mortgage and other notes and capital lease obligations consist of the
following:

<TABLE>
<CAPTION>
            Description                 2000         1999     Amortization   Interest Rate       Maturity
            -----------              -----------  ----------  ------------ ------------------ ---------------
<S>                                  <C>          <C>         <C>          <C>                <C>
Revolving Credit Facility (1)......  $    85,000  $  270,000       None      Libor + 3.00%(1)   June 30, 2004
Term Loans.........................    1,300,000   1,300,000        (2)      Libor + 4.25%(3)   June 30, 2006
Increasing Rate Loans..............      617,000     650,000       None      Libor + 4.75%(4)   June 30, 2004
Bear, Stearns Funding, Inc. (5)....      340,960     346,000       None    Libor + 0.82%-4.5%    July 1, 2004
Lehman Brothers Holdings Inc. (6)..      232,533     235,000       None          Libor + 3.5%   June 28, 2002
Metropolitan Life Insurance (7)           97,501      98,529        (8)                 8.08% October 1, 2007
Other Mortgage Notes Payable (9)...      673,273     710,998    Various                  (10)            (10)
Unsecured financing................        3,510       5,633       (11)            5.5%-10.5%            (12)
Capital lease obligations..........       49,173      27,396
                                     -----------  ----------
                                     $ 3,398,950  $3,643,556
Less debt associated with assets
 held for sale.....................     (505,836)    (31,511)
Less current portion...............     (155,728)   (129,700)
                                     -----------  ----------
Long term debt.....................  $ 2,737,386  $3,482,345
                                     ===========  ==========
</TABLE>
--------
(1) The Company has a $500,000 revolving credit facility. Interest rates are
    based upon LIBOR plus spreads varying from 1.25% to 2.75% per annum based
    both on Wyndham's leverage ratio, as defined, and whether any increasing
    rate loans are outstanding. If any of the increasing rate term loans are
    outstanding, the applicable margins shall be increased by 0.25%. The one-
    month LIBOR rate at December 31, 2000 was 6.56%. At December 31, 2000 the
    Company also had outstanding letters of credit totaling $42,804.
    Availability under the revolving credit facility was $372,196 at December
    31, 2000.
(2) On December 30, 2001, the Company is required to repay $10,000 under the
    term loans and $5,000 each six months thereafter, with the final payment of
    principal due on June 30, 2006.
(3) Interest rates are based upon LIBOR plus spreads varying from 2.75% to
    3.50% per annum based both on Wyndham's leverage ratio, as defined, and
    whether any increasing rate loans are outstanding. The applicable margins
    shall be increased by 0.25% so long as the increasing rate term loans
    remains outstanding, and increased by 0.50% so long as the increasing rate
    term loans in an aggregate amount is greater than $325,000, or 0.25% if the
    increasing rate term loans are outstanding in an aggregate amount of less
    than or equal to $325,000.
(4) Interest rates for the increasing rate term loans are based on LIBOR rates
    plus 3.50% through September 30, 1999 and increasing 0.50% every three
    months, with a cap of LIBOR plus 4.75%.
(5) The loan was originally collateralized by 25 hotel properties. During 2000,
    one of those properties was sold, and debt was repaid in the amount of
    $5,040. The net book value of the remaining 24 properties is $601,739, net
    of impairment, as of December 31, 2000.
(6) The loan is collateralized by 10 hotel properties with a net book value of
    $286,138 at December 31, 2000. The loan requires that the borrower make
    principal payments of excess net cash flow when the quarterly debt-service
    coverage ratio is not met. In the first quarter of 2000, the Company failed
    to meet the required debt-service coverage ratio and made a principal
    payment of $2,467.

                                      F-20
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

(7)  The loan is collateralized by 6 Doubletree hotels with a net book value of
     $183,643 at December 31, 2000.
(8)  The loan, which was entered into September 1997, requires monthly payments
     of interest only until October 1, 1997 when monthly payments of principal
     and interest in the amount of $755 are required until the October 1, 2007
     maturity date.
(9)  The loans are collateralized by 22 hotel properties and a parcel of land
     with a net book value of $1,248,680 at December 31, 2000.
(10) Interest rates range from fixed rates of 6.5% to variable rates of LIBOR
     plus 3.50%. The mortgages have a weighted average interest rate at
     December 31, 2000 of 8.74%. Maturity dates range from 2001 through 2023.
(11) Principal amortization is required on one note, of $2,000 per year for
     three years.
(12) Maturity dates range from June 1, 2001 through May 15, 2006.

   Under the terms of the related loan agreements and capital lease
obligations, principal amortization and balloon payment requirements at
December 31, 2000 are as follows for each of the next five years:

<TABLE>
<CAPTION>
     Year                                                              Amount
     ----                                                            -----------
     <S>                                                             <C>
     2001........................................................... $   210,796
     2002...........................................................     326,797
     2003...........................................................      27,889
     2004...........................................................   1,161,725
     2005...........................................................     168,478
     2006 and thereafter............................................   1,503,265
                                                                     -----------
                                                                     $ 3,398,950
                                                                     ===========
</TABLE>

6. Derivatives:

   The Company enters into interest rate swap and cap agreements to modify the
interest characteristics of its outstanding debt. These agreements involve the
exchange of amounts based on a variable interest rate for amounts based on
fixed interest rates over the life of the agreement without an exchange of the
notional amount upon which the payments are based. The differential to be paid
or received as the interest rates change is accrued and recognized as an
adjustment to interest expense related to the debt using a method which
approximates the effective interest method (the accrual accounting method).
The related amount payable to or receivable from counterparties is included in
accrued expenses or other assets.

   The Company also enters into interest rate cap agreements that are designed
to limit its exposure to increasing interest rates and are designated as
hedges of its outstanding debt. An interest rate cap entitles the Company to
receive a payment from the counterparty equal to the excess if any, of the
hypothetical interest expense (strike price) on a specified notional amount at
a current market interest rate over an amount specified in the agreement. The
only amount the Company is obligated to pay the courterparty is the initial
premium. The cost of the agreements (the initial premium) is included in
deferred expenses and amortized to interest expense ratably over the life of
the agreement.

   On March 10, 2000, the Company entered into additional interest rate hedges
for a total notional amount of $1,500,000. Certain of the interest rate swaps
and caps are structured such that each hedge has a series of trigger levels in
which the hedge can become ineffective for any reset period that the 1-month
LIBOR rises above the trigger level; however, the Company can amend the
agreements to increase the trigger levels prior to that occurrence. If LIBOR
resets below the trigger level, the hedge becomes effective again. The Company
paid approximately $34,360 in premiums to enter into these contracts.

                                     F-21
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   The Company also shortened the terms of three existing hedges and received
net proceeds of approximately $6,654. The proceeds received were capitalized
and are included in deferred expenses in the accompanying consolidated balance
sheet. The proceeds will be amortized over the remaining terms of the
contracts as a reduction to interest expense.

   In July 2000, in connection with the refinancing of certain mortgage debt,
the Company entered into two additional amortizing interest rate caps for
notional amounts of $106,000 and $10,000. The interest rate caps have an
interest rate of 9.75% and mature on July 1, 2005 and October 1, 2004,
respectively.

   The fair value of interest rate swap and cap agreements and changes in the
fair value as a result of changes in market interest rates are not recognized
in the financial statements. The estimated unrealized loss on the interest
rate swaps was approximately $24,477 at December 31, 2000, which represent the
amount the Company would pay to terminate the swap agreements based upon
current market rates. The fair value of the interest rate cap agreements is
based upon quoted market prices and was approximately $10,232 at December 31,
3000 which represents the amount the Company would receive if the Company
terminated the agreements based on current market prices.

                                     F-22
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   During 2000, the Company received $15,277 of net proceeds related to the
derivative instruments which has been recognized as an adjustment to interest
expense. The Company paid $6,514, and $2,331 of net incremental interest
expense related to the derivative instruments in 1999 and 1998, respectively.
The following tables represent the derivatives in place as of December 31,
2000:

<TABLE>
<CAPTION>
                          Notional   Maturity     Swap     Cap     Floor       Trigger    FMV at
                           Amount      Date       Rate     Rate    Rate         Level    12/31/00
                         ---------- ---------- ----------  ----    -----     ----------- --------
<S>                      <C>        <C>        <C>         <C>     <C>       <C>         <C>
Type of Hedge
Interest Rate Cap....... $   19,091 03/30/2001    n/a      6.75%    n/a          n/a     $      1
Interest Rate Cap.......     38,000 10/11/2001    n/a      7.83%    n/a          n/a          --
Interest Rate
 Corridor...                550,000 12/07/2002    n/a      5.25%    n/a         7.25%       6,649
Interest Rate Cap--3
 year Knockout..........    100,000 03/06/2003    n/a      4.75%    n/a         7.50%       2,033
Interest Rate Cap--3
 year Knockout..........     75,000 03/06/2003    n/a      4.75%    n/a         7.50%       1,525
Interest Rate Cap--3
 year Knockout..........     75,000 03/06/2003    n/a      4.75%    n/a         7.50%       1,525
Interest Rate Cap.......     18,990 07/03/2004    n/a      6.50%    n/a          n/a          147
Interest Rate Cap.......     27,680 07/03/2004    n/a      7.10%    n/a          n/a          127
Interest Rate Cap.......     42,760 07/03/2004    n/a      8.10%    n/a          n/a           87
Interest Rate Cap.......     42,760 07/03/2004    n/a      9.70%    n/a          n/a           24
Interest Rate Cap.......     27,725 08/02/2004    n/a      8.50%    n/a          n/a           48
Structured Collar (1)...    180,000 11/04/2004    n/a      6.6%(2) 5.65%(2)      n/a       (2,088)
Interest Rate Cap.......      9,113 10/01/2004    n/a      9.75%    n/a          n/a            1
Interest Rate Cap.......    106,000 07/01/2005    n/a      9.75%    n/a          n/a          153
                         ----------                                                      --------
                         $1,312,119                                                      $ 10,232
Interest Rate Swap...... $   29,723 03/30/2001    5.42%     n/a     n/a          n/a          106
Interest Rate Swap......    375,000 03/01/2002    6.26%     n/a     n/a          n/a       (1,897)
Interest Rate Swap......    125,000 03/01/2002    5.56%     n/a     n/a          n/a          254
Interest Rate Swap......    250,000 03/01/2002    5.84%     n/a     n/a          n/a          (90)
Interest Rate Swap--5
 year Knockout..........    150,000 03/06/2005 6.10%-6.75%  n/a     n/a      7.00%-8.50%   (4,897)
Interest Rate Swap--5
 year Knockout..........    550,000 03/07/2005 6.10%-6.75%  n/a     n/a      7.00%-8.50%  (17,953)
                         ----------                                                      --------
                         $1,479,723                                                      $(24,477)
</TABLE>
--------
(1) If on a reset date LIBOR is greater than or equal to 8% but less than
    9.5%, cap shall be of no force. If on a reset date LIBOR is equal to or
    greater than 9.5%, then the cap rate shall be 9.5%.
(2) If on a reset date LIBOR is equal to or less than 5.1%, then the floor
    rate is 5.65%.

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and No. 138.

   SFAS No. 133, as amended, requires that derivatives be recorded on the
balance sheet as an asset or liability at fair value. SFAS No. 133, as
amended, requires that derivatives that are not hedges be recorded at fair
value through earnings. Special accounting for qualifying hedges allows a
derivative instrument's gains and losses to offset

                                     F-23
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

related results on the hedged item in the income statement, to the extent
effective, and requires that a company formally document, designate and assess
the effectiveness of transactions that receive hedge accounting. SFAS No. 133,
as amended, in part, allows special hedge accounting for fair value and cash
flow hedges. The Statement provides that the gain or loss on a derivative
instrument designated and qualifying as a fair value hedging instrument as
well as the offsetting loss or gain on the hedged item attributable to the
hedged risk be recognized currently in earnings in the same accounting period.
SFAS No. 133, as amended, provides that the effective portion of the gain or
loss on a derivative instrument designated and qualifying as a cash flow
hedging instrument be reported as a component of other comprehensive income
and be reclassified into earnings in the same period or periods during which
the hedged forecasted transaction affects earnings. The ineffective portion of
a derivative's change in fair value is recognized currently through earnings
regardless of whether the instrument is designated as a hedge.

   The adoption of the new statement on January 1, 2001 will result in a
liability of $14,245 and a reduction of deferred expenses of $23,239
representing the difference between the carrying value and the fair value of
the derivatives with the offset recognized in the cumulative effect of an
accounting change of $5,436 in the consolidated statement of operations and a
charge of $32,048 in other comprehensive income in the first quarter of 2001.
Additionally, the Company will review the effectiveness of the derivatives at
each reporting date and will recognize the ineffective portion of the
derivatives as a charge to earnings for the period.

   The Company has no embedded derivatives under SFAS 133, as amended, at
December 31, 2000.

 Treasury Rate Lock Agreements

   Patriot previously entered into three treasury interest rate lock
agreements to protect against the possibility of rising interest rates. Under
the rate lock agreements, Patriot received or made payments based on the
difference between specified interest rates, 6.06%, 6.07% and 5.62%, and the
actual 10-year U.S. Treasury interest rate on a principal amount of $525,000.
Patriot settled the entire $525,000 in treasury interest rate locks resulting
in a $49,334 one-time charge to earnings in 1998.

                                     F-24
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


7. Computation of Earnings Per Share:

   Basic and diluted earnings per share have been computed as follows:

 Combined Basic and Diluted Earnings per Share

<TABLE>
<CAPTION>
                                  Year Ended                   Year Ended                   Year Ended
                              December 31, 2000            December 31, 1999            December 31, 1998
                          --------------------------- ----------------------------- ---------------------------
                            Basic    Diluted (2), (3)    Basic     Diluted (2), (3)   Basic    Diluted (2), (3)
                          ---------  ---------------- -----------  ---------------- ---------  ----------------
                                               (in thousands, except per share amounts)
<S>                       <C>        <C>              <C>          <C>              <C>        <C>
Loss before
 extraordinary item.....  $(324,671)    $(324,671)    $(1,062,131)   $(1,062,131)   $(126,406)    $(126,406)
Adjustment for equity
 forwards (1)...........        --            --          (19,372)       (39,322)     (21,151)     (188,392)
Preferred stock
 dividends..............   (103,522)     (103,522)        (50,190)       (50,190)      (7,956)       (7,956)
Excess consideration
 paid to redeem
 preferred stock........        --            --             (115)          (115)         --            --
                          ---------     ---------     -----------    -----------    ---------     ---------
Loss attributable to
 common shareholders
 before extraordinary
 item...................   (428,193)     (428,193)     (1,131,808)    (1,151,758)    (155,513)     (322,754)
Extraordinary loss......        --            --           (9,838)        (9,838)     (31,817)      (31,817)
                          ---------     ---------     -----------    -----------    ---------     ---------
Net loss................  $(428,193)    $(428,193)    $(1,141,646)   $(1,161,596)   $(187,330)    $(354,571)
                          =========     =========     ===========    ===========    =========     =========
Weighted average number
 of shares outstanding..    167,308       167,308         161,255        161,255      137,764       137,764
                          =========     =========     ===========    ===========    =========     =========
Loss per share:
 Loss before
  extraordinary item....  $   (2.56)    $   (2.56)    $     (7.02)   $     (7.14)   $   (1.13)    $   (2.34)
 Extraordinary loss.....        --            --            (0.06)         (0.06)       (0.23)        (0.23)
                          ---------     ---------     -----------    -----------    ---------     ---------
Net loss................  $   (2.56)    $   (2.56)    $     (7.08)   $     (7.20)   $   (1.36)    $   (2.57)
                          =========     =========     ===========    ===========    =========     =========
</TABLE>
--------
(1) The adjustment relates to the mark-to-market adjustment for the forward
    equity transactions with UBS and the Nations Banc, which could be settled
    in cash or stock, at the Company's option. At December 31, 1998, the
    forward equity transaction with PaineWebber could be settled only in
    stock, therefore only the guaranteed return portion is adjusted in the
    earnings per share calculation. There was no mark-to-market adjustment for
    the forward equity transaction with PaineWebber, which was accounted for
    by the Reverse Treasury Method in 1998.
(2) For 2000, the dilutive effect of unvested stock grants of 645, the option
    to purchase 104 shares of common stock and 129,073 shares of preferred
    stock were not included in the computation of diluted earnings per share
    for the year ended December 31, 2000 because they are anti-dilutive. For
    1999, the dilutive effect of unvested stock grants of 803, the option to
    purchase 59 shares of common stock and 64,367 shares of preferred stock
    were not included in the computation of diluted earnings per share for the
    year ended December 31, 1999 because they are anti-dilutive. For 1998, the
    dilutive effect of unvested stock grants of 880, the option to purchase
    753 shares of common stock and shares issued in connection with forward
    equity contracts of 2,507 and 6,613 of preferred shares were not included
    in the computation of diluted earnings per share for the year ended
    December 31, 1998 because they are anti-dilutive. See Note 11 for a
    discussion of the impact of SFAS No. 123 ("Accounting for Stock-Based
    Compensation") on earnings per share.

                                     F-25
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

(3) For 2000, options to purchase 12,157 shares of common stock at prices
    ranging from $2.0625 to $30.40 were outstanding but not included in the
    computation because the options' exercise prices were greater than the
    average market price of the common shares and, therefore, the effect would
    be anti-dilutive. For 1999, options to purchase 9,702 shares of common
    stock at prices ranging from $4.75 to $30.40 were outstanding but not
    included in the computation because the options' exercise prices were
    greater than the average market price of the common shares and therefore
    the effect would be anti dilutive. For 1998, options to purchase 4,650
    shares of common stock at prices ranging from $19.45 to $33.58 were
    outstanding but not included in the computation because the options'
    exercise price was greater than the average market price of the common
    shares and therefore the effect would be anti-dilutive.

8. Commitments and Contingencies:

 Office Lease

   The Company has entered into agreements to lease office space for its
corporate headquarters and other regional offices. In general, the agreements
provide for monthly payments of rent plus reimbursement for certain other
costs as specified per each agreement and are accounted for as operating
leases for financial reporting purposes. The leases have terms from 5 to 25
years and expire between 2003 and 2007. Annual rental payments of $3,451,
$3,484, and $3,125 for 2000, 1999 and 1998, respectively, are reflected in
general and administrative expense in the accompanying financial statements.
Future five-year minimum lease payments under these lease agreements are as
follows:

<TABLE>
<CAPTION>
                                                                          Rent
     Year                                                                Amount
     ----                                                                -------
     <S>                                                                 <C>
     2001............................................................... $ 1,979
     2002...............................................................   1,979
     2003...............................................................   1,873
     2004...............................................................   1,838
     2005...............................................................   1,838
     2006 and thereafter................................................   3,189
                                                                         -------
                                                                         $12,696
                                                                         =======
</TABLE>

 Hotel and Ground Leases

   The Company leases both land and hotels under agreements with terms ranging
from one to 100 years. The Company has incurred rent expense totaling $78,433,
$117,420, and $110,108 for 2000, 1999 and 1998, respectively. Future five year
minimum lease payments under these lease agreements are as follows:

<TABLE>
<CAPTION>
                                                                         Rent
     Year                                                               Amount
     ----                                                             ----------
     <S>                                                              <C>
     2001............................................................ $   63,222
     2002............................................................     63,446
     2003............................................................     63,700
     2004............................................................     63,121
     2005............................................................     62,913
     2006 and thereafter.............................................    784,927
                                                                      ----------
                                                                      $1,101,329
                                                                      ==========
</TABLE>

                                     F-26
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Employment Agreements

   The Company has entered into employment agreements with each of its
executive officers. Generally, the agreements provide for annual base
compensation with any increases during the terms of the agreements to be
approved by the Compensation Committee of the Board of Directors, as
applicable.

   On February 26, 1999, the Company and Paul A. Nussbaum entered into a
Separation Agreement (the "Separation Agreement") whereby Mr. Nussbaum
resigned his position as Chairman of the Board of Directors and Chief
Executive Officer of Patriot. Pursuant to the Separation Agreement, Mr.
Nussbaum remained as a Director of Wyndham until 2000, and did not seek
reelection after the expiration of his term.

   In accordance with terms of the Separation Agreement, the Company will pay
severance of $3,200 reduced by interest payments made by the Company on a loan
through June 30, 1999. The severance amount was to be paid as follows: $2,000
payable on the earlier of the consummation of the $1 billion equity investment
or January 1, 2000 and the remaining $1,200 is payable in twelve monthly
installments commencing with the first day of the month next following the
date of the $2,000 payment. On June 30, 1999, the Company paid Mr. Nussbaum
$1,750, net of $250 of interest payments made by the Company on the loan. In
addition, on June 30, 1999, the Company made the first monthly installment of
$100.

   Additionally, Mr. Nussbaum's outstanding unvested options to purchase
shares vested and will remain fully exercisable for the period of their
respective terms. Mr. Nussbaum elected to exchange his options on a Black
Scholes neutral basis for new options with an exercise price equal to the fair
market value of a share on the election date. On June 1, 1999, Mr. Nussbaum
exchanged 3,078,406 options at varying prices from $11.18 to $33.58 for
1,154,448 options at $5.1875. Mr. Nussbaum will also receive 250,000 shares
equally over a three-year period, of which 166,667 have vested as of December
31, 2000. Additionally any restrictions were lifted from existing shares held
by Mr. Nussbaum.

   As a condition to receiving the second and third installments of the
shares, Mr. Nussbaum has agreed to provide non-exclusive consulting services
to Wyndham for a period of two years following the resignation date.
Additionally, Mr. Nussbaum will receive other amounts as provided for in the
Separation Agreement.

   On October 16, 2000, the Company announced the resignation of James D.
Carreker from his position as Chairman of the Board of Directors. As a result,
Wyndham will pay Mr. Carreker a severance payment in accordance with current
severance policies, but at a minimum, Mr. Carreker would be entitled to a
severance payment (the "Severance Amount") equal to the greater of (a) $3,000
or (b) three times the sum of his "applicable base salary" (determined in
accordance with the employment agreement) and average incentive compensation
(determined in accordance with the employment agreement). Additionally, for a
period of three years, Wyndham will provide Mr. Carreker with an office and
related facilities and an assistant at a location of his respective choosing.
For a period of one year, Wyndham would pay for Mr. Carreker the cost of
executive placement services. All unvested stock options and stock-based
grants held by Mr. Carreker will immediately vest and become exercisable for
one year or the remaining option term (not to exceed four years).
Additionally, for three years Wyndham will pay health insurance premiums for
Mr. Carreker, his spouse and other dependents and provide certain benefits to
Mr. Carreker, including payment of disability and life insurance premiums. At
December 31, 2000, the Company has accrued $5,176 for amounts due under the
employment contract.

   During 2000, the Company accepted the resignations of three senior
executive officers. As a result, Wyndham will pay severance subject to
conditions set forth in their respective employment agreements. Options
awarded will continue to vest for a period of two years following the date of
resignation and will remain exercisable under the terms of the stock option
agreement. As of December 31, 2000, the Company has accrued $2,294 for amounts
due under their employment contracts.

                                     F-27
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   Additionally, Patriot had assumed notes receivables from four former senior
executive officers. As a part of these senior executive officers' amended
employment contracts and separation agreements, the maturity dates of these
notes were extended from dates ranging from July 31, 2002 through April 2006.
As of December 31, 2000, these promissory notes had an outstanding balance of
$17,139, including accrued interest. The notes bear interest at 6% per annum
and are collateralized by the pledge of shares of the Company held by the note
obligators. These notes receivable and related accrued interest are
receivables from shareholders in the statement of shareholders' equity.

 Earnout Obligations

   In connection with the merger with the hospitality business of CHCI
International Inc. ("CHCI") and the acquisition of Gencom American Hospitality
("GAH"), the Company may be obligated to pay CHCI shareholders and a Gencom
related entity additional purchase consideration in 2002, in each case based
on the performance of certain specified assets.

   Pursuant to the joint venture agreement related to the Wyndham Chicago
Hotel, the agreement provides for an earn-out payment payable based on the net
operating income from the hotel for the year ended December 31, 2001, as
calculated per the agreement.

   As part of the merger with Wyndham Hotel Corporation, Patriot entered into
an Omnibus Purchase and Sale Agreement with various descendants of Mr. and
Mrs. Trammell Crow, and various corporations, partnerships, trusts and other
entities beneficially owned or controlled by such persons (collectively, the
"Crow Family Members"). As part of the agreement, Crow Family members and
certain Wyndham senior executives retained the right to receive additional
consideration on April 30, 2000 based on a formula pertaining to the
performance of Wyndham Riverfront New Orleans and Wyndham Garden La Guardia as
set forth in the Omnibus Purchase and Sale Agreement. In April 2000, the
Company paid $9,556 and $7,156 respectively, as additional consideration.

   In connection with the Summerfield transaction, the purchase price was
subject to future purchase price adjustments. The Company was obligated to pay
in cash or OP units additional purchase consideration if certain performance
criteria were met based on (i) the market price of the paired shares through
the end of 1998, (ii) achievement of certain performance criteria through 2000
for managed hotels which were not open for business (or had recently opened)
as of the date of acquisition, and (iii) fulfillment of the Company's
obligation to develop seven hotels. Payments under these obligations were made
in 1999 and 2000 of $8,969 and $32,825, respectively. In addition, as a result
of the Sierra transaction, the Company will not be liable for any additional
consideration under the purchase agreement.

 Forward Equity Transactions

   The Company was party to transactions with three counterparties involving
the sale of an aggregate of 13.3 million paired shares with related purchase
price adjustment mechanisms. The Company's aggregate obligation under the
forward equity transactions was approximately $335.8 million at June 30, 1999.
Effective June 30, 1999, the Company settled in full all of the forward equity
transactions in cash, with part of the proceeds of the $1 billion equity
investment. The 100.7 million shares owned or held by the counterparties were
retired effective June 30, 1999.

 Contingencies

   On or about February 3, 1999, McNeill Investment Company, Inc. ("MIC")
commenced an action against Patriot in the United States District Court for
the Western District of Pennsylvania alleging a breach by Patriot

                                     F-28
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

of its obligations under a Registration Rights and Shareholders Agreement
dated August 6, 1997, as amended July 15, 1998. Pursuant to a settlement
agreement between Patriot and MIC, dated May 17, 2000: (i) the action was
dismissed with prejudice; (ii) Patriot paid to MIC $3,000 without any
admission of liability or acknowledgement of truth or validity of any claims
asserted in the action; (iii) Patriot and MIC exchanged mutual releases; and
(iv) depending upon the highest rolling 30-day average per share last sales
price for Patriot stock between May 9, 2000 ,and May 8, 2001, MIC may be
required to pay to Patriot up to $750.

   On May 7, 1999, Doris Johnson and Charles Dougherty filed a lawsuit in the
Northern District of California against Patriot, Old Wyndham, their respective
operating partnerships and Paine Webber Group, Inc. This action, Johnson v.
Patriot American Hospitality, Inc., et al., No. C-99-2153, was commenced on
behalf of all former holders of Bay Meadows stock during a class period from
June 2, 1997 to the date of filing. The action asserts securities fraud claims
and alleges that the purported class members were wrongfully induced to tender
their shares as part of the Patriot/Bay Meadows merger based on a fraudulent
prospectus. The action further alleges that defendants continued to defraud
shareholders about their intentions to acquire numerous hotels and saddle
Patriot and Old Wyndham with massive debt during the class period. Three other
actions against the same defendants subsequently were filed in the Northern
District of California: (i) Ansell v. Patriot American Hospitality, Inc., et
al., No. C-99-2239 (filed May 14, 1999), (ii) Sola v. Paine Webber Group,
Inc., et al., No. C- 99-2770 (filed June 11, 1999), and (iii) Gunderson
v.Patriot American Hospitality, Inc., et al., No. C 99-3040 (filed June 23,
1999). Another action with substantially identical allegations, Susnow v.
Patriot American Hospitality, Inc., et al., No. 3-99-CV1354-T (filed June
15,1999), also subsequently was filed in the Northern District of Texas. By
order of the Judicial Panel on Multidistrict Litigation, these actions along
with certain actions identified below have been consolidated in the Northern
District of California for consolidated pretrial purposes. On or about October
13, 2000, the defendants moved to dismiss the actions. The Court heard legal
arguments on motions to dismiss the actions on December 14, 2000 but has not
yet rendered a decision. Wyndham intends to defend the suits vigorously.

   On or about June 22, 1999, a lawsuit captioned Levitch v. Patriot American
Hospitality, Inc., et al., No. 3-99-CV1416-D, was filed in the Northern
District of Texas against Patriot, Old Wyndham, James D. Carreker and Paul A.
Nussbaum. This action asserts securities fraud claims and alleges that, during
the period from January 5, 1998 to December 17, 1998, the defendants defrauded
shareholders by issuing false statements about Patriot and Old Wyndham. The
complaint was filed on behalf of all shareholders who purchased Patriot and
Old Wyndham stock during that period. Three other actions, Gallagher v.
Patriot American Hospitality, Inc., et al., No. 3-99-CV1429-L, filed on June
23, 1999, David Lee Meisenburg, et al. v. Patriot American Hospitality, Inc.,
Wyndham International, Inc., James D. Carreker, and Paul A. Nussbaum Case No.
3-99-CV1686-X, filed July 27, 1999 and Deborah Szekely v. Patriot American
Hospitality, Inc., et al. No. 3-99-CV1866-D, filed on or about August 27,
1999, allege substantially the same allegations. By orders of the Judicial
Panel on Multidistrict Litigation, these actions have been consolidated with
certain other shareholder actions and transferred to the Northern District of
California for consolidated pre-trial purposes. On or about October 20, 2000,
the defendants moved to dismiss the actions. The Court has heard arguments on
motions to dismiss the actions on December 14, 2000 but has not yet rendered a
decision. Wyndham intends to defend the suits vigorously.

   Wyndham has received a draft complaint which threatens to assert claims on
behalf of Golden Door, LLC, Golden Springs, LLC, Golden Door, Inc., Deer
Springs Ranch, LLC, Deborah Szekely and Sarah Livia Brightwood. The potential
plaintiffs appear to be the same as the plaintiffs who filed the action
referenced above, Deborah Szekely v. Patriot American Hospitality, Inc.,
etal., No. 3-99-CV1866-D, however the allegations of the complaints are not
the same. The draft complaint purports to assert claims against Patriot,
Wyndham and their respective operating partnerships for securities fraud under
California securities code, common law fraud, breach of fiduciary duty and
deceit in connection with the purchase by Patriot of the Golden Door Spa in
February 1998.

                                     F-29
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

The draft complaint seeks compensatory damages for the alleged lost value of
the potential plaintiff's stock and other unspecified damages. Although the
Company has received a draft complaint, to date no complaint has been filed.

   Patriot and PAH Stanley Ranch ("PAH") are engaged in a dispute with
Carneros Valley Investors involving a contract which calls for a purchase
price of $14 million with an additional $5 million to be paid if PAH gets
approval for a development in the Napa Valley. PAH did not get approval for
this development. In September 1999, Carneros Valley Investors filed a
complaint in the Superior Court of California, San Francisco, which alleges
that Patriot owes Carneros Valley Investors $5 million and alleges that
Patriot acted negligently, fraudulently and in bad faith in attempting to get
the approval for the development. The complaint has been amended to allege
fraud, purportedly entitling the plaintiff to rescind the sale. Patriot has
answered the complaint, but to date, no discovery had been taken. The dispute
was settled with the assistance of, and in connection with the sale of the
subject property to, a third party. The sale was consummated, the dispute was
settled and mutual releases were exchanged on November 30, 2000, and the
above-referenced lawsuit was formally dismissed prior to December 31, 2000.

   On or about October 26, 2000, a demand for arbitration was filed on behalf
of John W. Cullen, IV, William F. Burruss, Heritage Hotel Management &
Investment Ltd. And GH-Resco, L.L.C. naming Wyndham International, Inc. f/k/a
Patriot American Hospitality, Inc. as respondent. The Demand for Arbitration
claims that the claimants and Wyndham are parties to a Contribution Agreement
dated February 28, 1997 and that Wyndham is in breach of that agreement.
Claimants assert that Wyndham breached its agreement to pay respondents
additional consideration under the Contribution Agreement by, among other
things, allegedly denying claimants compensation due to them in connection
with various transactions initiated by claimants and provided to Wyndham,
which allegedly provided Wyndham with growth and added revenue. In addition,
claimants assert that Wyndham failed to provide claimants with various other
amounts due under the Contribution Agreement, failed to indemnify claimants
for certain expenses and intentionally and negligently mismanaged Wyndham's
business. Claimants do not specify the amount of damages sought. Wyndham has
moved to stay the arbitration. To date, Wyndham has not responded to the
Demand for Arbitration. Wyndham intends to defend the claims vigorously.

9. Related Party Transactions:

 Acquisition and sale of interests from and to officers and affiliates

   Effective January 15, 1999, in connection with the Summerfield transaction
an additional 1,311,709 OP units valued at approximately $8,969 were issued as
additional consideration pursuant to the purchase agreement. Of the OP units
issued, Mr. Rolf E. Ruhfus, a director of the Company received 327,993 of the
OP units issued with an approximate value of $2,243 at the date of issuance.

   Effective March 31, 2000, in connection with the Sierra transaction,
certain assets were sold to an entity affiliated with Mr. Rolf E. Ruhfus, for
net cash proceeds of $23,045 and alleviation of a future obligation due under
the Summerfield transaction of $29,770.

   On June 15, 1999, the Company acquired the controlling 1% interest in
Crowne Plaza Ravinia and Wyndham Windwatch for $156, from former senior
executive officers of the Company.

   In connection with the merger with Gencom Interests Inc., on July 30, 1999,
Mr. Alibhai, a director of the Company, received 400,883 shares of Wyndham
class A common stock. These shares were issued in consideration of Mr.
Alibhai's ownership interests in Gencom Interests Inc. and valued at
approximately $1,813 at the date of merger.

                                     F-30
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   As part of the purchase and sale agreement of two hotels, Crow Family
members and certain Wyndham senior executives retained the right to receive
additional consideration on April 30, 2000 based on a formula pertaining to
the performance of Wyndham Riverfront New Orleans and Wyndham Garden La
Guardia. In April 2000, the Company paid $9,556 and $7,156 respectively, as
additional consideration.

   The Company, in connection with the Wyndham merger, assumed a service
agreement with ISIS 2000, an entity affiliated with members of the Crow family
and senior executive officers of the Company, to provide centralized
reservations and property management services to all Wyndham branded hotels as
well as other hotels owned by the Company. On May 7, 1999, Patriot exercised
its option to purchase ISIS 2000, for a cash payment of $3,073. The service
fees incurred by the Company in 1999, prior to the acquisition, were $1,985.
Fees for the year ended December 31, 1998 totaled $4,368.

 Notes receivable from affiliates, officers and employees

   The Company has provided funding to certain hotels managed by the Company
as working capital and has made advances to certain officers. As of December
31, 2000, notes receivables from these managed hotels totaled $22,694 and
notes receivables from officers, directors, and employees totaled $12,206. As
of December 31, 1999, notes receivable from these managed hotels totaled
$22,530 and notes receivable from officers, directors and employees totaled
$11,753. Amounts are included in notes and other receivables in the
accompanying financial statements. In addition, the Company has certain notes
with former executive officers which have been classified in shareholders'
equity in the amount of $17,139 (See Note 8).

   Certain directors have an ownership interest in several hotels managed by
the Company. As of December 31, 2000, the Company is owed approximately $5,254
for management fees, service fees, and reimbursements from 10 hotels in which
Mr. Alibhai has an ownership interest and approximately $2,538 for management
fees for two hotels in which Mr. Weiser has an ownership interest. As of
December 31, 1999, the Company was owed approximately $5,930 for management
fees, service fees, and reimbursements from 15 hotels in which Mr. Alibhai has
an ownership interest and approximately $1,406 for management fees for two
hotels in which Mr. Weiser has an ownership interest.

 Other

   In 2000, 1999 and 1998, the Company incurred lease expenses in the
aggregate amount of $882, $3,150 and $455, respectively, for lease obligations
to entities owned in whole or in part by Mr. Ruhfus. As a part of the Sierra
transaction, these leases were sold to an entity affiliated with Mr. Ruhfus.

   In 1999 and 1998, the Company paid $88 and $598, respectively, as a
consulting fee to Mr. Ruhfus.

   In addition, the Company has a service contract with the Kinetic Group, an
entity affiliated with a member of the Crow Family, and senior executive
officers of the Company, to provide the Company with management information
services. Fees paid for the year ended December 31, 2000, 1999 and 1998
totaled $3,748, $6,134 and $5,467, respectively.

   During 1998, the Company made payments totaling $3,423 to Wyndham Travel
Management Ltd, an entity owned by Lucy Billingsley (the daughter of Mr.
Trammell Crow), for travel services provided to Wyndham. During 1999, only
$371 was paid to such entity as Wyndham changed its travel agency during 1999.

   The Company made rent payments totaling $1,417 and $1,492 related to an
agreement with an affiliate of Mr. Harlan Crow to lease office space for the
Company's corporate headquarters in Dallas, Texas in 1999 and

                                     F-31
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

1998 respectively. During 1999, the affiliate of Mr. Crow sold its interest in
the building. In addition, the Company made rent payments totaling $153 and
$81 for office space in the Company's Wichita divisional office to an entity
affiliated with Mr. Ruhfus, in 1999 and 1998, respectively.

   The Company has made insurance premium payments to Wynright Insurance
("Wynright"), an entity owned by Crow Family Members and senior executive
officers of the Company, with respect to certain insurance policies maintained
for the benefit of the Company. Such payments totaled $730 in 1998. No such
payments were made in 1999 or 2000.

   In July 2000, the Company amended its management agreement for the Wyndham
Anatole hotel. In consideration for the amendment, the Company paid $67,000 to
the Crow Family members, the owners of the hotel, to include among other
things, the extension of the term for an additional 20 years. In partial
consideration for the amended management agreement, the Company has also
agreed to contribute $4,000 to convert a portion of the Verandah Club to a
Golden Door City Spa and make a new loan in the principal amount of $10,000 to
be applied to the costs of expanding a certain ballroom. The loan shall bear
interest at a rate of 12% per annum and will mature upon the expiration or
termination of the amended management agreement. In addition, the Company has
extended the term of an existing $10,000 loan to the expiration or termination
of the amended management agreement.

10. Minority Interest in the Operating Partnerships:

   Pursuant to the Operating Partnerships' respective limited partnership
agreements, the common limited partners of the Operating Partnerships,
including certain affiliates of Patriot, received rights (the "Redemption
Rights") that enable them to cause the Operating Partnerships to redeem each
pair of OP units (consisting of one OP unit of the Patriot Partnership and the
one OP unit of the Wyndham Partnership) in exchange for cash equal to the
value of a paired share (or, at the Company's election, the Company may
purchase each pair of OP units offered for redemption for one share of common
stock). In the case of the Wyndham Partnership's Class A preferred OP units
and Class C preferred OP units described below, each of these preferred OP
units may be redeemed for cash equal to the value of a share (or, at Wyndham's
election, Wyndham may purchase each preferred OP unit offered for redemption
for one share of common stock). The Redemption Rights generally may be
exercised at any time after one year following the issuance of the OP units.
The number of shares of common stock issuable upon exercise of the Redemption
Rights will be adjusted for share splits, mergers, consolidations or similar
pro rata transactions which would have the effect of diluting the ownership
interests of the limited partners of the Operating Partnerships or the
shareholders of the Company.

   On June 30, 1999, the third party limited partners in both the Patriot
Partnership and the Wyndham Partnership were offered an opportunity to
exchange their limited partnership interests for Wyndham class A common stock.
As a result, an additional 15,097,354 shares of Wyndham class A common stock
were issued in exchange for limited partnership units in the Operating
Partnerships. The effect of the exchange of certain limited partners interest
for Wyndham class A common stock, resulted in an adjustment to the basis of
certain assets in accordance with Emerging Issues Task Force ("EITF") 95-7.
This adjustment is reflected in the accompanying balance sheet as a reduction
in the basis of the Company's investment in real estate and related
improvements of $37,150, investment in unconsolidated subsidiaries of $2,562
and goodwill and intangibles of $78,433.

   As of December 31, 1999, the Patriot Partnership and the Wyndham
Partnership had 1,169,966 OP Units that were held by minority partners, which
represent the minority interest in the operating partnerships.

   During 2000, 30,719 OP units in the Patriot Partnership and Wyndham
Partnership were redeemed for cash of $64. As of December 31, 2000, the
Patriot Partnership and Wyndham Partnership had 1,139,247 OP Units that were
held by minority partners, which represent the minority interest in the
operating partnerships.

                                     F-32
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


11.  Shareholders' Equity:

 Capital Stock

   On June 30, 1999, Wyndham and Patriot completed a $1 billion equity
investment and related restructuring (the "Restructuring") of the two
companies in accordance with the terms of the securities purchase agreement
and related restructuring plan between the Wyndham and Patriot and the
investors.

   As required by the Restructuring Plan, Wyndham and Patriot each effectuated
a one-for-twenty reverse stock split (the "Reverse Stock Splits") of their
respective common stock. In addition, the Amended and Restated Certificate of
Incorporation of Wyndham was also further amended and restated (the "Wyndham
Charter Amendment") so that each share of Wyndham common stock, par value
$0.01 per share, issued and outstanding immediately prior to the effectiveness
of the Wyndham Charter Amendment was automatically converted into one share of
Wyndham class A common stock, par value $0.01 per share.

   Under the terms of the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of March 26, 1999, by and among Patriot, Wyndham and
Wyndham International Acquisition Subsidiary, Inc. ("Acquisition Sub"),
Acquisition Sub was merged with and into Patriot (the "Merger"). As a result
of the Merger, Patriot became a wholly-owned subsidiary of Wyndham. Each
outstanding share of common stock of Acquisition Sub was converted into one
share of the common stock of Patriot, $0.01 par value per share ("Patriot
Common Stock"). Pursuant to the Merger Agreement each share of Patriot Common
Stock was then converted into 19 shares of Wyndham common stock.

   Prior to the Restructuring, the shares of common stock of Wyndham and
shares of common stock of Patriot were "paired" pursuant to a pairing
agreement and traded together as a single unit. The pairing agreement between
the companies was terminated as part of the Restructuring. The end result of
the Reverse Stock Splits, the Wyndham Charter Amendment and the Merger was to
convert each previously outstanding paired share into one share of Wyndham
class A common stock.

   The Company has the authority to issue 750,000,000 shares of class A common
stock, 750,000,000 shares of class B common stock, par value $0.01 per share,
and 150,000,000 shares of preferred stock, par value $0.01.

   Effective June 30, 1999, Wyndham completed a $1 billion equity investment
with a group of investors. Pursuant to the terms of this investment, Wyndham
issued 9.55 million shares of series B preferred stock in exchange for gross
proceeds of $955,000. On July 1, 1999, the remaining $45,000 was funded
through the transfer of one of the investor's loan receivable from PAH Realty
Company, LLC which is secured by a mortgage on the Battery March Hotel, to
Wyndham for the purchase of 450,000 shares of series B preferred stock.
Wyndham incurred approximately $77,571 in costs attributable to the equity
investment. This series B preferred stock has the following terms, among
others:

  .  dividends payable quarterly, on a cumulative basis, at a rate of 9.75%
     per year;

  .  for the first six years, the dividends are structured to ensure an
     aggregate fixed cash dividend payment of $29,250 per year, so long as
     there is no redemption or conversion of the investors' series B
     preferred stock; therefore, for that period, dividends are payable
     partly in cash and partly in additional shares of series B preferred
     stock, with the cash component initially equal to 30% for the first
     dividend and declining over the period to approximately 19.8% for the
     final dividend in year six;

  .  for the next four years, dividends are payable in cash or additional
     shares of series B preferred stock as determined by the Board of
     Directors; and, after year 10, dividends are payable solely in cash;


                                     F-33
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

  .  if any dividends are paid on the Wyndham class A common stock,
     additional dividends will be paid in the amount that would have been
     paid on the shares of Wyndham class A common stock into which the series
     B preferred stock is then convertible;

  .  if a change in control or a liquidation of Wyndham occurs within six
     years following the investment, any dividends remaining for the six
     years will be accelerated and paid;

  .  not redeemable by Wyndham for six years, except that up to $300 million
     of the series B preferred stock may be redeemed during the 170 day
     period following the closing of the investment;

  .  voting with the Wyndham common stock on an as-converted basis on matters
     submitted to the common stockholders and voting as a separate class on
     specified matters, with special rules applying to the election of
     directors; and

  .  convertible, at the holder's option, into a number of shares of Wyndham
     common stock equal to $100.00 divided by the conversion price, initially
     equal to $8.59 but subject to potential downward adjustments.

   The investors will also have preemptive rights for the first five years
following their investment as long as they own more than 15% of the Wyndham
common stock.

   As noted above, for a period of 170 days following the completion of the
investment, Wyndham may redeem up to $300 million of the series B preferred
stock at a redemption price of $102.00 per share (102% of the stated amount)
plus all accrued dividends. In the fall of 1999, Wyndham issued to the holders
of its class A common stock rights and holders of OP units in the Operating
Partnerships to subscribe for up to $300 million of series A preferred stock,
with the proceeds from the offering to be used to redeem a portion of the
series B preferred stock. The rights offering was completed December 13, 1999
with the issuance by Wyndham of 55,992 shares of series A preferred stock in
exchange for gross proceeds of $5,599. Wyndham incurred approximately $1,151
in costs attributable to the issuance of this stock. Wyndham used these
proceeds to redeem 55,992 shares of series B preferred stock at a redemption
price of $102.00 per share and accrued dividends of $2.0583 per share, or an
aggregate of $5,826 in cash. The series A preferred stock generally has the
same economic terms as the series B preferred stock but has no voting rights,
except as required by law and except for a limited right to elect two
directors if dividends are in arrears for six quarterly periods.

 Shareholders Rights Agreement

   Wyndham is party to a Shareholder Rights Agreement dated as of June 29,
1999 (the "Rights Agreement"). Pursuant to the Rights Agreement, the Board of
Directors of Wyndham declared (a) for each outstanding share of common stock
of Wyndham outstanding on July 9, 1999 (the "Record Date"), a dividend
distribution of one preferred stock purchase right (a "Right"), and (b) for
each outstanding share of Wyndham series A or series B preferred stock
outstanding on the Record Date, a dividend distribution of a number of Rights
equal to the number of shares of common stock into which each such share is
convertible. In addition, Rights will automatically attach to each share of
common stock, series A preferred stock and series B preferred issued between
the Record Date and the Distribution Date (as defined in the Rights
Agreement). Each Right entitles the registered holder thereof to purchase from
Wyndham one one-thousandth of a share of series C participating preferred
stock, par value $0.01 per share, at a cash exercise price of $35.00, subject
to adjustment. The Rights may only become exercisable under certain
circumstances involving actual or potential acquisitions of beneficial
ownership of 15% or more of the class A common stock, subject to certain
exceptions. The Rights will expire in June 2009 unless earlier exercised or
redeemed.


                                     F-34
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

 Dividends and Stock Splits

   On December 31, 2000, the Company paid a quarterly dividend, at an annual
rate of 9.75%, on its series A and B preferred stock. The dividend was paid
partly in cash and partly in additional shares of preferred stock. The Company
paid a total of $7,312 in cash and issued approximately 1,046 shares of series
A preferred stock and 191,404 shares of series B preferred stock.

   On September 30, 2000, the Company paid a quarterly dividend, at an annual
rate of 9.75%, on its series A and B preferred stock. The dividend was paid
partly in cash and partly in additional shares of preferred stock. The Company
paid a total of $7,312 in cash and issued approximately 1,020 shares of series
A preferred stock and 186,846 shares of series B preferred stock.

   On June 30, 2000, the Company paid a quarterly dividend, at an annual rate
of 9.75%, on its series A and B preferred stock. The dividend was paid partly
in cash and partly in additional shares of preferred stock. The Company paid a
total of $7,312 in cash and issued approximately 996 shares of series A
preferred stock and 182,400 shares of series B preferred stock.

   On March 31, 2000, the Company paid a quarterly dividend, at an annual rate
of 9.75%, on its series A and B preferred stock. The dividend was paid partly
in cash and partly in additional shares of preferred stock. The Company paid a
total of $7,312 in cash and issued approximately 972 shares of series A
preferred stock and 178,062 shares of series B preferred stock.

   On December 22, 1998, Patriot declared a stock dividend of $0.44 cents per
share of share common stock for the fourth quarter of 1998. The dividend was
paid on January 25, 1999 to stockholders of record on December 30, 1998. Each
stockholder received the option to receive the dividend in the form of
additional paired shares or shares of Series B Cumulative Perpetual Preferred
Stock, par value $.01 per share, of Patriot. Pursuant to the merger of a
wholly-owned subsidiary of Old Wyndham with Patriot on June 30, 1999, each
outstanding share of Patriot series B preferred stock was converted into $25
per share and $1.61 of accrued dividends, or an aggregate of $14,862 in cash.

 Stock Incentive Plans

   The Company has adopted certain employee incentive programs for the purpose
(i) attracting and retaining employees, directors and others, (ii) providing
incentives to those deemed important to the success of the Company and (iii)
associating the interests of these individuals with the interests of the
Company and its shareholders through opportunities for increased stock
ownership. Certain of the stock options and restricted stock grants issued
under the incentive stock programs vested and became non-forfeitable with
consummation of the $1 billion equity investment.

   The 1997 Incentive Plans. Prior to their amendment in 1999, the 1997
Incentive Plans provided for the award of stock options, stock awards or
performance shares to each eligible employee and director of Patriot and Old
Wyndham. Under each 1997 Incentive Plan, the aggregate number of paired shares
available for grants of awards was the sum of (i) 3,000,000 paired shares plus
(ii) 10% of any future net increase in the total number of shares of paired
common stock.

   Under the 1997 Incentive Plans, each independent director could elect to
take all or a portion of his/her fees in the form of deferred paired share
units. Prior to the amendment in 1999, the independent directors of Patriot
and Old Wyndham were automatically granted a non-qualified stock option,
immediately exercisable in full, to acquire 10,000 paired shares at an
exercise price per paired share equal to the fair market value of a paired
share on the date of grant. Option terms were fixed by the Compensation
Committees of Patriot and Old Wyndham and may not exceed ten years from the
date of grant.

                                     F-35
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   On June 29, 1999, the 1997 Incentive Plans were amended, as a result of
Patriot's merger into Wyndham. As part of the merger, Wyndham assumed
Patriot's obligations under each existing option to purchase shares of Patriot
common stock that was outstanding immediately prior to the merger. The assumed
options did not terminate in connection with the merger and continue to have,
and be subject to, the same terms and conditions set forth in the stock option
plans and agreements in effect immediately prior to the merger. All references
to Patriot in the assumed options are now deemed to be references to Wyndham
and each option is exercisable for one share of Wyndham class A common stock.

   On May 26, 2000, the stockholders approved an amendment to the 1997
Incentive Plan, as amended and restated as of June 29, 1999 (the "Plan"). The
amendment increases the number of shares available for grant under the Plan to
an amount equal to 7.5% of the shares of class A common stock on a fully
diluted basis. Under the Plan, "fully diluted basis" means the assumed
conversion of all outstanding shares of series A and B convertible preferred
stock, the assumed exercise of all outstanding stock options and the assumed
conversion of all units of partnership interest in the Patriot Partnership and
the Wyndham Partnership that are subject to redemption.

 Stock Grant Awards

   During 1997, pursuant to the Incentive Plans, the Board of Directors
awarded 547,867 paired shares of common stock to certain officers of Patriot
and Old Wyndham. In 1999, 121,053 shares were awarded to an officer of the
Company. The Company recorded a total of $611 and $12,897 (the aggregate value
of the common stock based on the market price at the date of the award) as
unearned stock compensation in 1999 and 1997, respectively, which is being
amortized over the vesting periods of one to five years. For 2000, 1999 and
1998, amortization of stock compensation related to stock grants of $255,
$5,850, and $7,622 respectively, is included in general and administrative
expense in the accompanying consolidated financial statements.

   During 2000, 1999 and 1998, pursuant to the 1997 Incentive Plans, the Board
of Directors awarded 200,000, 1,036,332 and 331,755 restricted awards,
respectively, to certain officers of the Company. The Company has recorded
$1,158, $10,004 and $1,613 in 2000, 1999 and 1998, respectively, related to
the restricted awards and such amount is included in general and
administrative expense in the accompanying consolidated financial statements.

   Upon the consummation of the $1 billion equity investment, certain of the
stock grants and restricted awards issued under the incentive stock programs
fully vested. The deferred compensation expense of $6,987 was fully recognized
in general and administrative expense in 1999, as a result of the accelerated
vesting of these certain awards.

 Stock Option Awards

   As of December 31, 2000, pursuant to the incentive plans, the Company has
authorized the grant of options for up to 20,115,631 shares with exercise
prices of $1.625 to $30.40 per share. As of December 31, 2000, 7,260,242 were
exercisable; no options were exercised during 2000. As of December 31, 1999,
2,928,904 options were exercisable; no options were exercised during 1999.
During 1998, a total of 1,299,250 shares were issued pursuant to exercise of
options (at exercises prices ranging from $11.18 to 17.82) resulting in net
proceeds of $15,274.

   SFAS No. 123 "Accounting for Stock-Based Compensation"

   Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, which also requires that the information be
determined as if the Company had accounted for its compensatory employee

                                     F-36
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

stock options under the fair value method of that Statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weight-average assumptions for 2000,
1999, and 1998, respectively: risk-free interest rates of 6.20%, 5.78%, and
5.31%; dividend yields of 0%, 0%, and 6%,; volatility factors of the expected
market price of the Company's common stock of 0.577, 0.596, and 0.735 and a
weighted average expected life of the options of 4 years.

   The Black-Scholes option valuation model was developed for use in
estimating the fair market value of traded options which have no vesting
restrictions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions including the expected
stock price volatility. Because the Company's employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
employee stock options that have vesting periods and are non-transferable.

   For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The
Company's pro forma information is as follows:

<TABLE>
<CAPTION>
                                               2000        1999        1998
                                             ---------  -----------  ---------
   <S>                                       <C>        <C>          <C>
   Basic
   Pro forma net loss attributable to
    common shareholders....................  $(434,641) $(1,146,361) $(185,566)
   Pro forma earnings per share:...........  $   (2.60) $     (7.11) $   (1.35)
   Diluted
   Pro forma net (loss) income available to
    common shareholders....................  $(434,641) $(1,166,311) $(352,807)
   Pro forma earnings per share:...........  $   (2.60) $     (7.23) $   (2.56)
</TABLE>

                                     F-37
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   A summary of the Company's stock option activity, and related information
for the years ended December 31 is as follows:

<TABLE>
<CAPTION>
                               2000              1999              1998
                         ----------------- ----------------- -----------------
                                  Weighted          Weighted          Weighted
                                  Average           Average           Average
                         Options  Exercise Options  Exercise Options  Exercise
                         (000's)   Price   (000's)   Price   (000's)   Price
                         -------  -------- -------  -------- -------  --------
<S>                      <C>      <C>      <C>      <C>      <C>      <C>
Outstanding, beginning
 of year................ $14,410   $6.57    7,717    $19.28   6,241    $20.82
Granted.................   8,491    1.98   11,450      4.69   3,997     17.50
Exercised...............     --      --       --        --     (578)    11.38
Forfeited...............  (2,785)   4.37   (4,757)    22.04  (1,943)    23.48
                         -------   -----   ------    ------  ------    ------
Outstanding, end of
 year...................  20,116    4.92   14,410      6.57   7,717     19.28
                         =======           ======            ======
Exercisable at end of
 year...................   7,260    8.23    3,996    $10.77   3,746    $10.75
Weighted average fair
 value of options
 granted during year....           $ --              $ 0.95            $ 7.70
</TABLE>

   Exercise prices for options outstanding as of December 31, 2000 ranged from
$1.625 to $30.40. The weighted average remaining contractual life of those
options was 7.4 years. Exercise prices for options outstanding as of December
31, 1999 ranged from $2.6875 to $30.40. The weighted average remaining
contractual life of those options was 8.5 years. Exercise prices for options
outstanding as of December 31, 1998 ranged from $7.55 to $33.58. The weighted
average remaining contractual life of those options was eight years.

12. Income Taxes:

   The income tax provision of Wyndham for the year ended December 31, 2000,
1999 and 1998, respectively, consists of the following:

<TABLE>
<CAPTION>
                                                    2000       1999      1998
                                                  ---------  --------  --------
   <S>                                            <C>        <C>       <C>
   Current:
     Federal..................................... $   3,405  $ 15,500  $ 25,272
     State.......................................    13,383     3,475     4,948
                                                  ---------  --------  --------
   Total current.................................    16,788    18,975    30,220
                                                  ---------  --------  --------
   Deferred:
     Federal.....................................  (197,579)  546,983   (11,982)
     State.......................................   (25,121)   (1,447)   (1,535)
                                                  ---------  --------  --------
   Total deferred................................  (222,700)  545,536   (13,517)
                                                  ---------  --------  --------
       Total income tax (benefit) provision...... $(205,912)  564,511  $ 16,703
                                                  =========  ========  ========
</TABLE>


                                     F-38
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


   The reason for the difference between total tax expense and the amount
computed by applying the statutory Federal income tax rate of 35% to income
before income taxes is as follows:

<TABLE>
<CAPTION>
                                                  2000       1999       1998
                                                ---------  ---------  --------
   <S>                                          <C>        <C>        <C>
   Tax at statutory rate....................... $(183,054) $(171,967) $(50,661)
   State income taxes..........................   (11,738)     2,028     3,413
   Valuation allowance.........................    (8,109)     7,625    17,866
   Assets held for sale........................       --         --      7,573
   Goodwill....................................     3,700     34,387     5,330
   Lease buyout costs..........................       --         --     20,033
   REIT income not taxed.......................       --         --     22,835
   One time charge C-Corp conversion...........       --     675,000       --
   Minority interest and other.................    (6,711)    17,438    (9,686)
                                                ---------  ---------  --------
       Total income tax expense................ $(205,912) $ 564,511  $ 16,703
                                                =========  =========  ========
</TABLE>

   Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. On January 1, 1999,
Patriot, previously a REIT (non-taxable entity), converted to a C corporation
and is now a subsidiary of Wyndham. Upon the conversion of the REIT to a C
corporation, Wyndham recognized a deferred tax liability of $675,000 that was
recognized in continuing operations as a tax provision. Significant components
of Wyndham's deferred tax assets and liabilities for the year ended December
31, 2000 and 1999, respectively are as follows:

<TABLE>
<CAPTION>
                                                            2000       1999
                                                          ---------  ---------
   <S>                                                    <C>        <C>
   Deferred tax assets:
     Net operating losses................................ $  84,530  $  67,292
     Disposition of assets...............................     2,687      1,641
     Other non-current assets............................    21,879     31,224
                                                          ---------  ---------
       Total deferred tax assets.........................   109,096    100,157
     Valuation allowance.................................   (17,382)   (25,491)
                                                          ---------  ---------
         Net deferred asset..............................    91,714     74,666
                                                          =========  =========
   Deferred tax liabilities:
     Depreciation........................................  (467,690)  (662,482)
     Management contracts and trade names................   (48,578)   (65,277)
     Other non-current liabilities.......................    (5,476)    (3,071)
                                                          ---------  ---------
       Total deferred tax liabilities....................  (521,744)  (730,830)
                                                          ---------  ---------
         Net deferred income tax liability............... $(430,030) $(656,164)
                                                          =========  =========
</TABLE>

   As of December 31, 2000, Wyndham and certain affiliated subsidiaries have
net operating loss carry forwards for federal income tax purposes of
approximately $237,646 which are available to offset future taxable income, if
any, through 2020.

13. Employee Benefit Plans:

   The Company sponsors 401(k) retirement savings plans. Employees who are
over 21 years of age and have completed one year of service are eligible to
participate in the plans. The Company matches 50% of employee

                                     F-39
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

contributions up to 4% of an employee's salary. The aggregate expense under
the plans totaled $733, $506 and $511 for 2000, 1999 and 1998 respectively.

   The Company maintains a self-insured group health plan through a Voluntary
Employee Benefit Association referred to hereinafter as VEBA. The plan is
funded to the limits provided by the Internal Revenue Service, and liabilities
have been recorded for estimated incurred but unreported claims. Aggregate and
stop loss insurance exists at amounts that limit exposure to the Company. The
Company has recognized expense related to the plan of $3,206, $2,415 and
$2,313 for 2000, 1999 and 1998, respectively.

14. Fair Value of Financial Instruments:

   Statement of Financial Accounting Standards No. 107 requires disclosures
about the fair value for all financial instruments, whether or not recognized,
for financial statement purposes. Disclosures about fair value of financial
instruments are based on pertinent information available to management as of
December 31, 2000. Considerable judgment is necessary to interpret market data
and develop estimated fair value. Accordingly, the estimates presented herein
are not necessarily indicative of the amounts that could be realized on
disposition of the financial instruments. The use of different market
assumptions and/or estimation methodologies may have a material effect on the
estimated fair value amounts.

   Management estimates the fair value of (i) accounts receivable, accounts
payable and accrued expenses approximate carrying value due to the relatively
short maturity of these instruments; (ii) the notes receivable approximate
carrying value based upon effective borrowing rates for issuance of debt with
similar terms and remaining maturities; and (iii) the borrowings under the
Revolving Credit Facility, Term Loan and various other mortgage notes
approximate carrying value because these borrowings accrue interest at
floating interest rates based on market The Company estimates the fair value
of its fixed rate debt generally using discounted cash flow analysis based on
the Company's current borrowing rates for debt with similar maturities. The
estimated fair value of the fixed rate debt at December 31, 2000 was
approximately $405,845.

   The Company manages its debt portfolio by using interest rate caps and
swaps to achieve an overall desired position of fixed and floating rates. The
fair value of interest rate hedge contracts is estimated based on quotes from
the market makers of these instruments and represents the estimated amounts
the Company would expect to receive or pay to terminate the contracts. Credit
and market risk exposures are limited to the net interest differentials. The
estimated unrealized loss on the interest rate swaps was approximately $24,477
at December 31, 2000, and the fair value of the interest rate caps
approximated $10,232.

15. Segment Reporting:

   The Company classifies its business into proprietary owned brands and non-
proprietary brand hotel divisions, under which it manages the business.

   Wyndham is the brand umbrella under which all of its proprietary products
are marketed. It includes three four-star, upscale hotel brands that offer
full-service accommodations to business and leisure travelers, as well as the
five-star luxury resort brand.

 Description of reportable segments

   The Company has seven reportable segments: Wyndham Hotel & Resorts(R),
Wyndham Luxury Resorts, Summerfield Suites by Wyndham(TM), Wyndham Gardens(R),
other proprietary branded hotel properties, non-

                                     F-40
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

proprietary branded hotel properties and other. Prior years' reportable
segments have been restated to conform to current year presentation.

  .  Wyndham Hotels & Resorts(R) are upscale, full-service hotel properties
     that contain an average of 400 hotel rooms, generally between 15,000 and
     250,000 square feet of meeting space and a full range of guest services
     and amenities for business and leisure travelers, as well as conferences
     and conventions. The hotels are located primarily in the central
     business districts and dominant suburbs of major metropolitan markets
     and are targeted to business groups, meetings, and individual business
     and leisure travelers. These hotels offer elegantly appointed facilities
     and high levels of guest service.

  .  Wyndham Luxury Resorts are five-star hotel properties that are
     distinguished by their focus on incorporating the local environment into
     every aspect of the property, from decor to cuisine to recreation. The
     luxury collection includes the Golden Door Spa, one of the world's
     preeminent spas.

  .  Wyndham Gardens(R) are full-service properties, which serve individual
     business travelers and are located principally near major airports and
     suburban business districts. Amenities and services generally include a
     three-meal restaurant, signature Wyndham Garden(R) libraries and laundry
     and room service.

  .  Summerfield Suites by Wyndham(TM) offers guests the highest quality
     lodging in the upscale all suites segment. Each suite has a fully
     equipped kitchen, a spacious living room and a private bedroom. Many
     suites feature two bedroom, two bath units. The hotels also have a
     swimming pool, exercise room and other amenities to serve business and
     leisure travelers.

  .  Other proprietary branded hotel properties include Malmaison, Sierra
     Suites, Clubhouse and hotels acquired in the Arcadian acquisition. As of
     December 31, 2000, the Company has sold its interests in Sierra Suites,
     Clubhouse, and the hotels acquired in the Arcadian acquisition and the
     Malmaison properties.

  .  Non-proprietary branded properties include all properties which are not
     Wyndham branded hotel properties or other proprietary branded
     properties. The properties consist of non-Wyndham branded assets, such
     as Crowne Plaza(R), Embassy Suites(R), Marriott(R), Courtyard by
     Marriott(R), Sheraton(R) and independents.

  .  Other includes management fee and service fee income, participating
     lease revenues, racecourse facility revenue and expenses, interest and
     other income, general and administrative costs, interest expense,
     depreciation and amortization and other charges. General and
     administrative costs, interest expense and depreciation and amortization
     are not allocated to each reportable segment; therefore, they are
     reported in the aggregate within this segment.

 Factors management used to identify the reportable segments

   The Company's reportable segments are determined by brand affiliation and
type of property. The reportable segments are each managed separately due to
the specified characteristics of each segment.

                                     F-41
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)


 Measurement of segment profit or loss

   The Company evaluates performance based on the operating income or loss
from each business segment. The accounting policies of the reportable segments
are the same as those described in the summary of significant accounting
policies.

<TABLE>
<CAPTION>
                            Wyndham   Wyndham           Summerfield    Other        Non
 Year ended December 31,    Hotel &    Luxury  Wyndham   Suites by  proprietary proprietary
          2000              Resorts   Resorts  Gardens    Wyndham     branded     branded    Other(1)      Total
-------------------------  ---------- -------- -------- ----------- ----------- ----------- -----------  ----------
<S>                        <C>        <C>      <C>      <C>         <C>         <C>         <C>          <C>
Total revenue............  $1,128,073 $103,654 $ 84,730  $142,442     $41,197   $  921,507  $    76,992  $2,498,595
Operating income (loss)..     293,380   26,907   15,689    29,519      11,955      248,036   (1,150,991)   (525,505)
Segment assets...........   2,644,924  247,766  138,017   252,844      14,371    1,855,913      913,064   6,066,899
Capital additions........      77,885    4,247   34,032     4,117       1,719       36,203       27,670     185,873
</TABLE>
--------
(1) Operating income (loss) for 2000 includes $486,658 of impairment charges
    related to certain assets.

<TABLE>
<CAPTION>
                            Wyndham   Wyndham           Summerfield    Other        Non
       Year ended           Hotel &    Luxury  Wyndham   Suites by  proprietary proprietary
    December 31, 1999       Resorts   Resorts  Gardens    Wyndham     branded     branded    Other(1)      Total
-------------------------  ---------- -------- -------- ----------- ----------- ----------- -----------  ----------
<S>                        <C>        <C>      <C>      <C>         <C>         <C>         <C>          <C>
Total revenue............  $  992,353 $ 97,422 $ 92,776  $132,772    $101,796   $  991,927  $    86,289  $2,495,335
Operating income (loss)..     244,435   22,050   23,044    26,785      27,680      240,028   (1,067,611)   (483,589)
Segment assets...........   2,608,066  249,193  243,815   260,131     193,216    2,301,811    1,147,258   7,003,490
Capital additions........      72,675    8,782   10,764    20,270      18,779       56,550       46,896     234,716
</TABLE>
--------
(2) Operating income (loss) for 1999 includes $285,267 of restructuring
    charges and $70,912 of impairment loss on assets held for sale.

<TABLE>
<CAPTION>
                            Wyndham   Wyndham           Summerfield    Other        Non
       Year ended           Hotel &    Luxury  Wyndham   Suites by  proprietary proprietary
    December 31, 1998       Resorts   Resorts  Gardens    Wyndham     branded     branded    Other(1)     Total
-------------------------  ---------- -------- -------- ----------- ----------- ----------- ----------  ----------
<S>                        <C>        <C>      <C>      <C>         <C>         <C>         <C>         <C>
Total revenue............  $  663,824 $ 84,372 $178,000  $ 71,413    $ 83,919   $  761,154  $  213,659  $2,056,341
Operating income (loss)..     162,560   18,581   48,931    14,586      26,596      183,703    (576,963)   (122,006)
Segment assets...........   1,791,261  249,677  320,530   242,590     300,597    2,906,527   1,604,488   7,415,670
Capital additions........     901,392   19,411  259,110   201,304     299,757    1,930,121      16,264   3,627,359
</TABLE>
--------
(3) Operating income (loss) for 1998 includes unusual items related to the
    treasury rate lock settlement of $49,334 and the cost of reacquiring
    leaseholds of $64,407.

   The following table represents revenue and long-lived asset information by
geographic area for the years ended December 31, 2000, 1999 and 1998. Revenues
are attributed to the United States and its territories and Europe based on
the location of hotel properties. The hotel properties in Europe were acquired
on April 6, 1998 with the Arcadian acquisition. Prior to this date, all of the
Company's business was attributed to hotel properties located in the United
States and its territories.

<TABLE>
<CAPTION>
     2000                                      United States  Europe    Total
     ----                                      ------------- -------- ----------
     <S>                                       <C>           <C>      <C>
     Revenues.................................  $2,468,253   $ 30,342 $2,498,595
     Segment assets...........................   5,996,427     70,472  6,066,899

<CAPTION>
     1999                                      United States  Europe    Total
     ----                                      ------------- -------- ----------
     <S>                                       <C>           <C>      <C>
     Revenues.................................  $2,419,228   $ 76,107 $2,495,335
     Segment assets...........................   6,778,228    225,262  7,003,490

<CAPTION>
     1998                                      United States  Europe    Total
     ----                                      ------------- -------- ----------
     <S>                                       <C>           <C>      <C>
     Revenues.................................  $2,034,949   $ 21,392 $2,056,341
     Segment assets...........................   7,157,617    258,053  7,415,670
</TABLE>


                                     F-42
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

16.  Supplemental Cash Flow Disclosure:

   In connection with the Cal Jockey Merger, the acquisition of management
companies, hotel properties and other operations assets, the Company issued
common stock, preferred stock, options and OP units in exchange for net assets
of $1,698,542.

   In connection with the reorganization of the Company, the distribution of
approximately 92% of the shares of Interstate Hotel Corporation in the form of
a dividend to shareholders, the issuance of preferred stock dividends, and
acquisition of hotel properties and other assets, the Company had net non-cash
financing and investing activities of $99,338.

   During 2000, the Company acquired the remaining interest in a partnership
for $20,626 in cash. As a result, the Company now consolidates this entity in
the financial statements and recorded increases in mortgage debt of $38,910
and assumed a capital lease obligation of $15,125 related to the rental of
building space of the property. Additionally during 2000, the Company incurred
capital lease obligations related to equipment of $9,659.

   During 2000, the Company issued a stock dividend of 742,746 shares of
series A and series B preferred stock with a value of $74,275.

   Effective March 31, 2000, in connection with the Sierra transaction, the
Company sold one owned and three leased properties, 17 franchise and
management contracts for Sierra Suites and nine management contracts for
Summerfield Suites for net cash proceeds of $23,045 and relieved $29,770 of
future obligations.

   On July 12, 2000, the Company sold an investment included in unconsolidated
subsidiaries with a net book value of $7,225 for $4,319, which was paid in the
form of a note receivable that is due March 31, 2001.

17. Quarterly Financial Information (unaudited):

<TABLE>
<CAPTION>
                                              Three Months Ended
                                  ---------------------------------------------
                                  March 31   June 30   September 30 December 31
                                  --------  ---------  ------------ -----------
<S>                               <C>       <C>        <C>          <C>
2000
  Total revenue.................. $653,626  $ 662,995   $ 574,466    $ 607,508
  Income (loss) before
   extraordinary item (1), (2),
   (3)........................... $ 11,597  $ (46,517)  $(119,339)   $(170,412)
  Net income (loss).............. $ 11,597  $ (46,517)  $(119,339)   $(170,412)
  Net loss per share:
    Basic........................ $  (0.08) $   (0.43)  $   (0.87)   $   (1.18)
    Diluted...................... $  (0.08) $   (0.43)  $   (0.87)   $   (1.18)
1999
  Total revenue (4).............. $671,075  $ 651,153   $ 579,281    $ 593,826
  Income (loss) before
   extraordinary item (5), (6)... $    572  $(867,392)  $ (44,565)   $(150,746)
  Net income (loss).............. $    572  $(877,230)  $ (44,565)   $(150,746)
  Net loss per share:
    Basic........................ $  (0.05) $   (5.71)  $   (0.41)   $   (1.05)
    Diluted...................... $  (0.13) $   (5.76)  $   (0.41)   $   (1.05)
</TABLE>
--------
(1) Loss before extraordinary item for the second quarter of 2000 includes an
    impairment loss on assets held for sale of $77,300.
(2) Loss before extraordinary item for the third quarter includes an
    impairment loss on assets held for sale of $134,016.
(3) Loss before extraordinary item for the fourth quarter includes an
    impairment loss of $ 275,342.

                                     F-43
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (dollars in thousands, except share amounts)

(4) The first quarter of 1999 as reported reflected $2,775 of gains on the
    sale of assets, which were reclassified from revenue, and netted against
    expense for financial statement presentation during the second quarter of
    1999.
(5) (Loss) income before extraordinary item for the second quarter of 1999
    includes a restructuring charge of $185,382 and income tax provision
    includes a reorganization charge of $675,000.
(6) (Loss) income before extraordinary item for the fourth quarter of 1999
    includes the following:
    A restructuring charge of $95,979.
    Impairment in value of assets held for sale of $70,912.

                                     F-44
<PAGE>

                     REPORT OF INDEPENDENT ACCOUNTANTS ON
                         FINANCIAL STATEMENT SCHEDULES

Board of Directors and Shareholders
Wyndham International, Inc.

   Our audits of the consolidated financial statements referred in our report
dated February 5, 2001 appearing in this Annual Report on Form 10-K also
included an audit of the financial statement schedule listed in Item 14(a)(2)
of this Form 10-K. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP
Dallas, Texas
February 5, 2001

                                     F-45
<PAGE>

                          WYNDHAM INTERNATIONAL, INC.

             SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION

                            As of December 31, 2000

<TABLE>
<CAPTION>
                                                      Costs Capitalized
                                                          Subsequent        Gross Amounts at Which Carried
                                   Initial Cost         to Acquisition          at Close of Period (a)
                               --------------------- --------------------- --------------------------------
                                        Buildings and                              Buildings and
  Description     Encumbrances   Land   Improvements  Land    Improvements   Land   Improvements   Total
  -----------     ------------ -------- ------------ -------  ------------ -------- ------------ ----------
<S>               <C>          <C>      <C>          <C>      <C>          <C>      <C>          <C>
El Conquistador
Fajardo, Puerto
Rico               $  115,113  $ 20,256  $  190,607  $   --     $ 10,807   $ 20,256  $  201,414  $  221,670

All other assets
held for use,
each less than
5% of the total       710,318   288,487   2,621,930    9,446     164,565    297,933   2,786,495   3,084,428

Assets Held for
Sale, each less
than 5% of the
total                 505,836   115,329   1,381,944     (728)     65,573    114,601   1,447,517   1,562,118
                   ----------  --------  ----------  -------    --------   --------  ----------  ----------
                   $1,331,267  $424,072  $4,194,481   $8,718    $240,945   $432,790  $4,435,426  $4,868,216
                   ==========  ========  ==========  =======    ========   ========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                         Accumulated            Year          Date of
  Description          Depreciation (c)         Built       Acquisition
  -----------          ----------------      ----------    -------------
<S>                    <C>                   <C>           <C>
El Conquistador
Fajardo, Puerto
Rico                      $  (17,393)             1993            1998

All other assets
held for use,
each less than
5% of the total             (242,318)       1800s-1999       1995-2000

Assets Held for
Sale, each less
than 5% of the
total                       (117,634)        1906-1998       1995-1998
                           ---------
                           $(377,945)
                           =========



</TABLE>

                                     F-46
<PAGE>

                           WYNDHAM INTERNATIONAL INC.

                             NOTES TO SCHEDULE III
                                 (in thousands)

<TABLE>
<CAPTION>
                                         Year Ended   Year Ended   Year Ended
                                        December 31, December 31, December 31,
                                            2000         1999         1998
                                        ------------ ------------ ------------
<S>                                     <C>          <C>          <C>
(a)Reconciliation of Real Estate
  Balance at beginning of period.......  $5,106,723   4,995,837    1,863,568
  Additions during period:
    Acquisitions.......................      38,715     267,975    2,967,790
    Improvements.......................      40,473     166,574      164,479
  Deductions during period
    Sale of properties.................    (317,695)   (269,493)         --
    Basis Adjustments..................         --      (54,170)         --
                                         ----------   ---------    ---------
    Balance at end of period...........  $4,868,216   5,106,723    4,995,837
                                         ==========   =========    =========
(b)Reconciliation of Accumulated
 Depreciation:
    Balance at beginning of period.....  $  273,272     132,809       41,041
  Additions during period
    Depreciation for the period........     122,949     151,184       91,768
  Deductions during period
    Sale of properties.................     (18,276)    (10,721)         --
                                         ----------   ---------    ---------
  Balance at the end of period.........  $  377,945     273,272      132,809
                                         ==========   =========    =========
</TABLE>

(c) Depreciation is computed on buildings and improvements based upon a useful
    life of 35 to 40 years for assets held for use

(d) The company has established a reserve for impairment of $381,609

(e) The company has established a reserve for impairment of $91,584

                                      F-47