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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



(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, 2003

OR

| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 19320



Wyndham
International, Inc.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 94-2878485                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|1950 Stemmons Freeway, Suite 6001 Dallas, Texas                |  | 75207                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(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 $0.01 per share |  | American Stock Exchange                    
|                                                | 
|Preferred Stock Purchase Rights                 |  | American 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

(Title of each class)



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 to this Form
10K. ̈

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  x No ̈

The aggregate market value of the voting stock held by non-affiliates on June 30, 2003 was $67,404,877,
based upon a price of $.44 per share.

As of March 1, 2004, there were 168,252,931 shares of the registrants class A common stock
issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants definitive Proxy Statement to be furnished to stockholders in connection with its 2004 Annual Meeting of Stockholders
are incorporated by reference in Part III of this Form 10-K.

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WYNDHAM INTERNATIONAL, INC.



Form 10-K
Annual Report

Index



|           |  |                                                                                                 |  |   
|---------- |  | ----------------------------------------------------------------------------------------------- |  | --
|Item No.   |  | Page                                                                                           
|           | 
|PART I     |  |                                                                                                
|           |  |                                                                                                
|1.         |  | Business                                                                                        |  | 1 
|2.         |  | Properties                                                                                      |  | 1 
|           |  | Executive Officers of the Registrant                                                            |  | 17
|3.         |  | Legal Proceedings                                                                               |  | 18
|4.         |  | Submission of Matters to a Vote of Security Holders                                             |  | 20
|           | 
|PART II    |  |                                                                                                
|           |  |                                                                                                
|5.         |  | Market for Registrants Common Equity and Related Stockholder Matters                           |  | 21
|6.         |  | Selected Financial Information                                                                  |  | 22
|7.         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations           |  | 24
|7A.        |  | Quantitative and Qualitative Disclosures about Market Risk                                      |  | 41
|8.         |  | Financial Statements and Supplementary Data                                                     |  | 43
|9.         |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure            |  | 43
|9A.        |  | Controls and Procedures                                                                         |  | 43
|           | 
|PART III   |  |                                                                                                
|           |  |                                                                                                
|10.        |  | Directors and Executive Officers of theRegistrant                                               |  | 44
|11.        |  | Executive Compensation                                                                          |  | 44
|12.        |  | Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters |  | 44
|13.        |  | Certain Relationships and Related Transactions                                                  |  | 45
|14.        |  | Principal Accountant Fees and Services                                                          |  | 45
|           | 
|PART IV    |  |                                                                                                
|           |  |                                                                                                
|15.        |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                |  | 45
|           | 
|SIGNATURES |  | 52                                                                                             



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PART I



ITEMS 1 AND 2. BUSINESS AND PROPERTIES



Overview



In this Annual Report on Form 10-K,
Wyndham International, Inc. together with its subsidiaries will be referred to as we, us, Wyndham or the Company. We are a fully-integrated and multi-branded hotel enterprise operating primarily in the
upper upscale and luxury segments of the hotel and resorts industry. We are one of the largest United States based hotel owners/operators with a portfolio consisting of 190 hotels with over 50,900 guest rooms as of December 31, 2003. We are a
Delaware corporation and our principal executive office is located at 1950 Stemmons Freeway, Suite 6001, Dallas, Texas 75207.



Certain statements in this annual report constitute forward-looking statements as that term is defined under §21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Statements that are predictive in nature,
that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates, thinks, and
similar expressions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or
performance expressed or implied by these forward-looking statements. These factors include, among other things, those matters discussed under the caption Risk Factors, as well as the following:



| |  | the impact of general economic conditions in the United States;
| | - | ---------------------------------------------------------------



| |  | industry conditions, including competition;
| | - | -------------------------------------------



| |  | business strategies and intended results;
| | - | -----------------------------------------



| |  | our ability to effect sales of our assets on terms and conditions favorable to us;
| | - | ----------------------------------------------------------------------------------



| |  | our ability to integrate acquisitions into our operations and management;
| | - | -------------------------------------------------------------------------



| |  | risks associated with the hotel industry and real estate markets in general;
| | - | ----------------------------------------------------------------------------



| |  | the impact of terrorist activity or war, threats of terrorist activity or war and responses to terrorist activity on the economy in general and the travel and hotel industries in
particular;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | travelers fears of exposure to contagious diseases;
| | - | ----------------------------------------------------



| |  | capital expenditure requirements;
| | - | ---------------------------------



| |  | legislative or regulatory requirements; and
| | - | -------------------------------------------



| |  | access to capital markets.
| | - | --------------------------



Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Given these
uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this annual report. We assume no obligation to update or revise them or
provide reasons why actual results may differ.



Available Information



We file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission (SEC). Our SEC filings are also available to the public at the Securities and Exchange Commissions web site at http://www.sec.gov. No information from
this web page is incorporated by reference herein. Our web site is http://www.wyndham.com. We make available free of charge on our website copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to these reports as soon as reasonably practicable after we have filed or furnished them to the SEC.



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Our History



Through a series of mergers and acquisitions, we have grown substantially since our inception in 1995. Patriot American Hospitality, Inc., or Patriot, was
formed on April 17, 1995 as a self-administered real estate investment trust, or REIT, to acquire equity interests in hotel properties. On October 2, 1995, Patriot completed an initial public offering of its common stock and commenced its
operations.



On July 1, 1997, Patriot merged into California
Jockey Club, or Cal Jockey. As part of this merger, Cal Jockey and Bay Meadows Operating Company, or Bay Meadows, entered into a paired share arrangement under which both of their common stocks were paired and traded together. Also, Cal Jockey
changed its name to Patriot, and Bay Meadows changed its name to Patriot American Hospitality Operating Company.



In January 1998, Wyndham Hotel Corporation merged into Patriot and, as part of that merger, Patriot American Hospitality Operating Company changed its
name to Wyndham International, Inc. We will refer to Wyndham International, Inc. as it existed before June 30, 1999 as old Wyndham.



During 1998, Patriot and old Wyndham grew primarily by acquiring hotels and other related businesses. They financed these acquisitions with funds drawn on
their revolving credit facilities and capital raised by issuing paired shares and by having their two operating partnerships issue limited partnership interests.



On June 30, 1999, we restructured our organization. As part of this restructuring:



| |  | Patriot became a wholly-owned subsidiary of ours;
| | - | -------------------------------------------------



| |  | we and Patriot terminated the paired share arrangement;
| | - | -------------------------------------------------------



| |  | each outstanding paired share was converted into one share of our class A common stock; and
| | - | -------------------------------------------------------------------------------------------



| |  | Patriot terminated its status as a REIT effective January 1, 1999 and became a taxable corporation as of that date.
| | - | -------------------------------------------------------------------------------------------------------------------



Also on June 30, 1999, we completed a $1 billion series B preferred stock
equity investment, closed a new credit facility (comprised of a senior credit facility and an increasing rate loan facility), which has since been amended and restated, and closed on additional mortgage debt. Holders of our series B preferred stock
are entitled to a quarterly dividend on a cumulative basis at a rate of 9.75% per year of which a portion is payable in additional shares of our series B preferred stock. Our series B preferred stock is convertible, at the holders option, into
shares of our class B common stock. Also in 1999, we completed a rights offering of our series A preferred stock, which, except for voting rights, has substantially similar terms to our series B preferred stock. We used the proceeds of our series A
preferred stock offering to redeem some of our series B preferred stock.



Our credit facility prohibits us from paying the cash portion of the preferred stock dividend until expiration or further amendment of our credit facility. Under the terms of our preferred stock, if cash dividends are
in arrears and unpaid for a period of 60 days or more, an additional amount of dividends accrue at a rate per annum of 2.0% of the stated amount of each share of preferred stock then outstanding from the last payment date on which cash dividends
were to be paid in full until all cash dividends in arrears have been paid in full. Such additional dividends are cumulative and payable in additional shares of preferred stock. As of December 31, 2003, we had issued additional stock dividends of
637,652 shares of series A and series B preferred stock with a value of $63.8 million because cash dividends totaling $73.1 million on the preferred stock had been in arrears and unpaid for a period of more than 60 days.



Over the past several years we have sold, and we currently intend to continue
to sell, all of our non-strategic, non-convertible assets. These are properties that do not fit our proprietary brand profile because of the quality of the asset or the fact that it is encumbered by a long-term licensing agreement with a non-Wyndham
brand. By disposing of these assets, we will be able to focus solely on being a branded operating company, as well as reducing our debt with the majority of the net proceeds from these asset sales. Since implementing this plan in



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June of 1999, we have sold 129 assets with gross proceeds of approximately $1.85 billion. As of December 31, 2003, we have 24 non-strategic assets
remaining to be sold. These assets will be held until such time as the sales price meets or exceeds managements assessment of their fair value.



In 2001, we sold or exchanged the following assets:



| |  | two hotels and a sewer company, in separate transactions for aggregate net cash proceeds of approximately $8.6 million, after we repaid approximately $21.8 million of debt;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | one hotel in which we retained a preferred equity interest for net cash proceeds of approximately $19.7 million;
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | three hotels and investments in four additional hotels in a single transaction for net cash proceeds of approximately $58.7 million; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | six hotels, which were exchanged for one hotel.
| | - | -----------------------------------------------



In 2002, we sold the following assets:



| |  | seven hotels and an investment in a restaurant venture, in separate transactions for aggregate net cash proceeds of approximately $60.1 million, after we repaid approximately $65.7
million of debt. Also, $38.7 million of the net cash proceeds from the sale of the assets was used by us to pay down a portion of our senior credit facility and increasing rate loans facility; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | thirteen hotels in a single transaction for net cash proceeds of approximately $202.5 million, after we repaid approximately $224.1 million of debt and placed $36.1 million in
escrow under the terms of our senior credit facility for application by us in the future to make payments on existing mortgage indebtedness. Also, $127.6 million of the net cash proceeds from the sale of the assets was used by us to pay down a
portion of our senior credit facility and increasing rate loans facility. As of December 31, 2003, $10.3 million of the $36.1 million has been applied in payment of existing mortgage indebtedness.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In 2003, we sold or terminated leases for the following assets:



| |  | eighteen hotels, two parcels of undeveloped land and a golf venture in separate transactions for aggregate net cash proceeds of approximately $107.4 million, after the repayment of
mortgage debt of approximately $114.9 million. Also, $68.3 million of the net cash proceeds was used by us to pay down a portion of the senior credit facility and increasing rate loans facility, and we retained the rest of the net cash proceeds in
accordance with the terms of the senior credit facilities; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Hospitality Properties Trust (HPT) terminated leases on 27 hotel properties (15 Summerfield Suites by Wyndham and 12 Wyndham Hotels and Wyndham Garden Hotels) operated by two of our subsidiaries. HPT rebranded 14 Summerfield
Suites by Wyndham to a third-party brand on
October 6, 2003, and one property remains a Summerfield Suite pursuant to a franchise agreement with HPT. Under a final settlement agreement, the 12 Wyndham Hotels and Wyndham Garden Hotels will be rebranded to a third-party brand by the end of
2004. On an annualized basis, based upon projections for the calendar year 2003, the estimated positive impact on cash flow of the lease terminations to our subsidiaries is $14.3 million. For the year ended December 31, 2003, the terminations
resulted in a non-cash write-off of approximately $153.9 million for the leases remaining book value.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During 2004 to date, we have sold our investments in nine hotel entities in three separate transactions for net cash proceeds of $45.6 million after
payment of $96.5 million of mortgage debt. We used $34.8 million of the net cash proceeds to pay down a portion of the senior credit facility and increasing rate loan facility, and retained the rest of the net cash proceeds in accordance with the
terms of the senior credit facilities.



In March 2004, the
leases on six Summerfield Suites by Wyndham properties were terminated and the properties were converted to long-term franchises. Assets of approximately $22 million, which represented the leases remaining book value, were considered
impaired and written-off as of December 31, 2003.



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General Description of Our Business



We classify our business into two groups: (1) proprietary branded hotels and (2) non-proprietary branded hotels. Our
proprietary branded hotels are Wyndham Hotels & Resorts®, Wyndham Luxury Resorts®, Wyndham Garden Hotels®, and Summerfield Suites by Wyndham consisting of 152 owned, leased, managed, or franchised hotels with over 40,200 guest rooms as of December 31, 2003. Wyndham Hotels & Resorts® is our principal proprietary branded group of assets. Through both our Wyndham Hotels & Resorts® brand and our Wyndham Garden Hotels® brand, we offer upper upscale, full-service
accommodations to business and leisure travelers. Through our Wyndham Luxury Resorts brand, we offer luxury accommodations, such as the Boulders and Carmel Valley Ranch. Through our Summerfield Suites by Wyndham brand, we offer upper upscale, all-suite accommodations to business and leisure
travelers.



Our primary growth strategy for our proprietary
brand has been to expand through new management and franchise contracts, rebrand our convertible nonproprietary hotels to the Wyndham flag, operate efficiently through revenue generation and cost containment programs and build the brand through
innovative programs.



Our non-proprietary branded hotels
consist of 38 owned, managed or franchised hotels with over 10,700 guest rooms as of December 31, 2003. The majority of these hotels are operated under franchise or brand affiliations with nationally recognized hotel companies, including Crowne
Plaza®, Hilton®, Hyatt®, Radisson®, Holiday Inn®, Doubletree®, Ramada®, and
Marriott®. We manage all but 16 of these hotels.
Our non-proprietary branded hotels are operated primarily by Performance Hospitality Management, or PHM, one of our management divisions. In addition to our owned assets, PHM manages one non-proprietary branded hotel for a third party. We intend to
continue to selectively dispose of our non-proprietary branded hotels through asset sales and exchanges to create a source of capital for us to (1) repay debt and (2) continue expanding the Wyndham proprietary brand.



Please see Results of Reporting Segments under Item 7 of this
Form 10-K and Note 13 to the Notes to our consolidated financial statements for information about our business segments.



Our Business Strengths



| |  | Strong Brand Name. Our proprietary brands all have at least a 19-year history and our Wyndham brand is highly recognized in our industry. Our Wyndham brand, including
Summerfield Suites by Wyndham, serves to identify
high quality assets with a consistent and high level of customer service and reliability.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Geographically Diverse Portfolio. To help mitigate the effects of regional downturns in the hotel industry, we have assembled a geographically diverse portfolio of hotels and
resorts.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Control over Property Execution. We own or operate approximately 60% of our proprietary branded portfolio. As a result, we can more efficiently and effectively implement
brand-enhancing programs, such as the Wyndham Brand Standards, the program we implemented in 2000 to standardize the stay experience in all of our hotels, and Wyndham ByRequest®, our innovative guest recognition program which builds brand loyalty by allowing our guests to customize their stay. We
were able to implement both of these programs in our proprietary branded properties in less than one year. In addition, through economies of scale, we benefit from greater purchasing and negotiating power when addressing company-wide marketing,
insurance, and other hotel services. Furthermore, in markets where we have multiple hotels, we are able to create more consistent operating performance and reduce costs by combining certain operating functions.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Personalized Guest Experience. Through our innovative brand-enhancing program, Wyndham ByRequest®, we are able to provide each ByRequest member a personalized stay experience. Based on the members personal
ByRequest profile, we arrange their guest room amenities before check-in. In addition, Wyndham ByRequest® allows us to customize on-going communications with members and tailor future travel benefits to our members ByRequest profile. The number of active members has tripled since the
introduction of the Free Long Distance Phone Call Program on June 1, 2002. At December 31, 2003, the program had over 1.7 million members.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | Captured Market Share. We have continued to capture market share versus our competitors since our June 30, 1999 reorganization with programs such as our Women on Their Way,
which is designed to serve the needs of the female traveler. Our Women on Their Way program and our on-going commitment to diversity have enabled us to capture a substantial share of the emerging market segment of the young, female business
traveler, the fastest growing segment of all business travelers.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Business Strategy



Since our June 30, 1999
reorganization, we have been focused on increasing our proprietary branded assets by obtaining new management and franchise contracts and rebranding our non-strategic assets. We have been building our brand by growing our management and franchise
business and implementing innovative programs. Additionally, we have created brand operating efficiencies with revenue generation and cost containment programs.



| |  | Dispose of non-strategic assets. Over the past several years we have sold, and we currently intend to continue to sell, all of our non-strategic, non-convertible assets.
These are properties that do not fit our proprietary brand profile because of the quality of the asset or the fact that it is encumbered by a long-term licensing agreement with a non-Wyndham brand. By disposing of these assets, we will be able to
focus solely on being a branded operating company, as well as reduce our debt with the net proceeds from these asset sales. Since implementing this plan in June of 1999, we have sold 129 assets with gross proceeds of approximately $1.85 billion. As
of December 31, 2003, we have 24 non-strategic assets remaining to be sold. These assets will be held until such time as the sales price meets or exceeds managements assessment of fair value.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Rebrand existing hotels. Where opportunities exist, we continue to rebrand eligible non-proprietary assets that fit our Wyndham brand. Rebranded properties benefit from our
global distribution system and our brand defining programs. By rebranding these hotels, we benefit by increasing the geographical distribution of our Wyndham properties, which enables us to offer our guests a consistent Wyndham experience in more
locations. We also benefit by eliminating the need to pay franchise and related fees to our competitors. Since 1999, we have converted 20 assets from other brands to the Wyndham brand. We also have converted 12 Wyndham Garden hotels to full Wyndham
Hotels.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Grow our management and franchise business. We have and will continue to focus our growth efforts in the area of new management and franchise contracts. This growth will
enable us to expand our brand distribution and increase our revenues through the fee income associated with these contracts. We currently have 27 management contracts, 53 franchise agreements and 7 hotels under a strategic alliance. We are
aggressively pursuing new management and franchise opportunities and will continue to geographically target major metropolitan areas and resort destinations. We have extensive experience in the lodging industry and we believe our industry knowledge,
relationships and access to market information provide us a competitive edge with respect to identifying, evaluating and signing new hotel assets to the Wyndham brand.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Build the Wyndham brand. We continue to support and implement programs to build the Wyndham brand.
| | - | --------------------------------------------------------------------------------------------------



| |  | Our innovative guest recognition program, Wyndham ByRequest®, allows our guests to personalize their stay at any of our branded properties. We customize on-going communication and future travel benefits to our
members profiles, which we believe builds loyalty to the Wyndham brand.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Our Women on Their Way program has been successful in capturing substantial market share in the emerging market segment of the young, female business traveler and has helped create
an advantage in attracting more guests to our hotels.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We have implemented consistent brand standards in our Wyndham branded assets by including Room That Perform amentities such as high-end mattresses dressed in luxurious
duvets/coverlets, decorative pillow shams and bedskirts; Herman Miller Aeron chairs; and Golden Door Amenities in our rooms. This helps ensure a consistent stay experience in all Wyndham branded properties.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | Operate efficiently. From a revenue generation standpoint, we have continued to streamline our sales and booking efforts. After our June 30, 1999 reorganization, we brought
all of our branded assets under one global distribution code WY. This has enabled our central reservations office to efficiently cross- sell our properties and, thus, achieve a greater maximization of revenues. Beginning with our June
30, 1999 reorganization and continuing throughout 2003, we have continued our cost containment programs. The programs include, among other things, a permanent reduction in our workforce at both our corporate office and our properties; a temporary
furloughing of employees at our properties; reduced restaurant hours and closed floors and wings of hotels commensurate with occupancy levels; and the renegotiation of service agreements and trade contracts.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Proprietary Brands



We market all of our proprietary products under the Wyndham brand umbrella, which includes four-star, upper upscale hotels
that offer full-service accommodations to business and leisure travelers, and a five-star luxury resort brand. With hotels in major urban, suburban and resort markets, our Wyndham brand offers products geared to the specific needs of travelers based
on their location, facilities and travel purpose.



Wyndham
Hotels & Resorts®. This brand
includes our principal proprietary brand of hotels and resorts. Our hotel brand features upper upscale, full-service hotels that contain an average of 300 hotel rooms, generally between 15,000 and 315,000 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. These hotels, which are located primarily in the central business districts and dominant suburbs of major metropolitan markets, target
business groups, meetings and individual business and leisure travelers. These hotels offer elegantly appointed facilities and high levels of quality guest service.



Our distinctive, full-service Wyndham resorts contain an average of 410 rooms and a full range of guest services for leisure
travelers and business groups. We are the largest owner/operator of resorts in the Carribean and Florida.



Wyndham Luxury Resorts®. This brand includes five-star, luxury hotel properties featuring between 50 and 200 rooms, numerous fine dining options and other luxury and
recreational amenities. These luxury resorts distinguish themselves by focusing on incorporating the local environment into every aspect of the property, from decor to cuisine to recreation. Our luxury resort collection includes the Golden Door®, one of the worlds preeminent destination spas
based in Escondido, California. Our luxury resorts are also located in Arizona, California, Massachusetts and Mexico.



Wyndham Garden Hotels®. This brand includes hotels that are located principally near major airports and suburban business districts and serve individual business
travelers and small business groups. These full-service hotels feature between 150 and 230 guest rooms, and include up to 6,500 square feet of meeting space. Their amenities and services generally include a three-meal restaurant, signature Wyndham
Garden® libraries, laundry and room service.



Summerfield Suites by Wyndham. This brand offers guests one of the highest quality
lodging experiences in the upper upscale, all-suites segment. Each suite contains a fully equipped kitchen, a spacious living room and a private bedroom. Many of the suites feature two bedroom, two bath units. Each hotel also has a swimming pool,
exercise room and other amenities to serve business and leisure travelers. Each hotel features 90 to 280 suites in either interior or exterior corridor design.



Our Non-Proprietary Brands



Among our non-proprietary branded hotels, we own and/or operate 24 hotels aggregating over 5,800 rooms under franchise or brand affiliations with
nationally recognized hotel companies, including Crowne Plaza®,



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Hilton®, Hyatt®, Radisson®, Holiday
Inn®, Doubletree®, Ramada® and Marriott®. The majority of our non-proprietary branded hotels are full-service hotels that operate in the upscale and upper upscale segments of the hotel
industry. Our 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 Information



The following table sets forth, for each of our owned and
leased hotels as of December 31, 2003, the hotels and number of rooms and, for the year ended December 31, 2003, total revenue, average daily rate, average occupancy rate, and revenue per available room.



|                                              |  |                              |  |         |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|--------------------------------------------- |  | ---------------------------- |  | ------- |  | ------------- |  | ------------ | ------ | ---------------- | - | --------- |  | ---- | ----------------------- |  | - | ------
|Property Name                                 |  | City                         |  | State   |  | NumberofRooms |  | TotalRevenue |        | AverageDailyRate |   | Occupancy |  |      | RevenueperAvailableRoom
|                                              |  | (Total Revenue in thousands)
|Wyndham Hotels & Resorts®                     |  |                              |  |         |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|Wyndham Andover                               |  | Andover                      |  | MA      |  | 293           |  | $            | 10,382 |                  | $ | 92.24     |  | 59.0 | %                       |  | $ | 54.42 
|Wyndham Arlington                             |  | Arlington                    |  | TX      |  | 310           |  | $            | 11,334 |                  | $ | 96.88     |  | 60.5 | %                       |  | $ | 58.58 
|Wyndham Atlanta                               |  | Atlanta                      |  | GA      |  | 312           |  | $            | 10,780 |                  | $ | 109.23    |  | 59.9 | %                       |  | $ | 65.46 
|Wyndham BaltimoreInner Harbor                |  | Baltimore                    |  | MD      |  | 707           |  | $            | 29,129 |                  | $ | 114.82    |  | 63.6 | %                       |  | $ | 73.07 
|Wyndham Bel Age                               |  | West Hollywood               |  | CA      |  | 200           |  | $            | 14,234 |                  | $ | 140.09    |  | 85.6 | %                       |  | $ | 119.92
|Wyndham Billerica                             |  | Billerica                    |  | MA      |  | 210           |  | $            | 5,754  |                  | $ | 89.16     |  | 56.6 | %                       |  | $ | 50.47 
|Wyndham Boston                                |  | Boston                       |  | MA      |  | 362           |  | $            | 21,617 |                  | $ | 142.90    |  | 84.9 | %                       |  | $ | 121.36
|Wyndham Bristol PlaceToronto Airport         |  | Toronto                      |  | Ontario |  | 287           |  | $            | 12,164 |                  | $ | 84.47     |  | 74.9 | %                       |  | $ | 63.25 
|Wyndham Buttes Resort                         |  | Tempe                        |  | AZ      |  | 353           |  | $            | 22,960 |                  | $ | 109.80    |  | 78.8 | %                       |  | $ | 86.51 
|Wyndham Casa Marina Resort & Beach House      |  | Key West                     |  | FL      |  | 311           |  | $            | 27,089 |                  | $ | 183.60    |  | 87.0 | %                       |  | $ | 159.73
|Wyndham Chicago                               |  | Chicago                      |  | IL      |  | 417           |  | $            | 25,858 |                  | $ | 134.23    |  | 84.4 | %                       |  | $ | 113.30
|Wyndham City Center                           |  | Washington                   |  | DC      |  | 352           |  | $            | 17,430 |                  | $ | 106.14    |  | 82.8 | %                       |  | $ | 87.93 
|Wyndham Colorado Springs                      |  | Colorado Springs             |  | CO      |  | 311           |  | $            | 8,428  |                  | $ | 71.89     |  | 64.4 | %                       |  | $ | 46.28 
|Wyndham Commerce                              |  | Commerce                     |  | CA      |  | 201           |  | $            | 6,618  |                  | $ | 73.92     |  | 77.6 | %                       |  | $ | 57.33 
|Wyndham Condado Plaza                         |  | San Juan                     |  | PR      |  | 570           |  | $            | 65,119 |                  | $ | 148.42    |  | 79.3 | %                       |  | $ | 117.72
|Wyndham Dallas Market Center                  |  | Dallas                       |  | TX      |  | 228           |  | $            | 5,488  |                  | $ | 83.17     |  | 58.8 | %                       |  | $ | 48.87 
|Wyndham Denver Tech Center                    |  | Denver                       |  | CO      |  | 180           |  | $            | 3,911  |                  | $ | 71.68     |  | 55.3 | %                       |  | $ | 39.63 
|Wyndham  Dublin (Columbus)                   |  | Columbus                     |  | OH      |  | 217           |  | $            | 6,145  |                  | $ | 70.76     |  | 60.1 | %                       |  | $ | 42.52 
|Wyndham El Conquistador Resort & Country Club |  | Fajardo                      |  | PR      |  | 750           |  | $            | 92,338 |                  | $ | 200.80    |  | 70.7 | %                       |  | $ | 142.03
|Wyndham El San Juan Hotel & Casino            |  | San Juan                     |  | PR      |  | 382           |  | $            | 64,474 |                  | $ | 212.83    |  | 85.1 | %                       |  | $ | 181.09
|Wyndham Emerald Plaza                         |  | San Diego                    |  | CA      |  | 436           |  | $            | 23,648 |                  | $ | 129.63    |  | 82.1 | %                       |  | $ | 106.44
|Wyndham Ft Lauderdale Airport                 |  | Dania                        |  | FL      |  | 383           |  | $            | 13,596 |                  | $ | 80.01     |  | 79.3 | %                       |  | $ | 63.45 
|Wyndham Grand BayCoconut Grove               |  | Miami                        |  | FL      |  | 177           |  | $            | 9,612  |                  | $ | 113.77    |  | 77.2 | %                       |  | $ | 87.85 
|Wyndham Harbour Island                        |  | Tampa                        |  | FL      |  | 299           |  | $            | 15,807 |                  | $ | 121.76    |  | 74.7 | %                       |  | $ | 91.01 
|Wyndham Indianapolis                          |  | Indianapolis                 |  | IN      |  | 171           |  | $            | 3,873  |                  | $ | 66.74     |  | 63.9 | %                       |  | $ | 42.66 



7



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##### Table of Contents

##### Index to Financial Statements

|                                             |  |                              |  |         |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|-------------------------------------------- |  | ---------------------------- |  | ------- |  | ------------- |  | ------------ | ------ | ---------------- | - | --------- |  | ---- | ----------------------- |  | - | ------
|Property Name                                |  | City                         |  | State   |  | NumberofRooms |  | TotalRevenue |        | AverageDailyRate |   | Occupancy |  |      | RevenueperAvailableRoom
|                                             |  | (Total Revenue in thousands)
|Wyndham Lisle                                |  | Lisle                        |  | IL      |  | 242           |  | $            | 9,079  |                  | $ | 88.32     |  | 58.6 | %                       |  | $ | 51.77 
|Wyndham Miami Airport                        |  | Miami                        |  | FL      |  | 408           |  | $            | 11,166 |                  | $ | 66.22     |  | 75.8 | %                       |  | $ | 50.22 
|Wyndham Miami Beach Resort                   |  | Miami                        |  | FL      |  | 424           |  | $            | 21,106 |                  | $ | 105.97    |  | 80.5 | %                       |  | $ | 85.28 
|Wyndham New Orleans                          |  | New Orleans                  |  | LA      |  | 438           |  | $            | 28,232 |                  | $ | 142.72    |  | 82.6 | %                       |  | $ | 117.82
|Wyndham Newark                               |  | Newark                       |  | NJ      |  | 396           |  | $            | 13,522 |                  | $ | 76.69     |  | 72.1 | %                       |  | $ | 55.29 
|Wyndham Northwest Chicago                    |  | Itasca                       |  | IL      |  | 408           |  | $            | 23,895 |                  | $ | 102.91    |  | 58.1 | %                       |  | $ | 59.76 
|Wyndham Palace Resort  & Spa                 |  | Lake Buena Vista             |  | FL      |  | 1013          |  | $            | 63,516 |                  | $ | 129.53    |  | 75.7 | %                       |  | $ | 98.11 
|Wyndham Peachtree Conference Center          |  | Peachtree City               |  | GA      |  | 250           |  | $            | 12,591 |                  | $ | 103.07    |  | 67.2 | %                       |  | $ | 69.30 
|Wyndham Peaks Resort & Golden Door Spa       |  | Telluride                    |  | CO      |  | 174           |  | $            | 14,522 |                  | $ | 218.01    |  | 58.9 | %                       |  | $ | 128.49
|Wyndham Philadelphia at Franklin Plaza       |  | Philadelphia                 |  | PA      |  | 757           |  | $            | 37,365 |                  | $ | 106.68    |  | 70.0 | %                       |  | $ | 74.71 
|Wyndham Pittsburgh Airport                   |  | Corapolis                    |  | PA      |  | 314           |  | $            | 10,963 |                  | $ | 73.43     |  | 72.3 | %                       |  | $ | 53.09 
|Wyndham Reach Resort                         |  | Key West                     |  | FL      |  | 150           |  | $            | 12,796 |                  | $ | 171.22    |  | 90.1 | %                       |  | $ | 154.20
|Wyndham Richmond Airport                     |  | Richmond                     |  | VA      |  | 155           |  | $            | 4,033  |                  | $ | 60.50     |  | 76.1 | %                       |  | $ | 46.02 
|Wyndham Riverfront                           |  | New Orleans                  |  | LA      |  | 202           |  | $            | 7,683  |                  | $ | 130.59    |  | 67.1 | %                       |  | $ | 87.57 
|Wyndham Roanoke Airport                      |  | Roanoke                      |  | VA      |  | 320           |  | $            | 7,743  |                  | $ | 63.51     |  | 67.2 | %                       |  | $ | 42.70 
|Wyndham Rose Hall Resort & Country Club      |  | Montego Bay                  |  | Jamaica |  | 485           |  | $            | 26,565 |                  | $ | 99.22     |  | 82.0 | %                       |  | $ | 81.39 
|Wyndham Syracuse                             |  | Syracuse                     |  | NY      |  | 250           |  | $            | 10,724 |                  | $ | 80.83     |  | 74.3 | %                       |  | $ | 60.06 
|Wyndham Toledo                               |  | Toledo                       |  | OH      |  | 241           |  | $            | 7,682  |                  | $ | 76.47     |  | 68.2 | %                       |  | $ | 52.14 
|Wyndham Vinings                              |  | Atlanta                      |  | GA      |  | 159           |  | $            | 4,573  |                  | $ | 81.65     |  | 72.5 | %                       |  | $ | 59.16 
|Wyndham Washington, D.C.                     |  | Washington                   |  | DC      |  | 400           |  | $            | 21,846 |                  | $ | 123.70    |  | 80.1 | %                       |  | $ | 99.11 
|Wyndham Westborough                          |  | Westborough                  |  | MA      |  | 223           |  | $            | 9,486  |                  | $ | 96.14     |  | 65.1 | %                       |  | $ | 62.62 
|Wyndham Westshore Tampa                     |  | Tampa                        |  | FL      |  | 324           |  | $            | 15,327 |                  | $ | 84.23     |  | 82.5 | %                       |  | $ | 69.50 
|Wyndham Windwatch                            |  | Haupauge                     |  | NY      |  | 360           |  | $            | 18,693 |                  | $ | 110.82    |  | 72.5 | %                       |  | $ | 80.37 
|The Fairmount HotelA Wyndham Historic Hotel |  | San Antonio                  |  | TX      |  | 37            |  | $            | 1,832  |                  | $ | 109.45    |  | 81.3 | %                       |  | $ | 89.00 
|The Tremont BostonA Wyndham Historic Hotel  |  | Boston                       |  | MA      |  | 322           |  | $            | 12,768 |                  | $ | 98.29     |  | 84.6 | %                       |  | $ | 83.11 
|The TutwilerA Wyndham Historic Hotel        |  | Birmingham                   |  | AL      |  | 147           |  | $            | 5,033  |                  | $ | 98.92     |  | 63.9 | %                       |  | $ | 63.24 
|Union StationA Wyndham Historic Hotel       |  | Nashville                    |  | TN      |  | 125           |  | $            | 4,944  |                  | $ | 95.97     |  | 72.4 | %                       |  | $ | 69.48 
|                                             |  |                              |  |         |  |               | 
|Wyndham Luxury Resorts®                      |  |                              |  |         |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|Carmel Valley RanchA Wyndham Luxury Resort  |  | Carmel Valley                |  | CA      |  | 144           |  | $            | 16,821 |                  | $ | 209.98    |  | 74.3 | %                       |  | $ | 156.02
|The BouldersA Wyndham Luxury Resort         |  | Carefree                     |  | AZ      |  | 160           |  | $            | 38,991 |                  | $ | 251.51    |  | 76.8 | %                       |  | $ | 193.09
|                                             |  |                              |  |         |  |               | 
|Wyndham Garden Hotels®                       |  |                              |  |         |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|Wyndham Garden Hotel LaGuardia              |  | East Elmhurst                |  | NY      |  | 229           |  | $            | 8,076  |                  | $ | 98.86     |  | 83.0 | %                       |  | $ | 82.02 
|Wyndham Garden HotelLas Colinas             |  | Irving                       |  | TX      |  | 168           |  | $            | 3,732  |                  | $ | 76.76     |  | 65.1 | %                       |  | $ | 49.94 



8



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##### Table of Contents

##### Index to Financial Statements

|                                           |  |                              |  |       |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|------------------------------------------ |  | ---------------------------- |  | ----- |  | ------------- |  | ------------ | ------ | ---------------- | - | --------- |  | ---- | ----------------------- |  | - | ------
|Property Name                              |  | City                         |  | State |  | NumberofRooms |  | TotalRevenue |        | AverageDailyRate |   | Occupancy |  |      | RevenueperAvailableRoom
|                                           |  | (Total Revenue in thousands)
|Summerfield Suites by Wyndham             |  |                              |  |       |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|Summerfield by WyndhamAddison             |  | Addison                      |  | TX    |  | 132           |  | $            | 2,850  |                  | $ | 68.95     |  | 81.3 | %                       |  | $ | 56.03 
|Summerfield by WyndhamBelmont             |  | Belmont                      |  | CA    |  | 132           |  | $            | 4,126  |                  | $ | 93.29     |  | 88.3 | %                       |  | $ | 82.38 
|Summerfield by WyndhamDenver              |  | Englewood                    |  | CO    |  | 136           |  | $            | 3,075  |                  | $ | 70.35     |  | 85.2 | %                       |  | $ | 59.97 
|Summerfield by WyndhamEl Segundo          |  | El Segundo                   |  | CA    |  | 122           |  | $            | 4,364  |                  | $ | 101.21    |  | 92.7 | %                       |  | $ | 93.78 
|Summerfield by WyndhamLas Colinas         |  | Irving                       |  | TX    |  | 148           |  | $            | 4,190  |                  | $ | 86.24     |  | 86.9 | %                       |  | $ | 74.98 
|Summerfield by WyndhamMiami               |  | Miami                        |  | FL    |  | 156           |  | $            | 4,224  |                  | $ | 77.42     |  | 90.3 | %                       |  | $ | 69.93 
|Summerfield by WyndhamMorristown          |  | Morristown                   |  | NJ    |  | 133           |  | $            | 5,468  |                  | $ | 129.03    |  | 82.7 | %                       |  | $ | 106.65
|Summerfield by WyndhamMt. Laurel          |  | Mt Laurel                    |  | NJ    |  | 116           |  | $            | 3,549  |                  | $ | 87.35     |  | 91.3 | %                       |  | $ | 79.79 
|Summerfield by WyndhamParsippany/Whippany |  | Whippany                     |  | NJ    |  | 136           |  | $            | 4,141  |                  | $ | 104.79    |  | 76.2 | %                       |  | $ | 79.88 
|Summerfield by WyndhamSeattle             |  | Seattle                      |  | WA    |  | 193           |  | $            | 6,252  |                  | $ | 100.64    |  | 81.3 | %                       |  | $ | 81.81 
|Summerfield by WyndhamSunrise Suites      |  | Tinton Falls                 |  | NJ    |  | 96            |  | $            | 2,794  |                  | $ | 98.08     |  | 77.0 | %                       |  | $ | 75.56 
|Summerfield by WyndhamWaltham             |  | Waltham                      |  | MA    |  | 136           |  | $            | 3,875  |                  | $ | 90.68     |  | 82.9 | %                       |  | $ | 75.16 
|                                           |  |                              |  |       |  |               | 
|Non-Proprietary Brand Properties           |  |                              |  |       |  |               |  |              |        |                  |   |           |  |      |                         |  |   |       
|Bonaventrue  Fort Lauderdale              |  | Ft Lauderdale                |  | FL    |  | 496           |  | $            | 16,320 |                  | $ | 83.72     |  | 55.2 | %                       |  | $ | 46.23 
|Crowne Plaza Ravinia                       |  | Atlanta                      |  | GA    |  | 495           |  | $            | 19,971 |                  | $ | 95.96     |  | 65.6 | %                       |  | $ | 62.93 
|Doubletree Allen Center                    |  | Houston                      |  | TX    |  | 350           |  | $            | 13,936 |                  | $ | 125.88    |  | 59.0 | %                       |  | $ | 74.24 
|Doubletree Anaheim                         |  | Orange                       |  | CA    |  | 454           |  | $            | 14,081 |                  | $ | 84.78     |  | 66.1 | %                       |  | $ | 56.02 
|Doubletree Des Plaines                     |  | Des Plaines                  |  | IL    |  | 246           |  | $            | 4,839  |                  | $ | 74.59     |  | 58.3 | %                       |  | $ | 43.48 
|Doubletree Glenview                        |  | Glenview                     |  | IL    |  | 252           |  | $            | 7,927  |                  | $ | 86.14     |  | 67.2 | %                       |  | $ | 57.89 
|Doubletree Miami                           |  | Miami                        |  | FL    |  | 266           |  | $            | 2,754  |                  | $ | 61.48     |  | 36.9 | %                       |  | $ | 22.69 
|Pickwick Hotel                             |  | San Francisco                |  | CA    |  | 188           |  | $            | 4,232  |                  | $ | 70.87     |  | 74.8 | %                       |  | $ | 52.99 
|Doubletree Overland Park                   |  | Overland Park                |  | KS    |  | 356           |  | $            | 10,158 |                  | $ | 83.59     |  | 55.9 | %                       |  | $ | 46.72 
|Doubletree Park Place                      |  | Minneapolis                  |  | MN    |  | 297           |  | $            | 9,664  |                  | $ | 83.78     |  | 56.1 | %                       |  | $ | 46.97 
|Doubletree Post Oak                        |  | Houston                      |  | TX    |  | 449           |  | $            | 18,798 |                  | $ | 104.92    |  | 60.7 | %                       |  | $ | 63.67 
|Doubletree St. Louis                       |  | Chesterfield                 |  | MO    |  | 223           |  | $            | 8,938  |                  | $ | 81.43     |  | 59.7 | %                       |  | $ | 48.61 
|Doubletree, Tallahassee                    |  | Tallahassee                  |  | FL    |  | 244           |  | $            | 8,049  |                  | $ | 91.41     |  | 72.1 | %                       |  | $ | 65.90 
|Doubletree Tulsa                           |  | Tulsa                        |  | OK    |  | 417           |  | $            | 7,634  |                  | $ | 70.36     |  | 47.8 | %                       |  | $ | 33.62 
|Hilton Cleveland                           |  | Independence                 |  | OH    |  | 191           |  | $            | 8,617  |                  | $ | 86.76     |  | 58.5 | %                       |  | $ | 50.78 
|Hilton Denver                              |  | Greenwood Village            |  | CO    |  | 305           |  | $            | 7,972  |                  | $ | 75.29     |  | 56.0 | %                       |  | $ | 42.15 
|Hilton Parsippany                          |  | Parsippany                   |  | NJ    |  | 510           |  | $            | 22,815 |                  | $ | 123.61    |  | 60.2 | %                       |  | $ | 74.36 
|Hilton Newark                              |  | Newark                       |  | NJ    |  | 253           |  | $            | 11,009 |                  | $ | 126.38    |  | 66.3 | %                       |  | $ | 83.81 



9



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##### Table of Contents

##### Index to Financial Statements

|                               |  |                              |  |       |  |               |  |              |        |                  |   |           |  |      |                         |  |   |      
|------------------------------ |  | ---------------------------- |  | ----- |  | ------------- |  | ------------ | ------ | ---------------- | - | --------- |  | ---- | ----------------------- |  | - | -----
|Property Name                  |  | City                         |  | State |  | NumberofRooms |  | TotalRevenue |        | AverageDailyRate |   | Occupancy |  |      | RevenueperAvailableRoom
|                               |  | (Total Revenue in thousands)
|Holiday Inn Aristocrat         |  | Dallas                       |  | TX    |  | 172           |  | $            | 3,160  |                  | $ | 86.47     |  | 48.7 | %                       |  | $ | 42.12
|Holiday Inn Dallas             |  | Dallas                       |  | TX    |  | 377           |  | $            | 6,091  |                  | $ | 60.79     |  | 44.2 | %                       |  | $ | 26.89
|Holiday Inn Houston            |  | Houston                      |  | TX    |  | 193           |  | $            | 2,654  |                  | $ | 54.29     |  | 52.0 | %                       |  | $ | 28.26
|Holiday Inn San Angelo         |  | San Angelo                   |  | TX    |  | 148           |  | $            | 2,491  |                  | $ | 61.57     |  | 62.7 | %                       |  | $ | 38.62
|Holiday Inn Westlake           |  | Westlake                     |  | OH    |  | 266           |  | $            | 5,501  |                  | $ | 70.95     |  | 50.2 | %                       |  | $ | 35.62
|Hyatt Lexington                |  | Lexington                    |  | KY    |  | 365           |  | $            | 11,696 |                  | $ | 89.70     |  | 54.4 | %                       |  | $ | 48.81
|Marriott Atlanta North Central |  | Atlanta                      |  | GA    |  | 287           |  | $            | 8,885  |                  | $ | 92.85     |  | 53.6 | %                       |  | $ | 49.74
|Marriott Harrisburg            |  | Harrisburg                   |  | PA    |  | 348           |  | $            | 15,494 |                  | $ | 106.24    |  | 72.3 | %                       |  | $ | 76.79
|Park Shore                     |  | Honolulu                     |  | HI    |  | 226           |  | $            | 6,395  |                  | $ | 75.84     |  | 83.0 | %                       |  | $ | 62.94
|Radisson Akron                 |  | Akron                        |  | OH    |  | 128           |  | $            | 2,067  |                  | $ | 62.82     |  | 59.3 | %                       |  | $ | 37.24
|Radisson Burlington            |  | Burlington                   |  | VT    |  | 256           |  | $            | 12,048 |                  | $ | 113.75    |  | 79.9 | %                       |  | $ | 90.84
|Radisson Dallas                |  | Dallas                       |  | TX    |  | 199           |  | $            | 3,175  |                  | $ | 61.01     |  | 50.4 | %                       |  | $ | 30.76
|Radisson New Orleans           |  | New Orleans                  |  | LA    |  | 759           |  | $            | 16,032 |                  | $ | 88.06     |  | 48.0 | %                       |  | $ | 42.31
|Radisson Town & Country        |  | Houston                      |  | TX    |  | 173           |  | $            | 3,956  |                  | $ | 76.56     |  | 63.7 | %                       |  | $ | 48.74
|Ramada San Francisco           |  | San Francisco                |  | CA    |  | 176           |  | $            | 1,957  |                  | $ | 50.17     |  | 34.5 | %                       |  | $ | 17.30
|Regency                        |  | San Juan                     |  | PR    |  | 127           |  | $            | 2,854  |                  | $ | 102.39    |  | 55.4 | %                       |  | $ | 56.68
|Sheraton Saginaw               |  | Saginaw                      |  | MI    |  | 156           |  | $            | 2,593  |                  | $ | 58.36     |  | 67.6 | %                       |  | $ | 39.44



Total Portfolio



|                                  |  |       |  |        |  |         |  |            |  |                   |  |      
|--------------------------------- |  | ----- |  | ------ |  | ------- |  | ---------- |  | ----------------- |  | -----
|                                  |  | Owned |  | Leased |  | Managed |  | Franchised |  | StrategicAlliance |  | Total
|Wyndham Hotels & Resorts®         |  | 48    |  | 4      |  | 19      |  | 20         |  | 7                 |  | 98   
|Wyndham Luxury Resorts®           |  | 2     |  |       |  | 3       |  |           |  |                  |  | 5    
|Wyndham Garden Hotels®            |  | 2     |  |       |  | 2       |  | 20         |  |                  |  | 24   
|Summerfield Suites by Wyndham    |  | 6     |  | 6      |  |        |  | 13         |  |                  |  | 25   
|                                  |  |       |  |        |  |         |  |            |  |                   |  |      
|Proprietary Brand HotelsSubtotal |  | 58    |  | 10     |  | 24      |  | 53         |  | 7                 |  | 152  
|Non-Proprietary Brand Hotels      |  | 35    |  |       |  | 3       |  |           |  |                  |  | 38   
|                                  |  |       |  |        |  |         |  |            |  |                   |  |      
|Total                             |  | 93    |  | 10     |  | 27      |  | 53         |  | 7                 |  | 190  
|                                  |  |       |  |        |  |         |  |            |  |                   |  |      



Franchise and Brand
Affiliations



As of December 31, 2003, all but three of
our owned hotels are operated under franchise or brand affiliations with nationally recognized hotel companies. Franchisors and brand operators provide a variety of benefits for our hotels, including national advertising, publicity and other
marketing programs designed to increase brand awareness, training of personnel, continuous review of quality standards and centralized reservation systems. We generally are the licensee under the franchise agreements related to such hotels. Under
these franchise agreements, franchise royalties and fees generally range up to approximately 10% of room revenue. The duration of these franchise agreements vary, but generally may be terminated upon prior notice or upon payment of certain specified
fees.



Management of Hotels



As of December 31, 2003, we managed 27 hotels for third party owners
pursuant to management agreements under which we are responsible for the day-to-day operations of these hotels. Of these managed hotels, we managed 24 hotels under our proprietary brands and three hotels under non-proprietary brands. The day-to-day
operations of these hotels include managing hotel accommodations, meeting rooms and food and beverage services as well as hiring and training staff, planning and providing sales and marketing services,



10



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##### Table of Contents

##### Index to Financial Statements

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 per managed hotel. The terms of the management agreements vary from hotel to hotel, but range from 1 to 20
years. As of December 31, 2003, the average remaining term for the management agreements was approximately 6.2 years.



Strategic Alliance



On December 1, 2003, we entered into a strategic alliance agreement with Viva Resorts. Under the 10-year agreement, seven Viva properties located in the
Bahamas, Mexico and the Dominican Republic were re-branded to Viva Wyndham Resorts and incorporated into the Wyndham portfolio. Viva Wyndham Caribbean properties include the 276-room Viva Wyndham Fortuna BeachGrand Bahama Island, The Bahamas;
the 330-room Viva Wyndham Dominicus Beach  La Romana, Dominican Republic; the 330-room Viva Wyndham Dominicus Palace  La Romana, Dominican Republic; and the 223-room Viva Wyndham TangerineCabarete, Dominican Republic. The Viva
Wyndham Mexican properties include the 400-room Viva Wyndham MayaPlayacar, Mexico; the 234-room Viva Wyndham AztecaPlayacar, Mexico; and the 355-room Viva Wyndham VallartaVallarta, Mexico. The new Viva Wyndham properties
incorporate Wyndham brand standards and our guest recognition program, Wyndham ByRequest®.



Employees



As of December 31, 2003, we employed approximately 22,000 employees. In our
opinion, we a have good relationship with our employees and we retain appropriate support personnel to manage our operations.



Certain Risk Factors



An investment in our class A common stock is subject to the significant risks inherent in our business. Readers should consider carefully the risks and
uncertainties described below and the other information included in this Annual Report on Form 10-K. The occurrence of any of the events described below could affect our business or cause our actual results to differ materially from those expressed
in any forward-looking statements made by us.



General
Business Risks



We may fail to compete effectively and
lose business. The profitability of our hotels is subject to general economic conditions, competition, the desirability of particular locations, the relationship between supply of and demand for hotel rooms, and other factors. We generally
operate in markets that contain numerous competitors and our continued success will depend, in large part, upon our ability to compete in areas such as access, location, quality of accommodations, amenities, specialized services, cost containment,
and, to a lesser extent, the quality and scope of food and beverage services and facilities. Our operational and growth prospects also depend on the strength and desirability of our brands and our ability to maintain positive relations with our
employees.



Changes in supply and demand, and other
conditions, in our industry may adversely affect our revenues and profits. Our revenues and profitability may be adversely affected by (1) supply additions, (2) international, national and regional economic conditions, (3) changes in travel
patterns, (4) taxes and government regulations that influence or determine wages, prices, interest rates, construction procedures and costs, and (5) the availability of capital to allow us and potential hotel owners to fund investments. In
particular, over-building in one or more sectors of our industry and/or in one or more geographic regions could lead to excess supply compared to demand and a decrease in hotel occupancy and/or room rates.



A sluggish economy may continue to adversely impact our financial results
and growth. A sluggish economy, lack of consumer confidence in the stock market and other national and world events, including acts of



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terrorism and/or war, have created a significant amount of uncertainty about future prospects of national and world economies. The overall long-term effect
on us and the lodging industry is also uncertain. In the face of such uncertainty, we developed and implemented a contingency plan focused particularly on cost management. We cannot predict either the severity or duration of such economic declines,
but weaker hotel performance will, in turn, have an adverse impact on our business, financial condition, and results of operations.



Industry Risks



Our business is subject to operating risks common to the hotel industry. Our primary business is owning and managing hotels. This business is
subject to operating risks common to the hotel industry, including:



| |  | competition for guests from other hotels, a number of which may have greater marketing and financial resources and experience 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 and 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, 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 the 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 business, financial condition and results of operations.



Consumers could develop brand loyalties to Internet based hotel
reservation systems rather than to our lodging brands. A percentage of our hotel rooms are booked through Internet travel intermediaries such as Expedia.com, Hotel.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 lodging
brands. If this occurs, it could adversely affect our business, financial condition and results of operations.



Unexpected hotel renovation costs and capital expenditures could adversely affect our business. 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 our leases with third parties and mortgages on owned hotels, 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.



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We face significant 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 are suitable, which could adversely affect our ability to grow our business.



Seasonality of the hotel industry could make it difficult to predict the
revenues of our various properties. The hotel industry is seasonal in nature; however, the periods during which our hotel properties experience higher revenues vary from property to property and depend predominantly on the propertys
location. Our revenues typically have been higher in the first and second quarters than in the third and fourth quarters.



Real Estate Risks



Changes in the real estate sector could adversely affect our operations. 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 and international 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 financing;
| | - | ------------------------------------------------------------------



| |  | 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 or war;
| | - | --------------------



| |  | the impact of terrorist activity, threats of terrorist activity and responses thereto;
| | - | --------------------------------------------------------------------------------------



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



| |  | other factors that are beyond our control.
| | - | ------------------------------------------



We may be unable to sell properties when we want to because real estate investments are illiquid. 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.



We would be adversely affected if our property taxes increase. 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 business, financial condition and results of operations.



We may be unable to obtain consents of ground lessors required for the
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



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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.



Environmental problems are possible and can be costly. 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 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 business, financial condition and results of operations. Also, there may be material environmental liabilities or compliance concerns of which we are currently
unaware.



Some potential losses are not covered by
insurance. We maintain insurance coverage on all of our hotels. Each of our leases with third parties and mortgages on owned hotels requires comprehensive insurance to be maintained on each of the applicable hotels, including liability, fire and
extended coverage. We believe this specified coverage is of the type and amount customarily obtained for hotels. Leases or mortgages for subsequently acquired hotels will contain similar provisions. However, there are certain types of losses,
generally of a catastrophic nature caused by events such as earthquakes, floods, terrorism or war that may be uninsurable or not economically insurable. We use our 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.



Hotels that we acquire or develop may fail to perform according to our
expectations. Under appropriate circumstances, we may pursue acquisitions of additional hotels and hotel operating companies and 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 acquire, operate and market the acquired 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.



Third party owners may terminate our
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. In addition,
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, upon the closing of the property or upon certain business combinations involving us in which our name or current management team does not survive.



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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.



We could lose the right to operate 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 that we determine 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, we 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



Our
gaming operations depend on decisions by gaming authorities. We own and operate 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.



Volatility in the high-end gaming business could adversely impact our
financial condition. 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 business, 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 business, financial condition and results of operations.



Risks Relating to Our Indebtedness



We are
substantially leveraged and have debt payments of approximately $292.7 million due in 2004. Of that amount, we can elect to extend $214.5 million for two additional twelve month periods, and an additional $19 million of debt has been provided
for in a restricted cash account. We are seeking to refinance the remaining scheduled principal payments and debt prior to their maturities in 2004. However, there can be no assurance that we will be able to do so.



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As of December 31, 2003, we
had $2.68 billion of total indebtedness; comprised of (i) $164.1 million of revolving credit availability under our revolving credit facility, (ii) $1.05 billion of term loans I, (iii) $343.3 million of term loans II, (iv) $15.1 million of
increasing rate loans, (v) $1.07 billion of mortgage debt, and (vi) $36.9 million of capital lease obligations. In addition, we may incur additional indebtedness in the future, subject to certain limitations contained in the instruments and
documents governing our indebtedness. Accordingly, we have significant debt service obligations.



Our high degree of leverage could have important consequences to stockholders including the following: (i) our ability to obtain additional financing
for working capital, capital expenditures, future acquisitions (if any) and general corporate or other purposes may be impaired, or any such financing may not be on terms favorable to us; (ii) a substantial portion of our cash flow available from
operations and investments after satisfying certain liabilities arising in the ordinary course of business will be dedicated to the payment of principal and interest on our indebtedness, thereby reducing funds that would otherwise be available to
us; (iii) a substantial decrease in net operating cash flow or an increase in our expenses could make it difficult for us to meet our debt service requirements or force us to modify our operations; (iv) high leverage may place us at a competitive
disadvantage and may make us vulnerable to a downturn in our business or the economy generally; and (v) because a portion of our borrowings may be at variable rates of interest, we may be exposed to risks inherent in interest rate fluctuations. As
of December 31, 2003, $2.5 billion of our indebtedness was subject to variable interest rates.



Our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness and to satisfy our other debt obligations will depend on our future performance, which to a certain
extent will be subject to economic, financial, competitive and other factors beyond our control. Despite our successful efforts to amend our credit facilities, 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. Continuing 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.



Risks Relating to Dilution of Our Common Stock



The series A and series B preferred stock are ultimately convertible, at the holders option, into a number of shares of Wyndham class A common stock
equal to $100.00 divided by the conversion price, initially equal to $8.59 but subject to potential downward adjustments.



Our credit facility, as amended, prohibits us from paying the cash portion of the preferred dividend until expiration or further amendment of our credit
facility. Under the terms of our preferred stock, if cash dividends are in arrears and unpaid for a period of 60 days or more, then an additional amount of dividends accrue at a rate per annum of 2.0% of the stated amount of each share of preferred
stock then outstanding from the last payment date on which cash dividends were to be paid in full until all cash dividends in arrears have been paid in full. Such additional dividends are cumulative and payable in additional shares of preferred
stock. As of December 31, 2003, we had issued an additional stock dividend of 637,652 shares of series A and series B preferred stock with a value of $63.8 million because cash dividends totaling $73.1 million on the preferred stock had been in
arrears and unpaid for a period of more than 60 days. As of December 31, 2003, the series A and series B preferred stock on an as converted basis would equate to 167.9 million shares of class A common stock using an $8.59 conversion
price. The non-payment of the cash portion of the series A and series B preferred stock dividend is dilutive to the current holders of class A common stock. There can be no assurance that additional shares of series A and series B preferred stock
will not be issued in the future.



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EXECUTIVE OFFICERS OF THE REGISTRANT



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



Fred J. Kleisner is the Chairman of the Board and Chief Executive Officer. He has served as Chairman of the Board since October 13, 2000 and as
Chief Executive Officer since March 27, 2000. From July 1999 to October 2000, Mr. Kleisner served as President. From July 1999 to March 2000, Mr. Kleisner also served as 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. Hotel Group. 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 59 years old.



Ted Tengjoined us in May 2000 as Chief Operating Officer. He assumed
the additional title of President in October 2000. He oversees our core branded hotel productsWyndham Hotels & Resorts®, Wyndham Luxury Resorts® and Summerfield Suites by Wyndham Hotelsas well as the Performance Hospitality Management division and the Asset Management division. His responsibilities also include sales and
marketing, human resources, information technology 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 48
years old.



Mark A. Solls became our Executive Vice
President, General Counsel and Secretary in September 2002. He previously served as Vice President, General Counsel and Secretary with Dal-Tile International, Inc. from 1998 to 2002. Prior to Dal-Tile, Mr. Solls served as Vice President, General
Counsel and Secretary for Pronet Inc. from 1993 to 1997. Mr. Solls obtained his B.A. in Finance from the University of Illinois and his law degree from Southern Illinois University. Mr. Solls is 47 years old.



Richard A. Smith was named Executive Vice President and Chief
Financial Officer in April 2000 and is responsible for finance strategy and operations. Mr. Smith joined us 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 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 41 years old.



Andrew Jordan became our Executive Vice President, Chief Marketing
Officer in April 2003 and oversees the operations of the sales, revenue management, marketing and corporate communications departments. Mr. Jordan joined Wyndham in 1998 as Senior Vice President of Marketing, responsible for positioning Wyndham
as a leading, upscale hotel brand in North America. He previously served as President of U.S. Sales and Marketing for Club Med. Prior to that, he was part of the global marketing team for The Coca-Cola Company in Atlanta, and spent the prior ten
years with major advertising agencies in New York, including Lowe & Partners, Wells Rich Green and Ogilvy & Mather. Mr. Jordan received his masters degree from New York University and undergraduate degree from the University of Texas
in Austin. Mr. Jordan is 41 years old.



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Joseph Champ became our Executive Vice President, Business Development and Chief Investment
Officer in March 2001. He previously served as Senior Vice President, Acquisitions and Development with Starwood Hotels & Resorts from 1998 to 2001. Before these positions, Mr. Champ served as Vice President, Development with Westin Hotels from
1997 to 1998. Mr. Champ obtained his B.A. from Middlebury College and M.B.A. from J. L. Kellogg School of Management at Northwestern University. Mr. Champ is 46 years old.



Michael A. Grossman has served as Executive Vice President and divisional President of the management services
division 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 51 years old.



Donna DeBerry was promoted to Executive Vice President of Diversity and Corporate Affairs in February 2004. A national and international leader in
the field of diversity, Ms. DeBerrys work impacts the careers of more than 22,000 Wyndham associates around the globe. Recognizing the tangible, bottom-line benefits of diversity, Ms. DeBerry implements best practices and new initiatives that
make diversity a key component of the corporate culture and the fabric of the Company. Because of her success in all dimensions of diversity and her activism for people, she is now the highest ranking African American in the hotel industry. Prior to
her current role, she laid the foundation for her work as Wyndhams Director of National Sales for the Emerging Markets, shaping long-term relationships between the Company and the nations largest diverse organizations. Before joining
Wyndham she learned leadership skills and the spirit of winning from working with the National Football League and the United States Olympic Committee. Donna DeBerry attended California State UniversityHayward. Ms. DeBerry is 48 years old.



Patricia Smith is Executive Vice President of Human
Resources and is responsible for leading the entire human resources team, who supports and provides services for Wyndhams 22,000 employees. Specific human resource functions under Ms. Smiths leadership include human resource operations;
staffing and talent acquisition; compensation and benefits; labor and employee relations; organization development; training; and employee communications. Ms. Smith is also responsible for a network of regional human resource offices across North
America and the Caribbean, and works closely on the Companys diversity initiative. Ms. Smith joined Wyndham in 2000 as the Vice President of Organization Development and Training, responsible for organization development, training, diversity,
and employee communications. She was promoted to Senior Vice President of Human Resources in March, 2003. Prior to Wyndham, she was the director of strategy implementation and a senior consultant with Wilson Learning Corporation in Longwood, Fla.
Ms. Smith received her Practical Nursing Certificate from Orange County School of Nursing in Orlando before moving on to receive an A.A. in Journalism from Valencia Community College in Florida, a B.A. in Communications from Rollins College in
Florida, a B.S. in Metaphysics from the American Institute of Holistic Theology in Ohio, and a M.S. in Career and Human Resource Development from Rochester Institute of Technology in New York. Ms. Smith is 44 years old.



ITEM 3. LEGAL PROCEEDINGS



On May
7, 1999, Doris Johnson and Charles Dougherty filed a lawsuit in the Northern District of California against Patriot, Wyndham, their respective operating partnerships and PaineWebber 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 seeks unspecified damages and further alleges that defendants continued to defraud shareholders about their
intentions to acquire numerous hotels and saddle the company 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



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Hospitality, Inc., et al., No. C-99-2239 (filed May 14, 1999), (ii) Sola v. PaineWebber 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. On or about August 15, 2001, the court granted Defendants motions to dismiss the action, dismissing some of the claims with
prejudice and granting leave to replead certain other claims in the Complaint. On or about October 15, 2001, plaintiff filed an amended complaint seeking substantially the same relief as in the original complaint. On or about December 20, 2001,
the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the court granted in part and denied in part Defendants motion to dismiss. The Court did not dismiss certain of Plaintiffs claims under Section 11 of the
Securities Act of 1933 and Section 12(b) of the Securities Exchange Act of 1934. An answer to the complaint has been filed. No discovery has been taken yet and the Court has not yet certified a class. We intend to defend the suits vigorously. These
suits may not be resolved for a number of years and it is not possible to predict the ultimate cost to us.



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, 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 the company. The complaint sought unspecified damages and was filed on behalf of all shareholders who purchased Patriot American and 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 pretrial purposes. On or about October 20, 2000, the defendants moved to dismiss the actions. On or about August
15, 2001, the court granted Defendants motions to dismiss the action, dismissing some of the claims with prejudice and granting leave to replead certain other claims in the Complaint. On or about October 15, 2001, plaintiff filed an amended
complaint seeking substantially the same relief as in the original complaint. On or about December 20, 2001, the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the court dismissed in its entirety the complaint and
granted plaintiffs leave to amend. On or about December 2, 2002, Plaintiffs filed an amended complaint. No discovery has been taken yet and the Court has not yet certified a class. We have entered into a memorandum of understanding with class
counsel to settle the litigation. The memorandum of understanding is subject to definitive documentation and court approval. Pursuant to the memorandum of understanding, we shall pay $2.5 million in cash when an order is entered by the court
preliminarily approving the proposed settlement and an additional $2.5 million on or before the second anniversary of the final court approval. As of December 31, 2003, we have established an adequate reserve to cover the cost of the
settlement.



On May 29, 2002, the State of Florida Office of
the Attorney General Department of Legal Affairs filed a lawsuit in Leon County, Florida (Case No. 02-CA-1296) naming us, Patriot and four current or former Wyndham employees as defendants. In this case, the Attorney General alleged that the
imposition of energy surcharges, resort fees and automatic service fees violates the States Deceptive and Unfair Trade Practices Act. We filed a motion to dismiss this suit which was granted in part and the individual defendants were
dismissed. The Attorney General has appealed the dismissal of the individual defendants. We intend to vigorously defend this lawsuit and have opposed the appeal. Discovery is on-going. This suit may not be resolved for a number of years and it is
not possible to predict the ultimate cost to us.



19



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##### Index to Financial Statements

On June 20, 2002, plaintiffs in the case entitled Roller-Edelstein, et al. v. Wyndham International,
Inc., et al., filed an amended complaint in Dallas County District Court (case no. 02-04946-A) alleging that supplemental fees charged to hotel guests constituted common law fraud, breach of contract and violated Texas Deceptive Trade
Practices Act. The plaintiffs claim to represent a nationwide class and have estimated damages in excess of $10 million. We have answered this complaint, but no formal discovery has been taken yet and the court has not yet certified a class. We
anticipate vigorously defending this lawsuit. This suit may not be resolved for a number of years and it is not possible to predict the ultimate cost to us.



On February 18, 2003, a lawsuit was filed in the Superior Court of California, San Diego County, by Joseph Lopez and Alberto Jose Martinez, on behalf of
themselves and all others similarly situated, against Wyndham International, Inc., et al alleging that we violated certain provisions of the California Labor Code and the California Business and Professions Code concerning wage and hour
requirements. The plaintiffs claim to represent a class. The plaintiffs also allege we breached a fiduciary duty to them and the other class members by seeking to take undue advantage of them by failing to pay them appropriate wages. The plaintiffs
seek compensatory and punitive damages on behalf of themselves and the class in an unspecified amount for all causes of action. An answer to the complaint has been filed and discovery has commenced. The parties conducted an early mediation of this
matter and have agreed to the terms of a settlement, which will require court approval. The settlement would require us to pay $2.5 million to the plaintiffs. As of December 31, 2003, we have adequate reserves to cover the amount. We anticipate
concluding the settlement process during the first half of 2004.



On or about June 8, 2003, the Massachusetts Office of the Attorney General notified Wyndham that a complaint had been filed with its Fair Labor and Practices Division against Wyndhams Westborough, Massachusetts location. According to
the Office of the Attorney General, the complaint alleged that Wyndham-Westborough had violated certain provisions of Massachusetts wage payment laws (Massachusetts General Statutes c. 149, § 152A) by failing to remit to its employees all
amounts owed by statute. On or about January 2, 2004, Wyndham received notice of a second Attorney General complaint also alleging a violation of c. 149, § 152A, this time with respect to all of Wyndhams Massachusetts hotels.
Although we intend to vigorously defend against these complaints, we have nevertheless fully cooperated with the Attorney Generals office by providing it with documents and other information in hopes of quickly resolving these matters. Because
the Office of the Attorney General does not disclose information regarding complaints made to it, it remains unclear exactly who the complainants are, how many complainants are involved, and what the complaints allege. As such, it is impossible at
this time to determine the exposure Wyndham could face in these matters.



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



No matters were submitted during the fourth quarter of 2003 to a vote of our stockholders, through the solicitation of proxies or otherwise.



20



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##### Index to Financial Statements

PART II



ITEM 5. MARKET 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 of our class A common stock as reported on
the American Stock Exchange (symbol WBR) from October 15, 2002 to December 31, 2003 and on the New York Stock Exchange (symbol WYN) from January 1, 2002 to October 14, 2002.



|               |  |      |      |     |   |                   |  |  
|-------------- |  | ---- | ---- | --- | - | ----------------- |  | -
|               |  | High |      | Low |   | Per ShareDividend
|2002:          |  |      |      |     |   |                   |  |  
|First Quarter  |  | $    | 1.00 |     | $ | .50               |  | 
|Second Quarter |  | $    | 1.35 |     | $ | .79               |  | 
|Third Quarter  |  | $    | 1.12 |     | $ | .29               |  | 
|Fourth Quarter |  | $    | .42  |     | $ | .23               |  | 
|2003:          |  |      |      |     |   |                   |  |  
|First Quarter  |  | $    | .30  |     | $ | .15               |  | 
|Second Quarter |  | $    | .76  |     | $ | .17               |  | 
|Third Quarter  |  | $    | .75  |     | $ | .35               |  | 
|Fourth Quarter |  | $    | .87  |     | $ | .54               |  | 



Holders



As of March 1, 2004, there were approximately 1,896 record holders of our
class A common stock, including shares held in street name by nominees who are record holders, and approximately 26,273 stockholders.



Dividends



We do not anticipate paying a dividend to our common stockholders and we are prohibited under the terms of our senior credit facility and increasing rate
loans facility from paying dividends on our class A common stock. For the six year period beginning September 30, 1999, dividends on our series A and series B preferred stock are payable partly in cash and partly in additional shares of our series A
and series B preferred stock, with the cash portion aggregating $29.25 million per year, so long as there is no redemption or conversion of our series A and series B preferred stock. For the following four years, dividends are payable in cash or
additional shares of our series A or series B preferred stock, as the case may be, as determined by our board of directors. After year ten, dividends are payable solely in cash.



We are prohibited under the terms of the January 24, 2002 amendments to the senior credit facility and increasing rate loans
facility from paying cash dividends on the series A and series B preferred stock. As of December 31, 2003, we have deferred payments of the cash portion of the preferred stock dividend totaling approximately $73.1 million. This amount has been
included in accounts payable and accrued expenses as of December 31, 2003. In addition, according to the terms of our series A and series B preferred stock, if the cash dividends on the preferred stock are in arrears and unpaid for at least 60
days, then an additional amount of dividends will accrue at an annual rate of 2.0% of the stated amount of each share of preferred stock then outstanding from the last payment date on which cash dividends were to be paid in full until the cash
dividends in arrears have been paid in full. These additional dividends are cumulative and payable in additional shares of preferred stock. As of December 31, 2003, we have issued an additional stock dividend of 637,652 shares of series A and series
B preferred stock with a value of $63.8 million.



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##### Index to Financial Statements

Shares Authorized for Issuance Under Equity Compensation Plans



Please see Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters under Item 12 of this Form 10-K for information regarding shares authorized for issuance under our equity compensation plans.



Recent Sales of Unregistered Securities



None



ITEM 6. SELECTED FINANCIAL INFORMATION



The following tables set forth selected condensed consolidated historical financial information. This financial information should be read in conjunction with, and is qualified in its entirety by, our historical financial statements and
notes thereto included elsewhere in this Annual Report on Form 10-K. Our selected financial and other data for 2003, 2002, 2001, 2000 and 1999 have been derived from our consolidated financial statements. Certain prior year balances have been
reclassified to conform to the current year presentation with no effect on previously reported amounts of income or retained earnings.



WYNDHAM INTERNATIONAL, INC.



Selected Condensed Consolidated Historical Financial Data



|                                                                           |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|-------------------------------------------------------------------------- |  | ------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ---- | --------- | - |  | - | ---------- | -
|                                                                           |  | Year Ended December 31,               |          
|                                                                           |  | 2003                                  |           |   | 2002 |   |           | 2001 |  |   | 2000      |   |  | 1999 |          
|                                                                           |  | (in thousands, except per share data) |          
|Operating Data:                                                            |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Total revenue                                                              |  | $                                     | 1,277,550 |   |      | $ | 1,351,800 |      |  | $ | 1,481,146 |   |  | $    | 1,811,025 |   |  | $ | 1,869,449  |  
|Loss from continuing operations before income taxes and minority interests |  |                                       | (191,109  | ) |      |   | (241,143  | )    |  |   | (256,566  | ) |  |      | (593,473  | ) |  |   | (627,064   | )
|Loss from continuing operations                                            |  |                                       | (151,736  | ) |      |   | (143,841  | )    |  |   | (152,763  | ) |  |      | (368,884  | ) |  |   | (1,151,148 | )
|(Loss) income from discontinued operations                                 |  |                                       | (237,876  | ) |      |   | (54,483   | )    |  |   | 24,188    |   |  |      | 44,213    |   |  |   | 79,179     |  
|Loss before accounting change                                              |  |                                       | (389,612  | ) |      |   | (198,324  | )    |  |   | (128,575  | ) |  |      | (324,671  | ) |  |   | (1,071,969 | )
|Net loss                                                                   |  | $                                     | (389,612  | ) |      | $ | (522,426  | )    |  | $ | (138,940  | ) |  | $    | (324,671  | ) |  | $ | (1,071,969 | )
|Per Share Data (1):                                                        |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Basic loss per common share:                                               |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Loss from continuing operations                                            |  | $                                     | (1.83     | ) |      | $ | (1.72     | )    |  | $ | (1.64     | ) |  | $    | (2.82     | ) |  | $ | (7.57      | )
|(Loss) income from discontinued operations, net of taxes                   |  |                                       | (1.41     | ) |      |   | (0.32     | )    |  |   | 0.14      |   |  |      | 0.26      |   |  |   | 0.49       |  
|Accounting change, net of taxes                                            |  |                                       |          |   |      |   | (1.93     | )    |  |   | (.06      | ) |  |      |          |   |  |   |           |  
|                                                                           |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Net loss per common share                                                  |  | $                                     | (3.24     | ) |      | $ | (3.97     | )    |  | $ | (1.56     | ) |  | $    | (2.56     | ) |  | $ | (7.08      | )
|                                                                           |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Diluted loss per common share (2), (3)                                     |  | $                                     | (3.24     | ) |      | $ | (3.97     | )    |  | $ | (1.56     | ) |  | $    | (2.56     | ) |  | $ | (7.20      | )
|                                                                           |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Cash Flow Data:                                                            |  |                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |            |  
|Cash provided by operating activities                                      |  | $                                     | 62,609    |   |      | $ | 76,508    |      |  | $ | 158,359   |   |  | $    | 246,838   |   |  | $ | 202,302    |  
|Cash provided by (used in) investing activities                            |  |                                       | 137,197   |   |      |   | 425,692   |      |  |   | (63,427   | ) |  |      | 37,272    |   |  |   | (356,564   | )
|Cash (used in) provided by financing activities                            |  |                                       | (174,601  | ) |      |   | (630,972  | )    |  |   | 18,134    |   |  |      | (383,397  | ) |  |   | 181,889    |  



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##### Index to Financial Statements

|                                                                |  |                         |           |   |      |   |           |      |  |      |           |  |      |           |   |  |   |           |  
|--------------------------------------------------------------- |  | ----------------------- | --------- | - | ---- | - | --------- | ---- |  | ---- | --------- |  | ---- | --------- | - |  | - | --------- | -
|                                                                |  | As of December 31,      |          
|                                                                |  | 2003                    |           |   | 2002 |   |           | 2001 |  | 2000 |           |  | 1999 |          
|                                                                |  | (in thousands)          |          
|Balance Sheet Data:                                             |  |                         |           |   |      |   |           |      |  |      |           |  |      |           |   |  |   |           |  
|Investment in real estate and related improvements at cost, net |  | $                       | 2,938,808 |   |      | $ | 3,611,456 |      |  | $    | 4,399,256 |  | $    | 3,515,223 |   |  | $ | 5,413,178 |  
|Total assets                                                    |  |                         | 3,783,127 |   |      |   | 4,473,458 |      |  |      | 5,769,953 |  |      | 6,066,899 |   |  |   | 7,003,490 |  
|Total debt                                                      |  |                         | 2,681,959 |   |      |   | 2,826,543 |      |  |      | 3,445,995 |  |      | 3,398,950 |   |  |   | 3,643,556 |  
|Minority interest in Operating Partnerships                     |  |                         | 21,289    |   |      |   | 21,368    |      |  |      | 21,416    |  |      | 21,416    |   |  |   | 22,435    |  
|Minority interest in other consolidated Subsidiaries            |  |                         | 39,981    |   |      |   | 38,518    |      |  |      | 91,657    |  |      | 164,906   |   |  |   | 166,483   |  
|Shareholders equity                                            |  |                         | 650,073   |   |      |   | 1,062,379 |      |  |      | 1,588,221 |  |      | 1,794,187 |   |  |   | 2,137,662 |  
|                                                                | 
|                                                                |  | Year Ended December 31, |          
|                                                                |  | 2003                    |           |   | 2002 |   |           | 2001 |  | 2000 |           |  | 1999 |          
|                                                                |  | (in thousands)          |          
|Other Data:                                                     |  |                         |           |   |      |   |           |      |  |      |           |  |      |           |   |  |   |           |  
|Weighted average number of common shares outstanding            |  |                         | 168,128   |   |      |   | 167,943   |      |  |      | 167,698   |  |      | 167,308   |   |  |   | 161,255   |  
|Ratio of (losses) earnings to fixed charges                     |  |                         | (0.04     | ) |      |   | (0.14     | )    |  |      | 0.08      |  |      | (0.76     | ) |  |   | (0.80     | )
|Deficiency of earnings to fixed charges                         |  |                         | 191,109   |   |      |   | 241,143   |      |  |      | 256,566   |  |      | 593,473   |   |  |   | 617,226   |  



Notes to Selected Financial
Information



|(1) | When we refer to our basic earnings per share, diluted earnings per share, dividends per share, and weighted average number of shares outstanding, we have adjusted these amounts to
reflect our June 30, 1999 restructuring pursuant to which, among other things, each outstanding paired share was converted into one share of our class A common stock.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For 2003, we did not include in our computation of diluted earnings per share the effect of unvested stock grants of 13,241,106 and 167,906,293 shares of our series A and series B
preferred stock because they are anti-dilutive. For 2002, we did not include in our computation of diluted earnings per share the effect of unvested stock grants of 13,708,395, and 153,325,020 shares of our series A and series B preferred stock
because they are anti-dilutive. For 2001, we did not include in our computation of diluted earnings per share the dilutive effect of unvested stock grants of 4,613,000 and 138,592,000 shares of our series A and series B preferred stock because they
are anti-dilutive. For 2000, we did not include in our computation of diluted earnings per share the dilutive effect of unvested stock grants of 645,000, the option to purchase 104,000 shares of our class A common stock and 129,073,000 shares of our
series A and series B preferred stock because they are anti-dilutive. For 1999, we did not include in our computation of diluted earnings per share the dilutive effect of unvested stock grants of 825,000, the option to purchase 59,000 shares of our
class A common stock and 60,213,000 shares of our series A and series B preferred stock because they are anti-dilutive.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | For 2003, we did not include in our computation of diluted earnings per share outstanding options to purchase 13,075,199 shares of our class A common stock at
prices ranging from $0.48 to $30.40 because they are anti-dilutive. For 2002, we did not include in our computation of diluted earnings per share outstanding options to purchase 13,136,272 shares of our class A common stock at prices ranging from
$0.85 to $30.40 because they are anti-dilutive. For 2001, we did not include in our computation of diluted earnings per share outstanding options to purchase 14,041,000 shares of our class A common stock at prices ranging from $1.75 to $30.40
because the options exercise prices were greater than the average market price of our class A common shares and, therefore, the effect would be anti-dilutive. For 2000, we did not
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Index to Financial Statements

| | include in our computation of diluted earnings per share outstanding options to purchase 12,157,000 shares of our class A common stock at prices ranging from
$2.0625 to $30.40 because they are anti-dilutive. For 1999, we did not include in our computation of diluted earnings per share outstanding options to purchase 9,702,000 shares of our class A common stock at prices ranging from $4.75 to $30.40
because they are anti-dilutive.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Background



Organization



Through a series of mergers and acquisitions, we have grown substantially
since our inception in 1995. Patriot American Hospitality, Inc., or Patriot, was formed on April 17, 1995 as a self-administered real estate investment trust, or REIT, to acquire equity interests in hotel properties. On October 2, 1995, Patriot
completed an initial public offering of its common stock and commenced its operations.



On July 1, 1997, Patriot merged into California Jockey Club, or Cal Jockey. As part of this merger, Cal Jockey and Bay Meadows Operating Company, or Bay Meadows, entered into a paired share arrangement under which
both of their common stocks were paired and traded together. Also, Cal Jockey changed its name to Patriot, and Bay Meadows changed its name to Patriot American Hospitality Operating Company.



In January 1998, Wyndham Hotel Corporation merged into Patriot and, as part
of that merger, Patriot American Hospitality Operating Company changed its name to Wyndham International, Inc. We will refer to Wyndham International, Inc. as it existed before June 30, 1999 as old Wyndham. Patriot and old
Wyndham grew primarily by acquiring hotels and other related businesses. They financed these acquisitions with funds drawn on their revolving credit facilities and capital raised by issuing paired shares and by having their two operating
partnerships issue limited partnership interests.



On June 30,
1999, we restructured our organization. As part of this restructuring:



| |  | Patriot became a wholly-owned subsidiary of ours;
| | - | -------------------------------------------------



| |  | we and Patriot terminated the paired share arrangement;
| | - | -------------------------------------------------------



| |  | each outstanding paired share was converted into one share of our class A common stock; and
| | - | -------------------------------------------------------------------------------------------



| |  | Patriot terminated its status as a REIT effective January 1, 1999 and became a taxable corporation as of that date.
| | - | -------------------------------------------------------------------------------------------------------------------



Also on June 30, 1999, we completed a $1 billion series B preferred stock
equity investment, closed a new credit facility (comprised of a senior credit facility and an increasing rate loan facility), which has since been amended and restated, and closed on additional mortgage debt. Holders of our series B preferred stock
are entitled to a quarterly dividend on a cumulative basis at a rate of 9.75% per year of which a portion is payable in additional shares of our series B preferred stock. Our series B preferred stock is convertible, at the holders option, into
shares of our class B common stock. Also in 1999, we completed a rights offering of our series A preferred stock, which, except for voting rights, has substantially similar terms to our series B preferred stock. We used the proceeds of our series A
preferred stock offering to redeem some of our series B preferred stock.



Our credit facility prohibits us from paying the cash portion of the preferred dividend until expiration or further amendment of our credit facility. Under the terms of our preferred stock, if cash dividends are in
arrears and unpaid for a period of 60 days or more, an additional amount of dividends accrue at a rate per annum of 2.0% of the stated amount of each share of preferred stock then outstanding from the last payment date on which cash dividends were
to be paid in full until all cash dividends in arrears have been paid in full. Such additional



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##### Index to Financial Statements

dividends are cumulative and payable in additional shares of preferred stock. As of December 31, 2003, we had issued an additional stock dividend of 637,652
shares of series A and series B preferred stock with a value of $63.8 million because cash dividends totaling $73.1 million on the preferred stock had been in arrears and unpaid for a period of more than 60 days.



Over the past several years we have sold, and we currently intend to continue
to sell all of our non-strategic, non-convertible assets. These are properties that do not fit our proprietary brand profile because of the quality of the asset or the fact that it is encumbered by a long-term licensing agreement with a non-Wyndham
brand. By disposing of these assets, we will be able to focus solely on being a branded operating company, as well as reduce a portion of our debt with the net proceeds from these asset sales. Since implementing this plan in June of 1999, we have
sold 129 assets with gross proceeds of approximately $1.85 billion. We have 24 non-strategic assets remaining to be sold. These assets will be held until such time as the sales price meets or exceeds managements assessment of their fair value.



In 2001, we sold or exchanged the following assets:



| |  | two hotels and a sewer company, in separate transactions for aggregate net cash proceeds of approximately $8.6 million, after we repaid approximately $21.8 million of debt;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | one hotel in which we retained a preferred equity interest for net cash proceeds of approximately $19.7 million;
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | three hotels and investments in four additional hotels in a single transaction for net cash proceeds of approximately $58.7 million; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | six hotels, which were exchanged for one hotel.
| | - | -----------------------------------------------



In 2002, we sold the following assets:



| |  | seven hotels and an investment in a restaurant venture, in separate transactions for aggregate net cash proceeds of approximately $60.1 million, after we repaid approximately $65.7
million of debt. Also, $38.7 million of the net cash proceeds from the sale of the assets was used by us to pay down a portion of our senior credit facility and increasing rate loans facility; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | thirteen hotels in a single transaction for net cash proceeds of approximately $202.5 million, after we repaid approximately $224.1 million of debt and placed $36.1 million in
escrow under the terms of our senior credit facility for application by us in the future to make payments on existing mortgage indebtedness. Also, $127.6 million of the net cash proceeds from the sale of the assets was used by us to pay down a
portion of our senior credit facility and increasing rate loans facility. As of December 31, 2003, $10.3 million of the $36.1 million has been applied in payment of existing mortgage indebtedness.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In 2003, we sold or terminated leases for the following assets:



| |  | eighteen hotels, two parcels of undeveloped land and a golf venture in separate transactions for aggregate net cash proceeds of approximately $107.4 million, after the repayment of
mortgage debt of approximately $114.9 million. Also, $68.3 million of the net cash proceeds was used by us to pay down a portion of the senior credit facility and increasing rate loan facility, and we retained the rest of the net cash proceeds in
accordance with the terms of the senior credit facilities; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Hospitality Properties Trust (HPT) terminated leases on 27 hotel properties (15 Summerfield Suites by Wyndham and 12 Wyndham Hotels and Wyndham Garden Hotels) operated by two of our subsidiaries.
HPT rebranded 14 Summerfield Suites by Wyndham to
a third-party brand on October 6, 2003, and one property remains a Summerfield Suite pursuant to a franchise agreement with HPT. Under a final settlement agreement, the 12 Wyndham Hotels and Wyndham Garden Hotels will be rebranded to a third-party
brand by the end of 2004. On an annualized basis, based upon projections for the calendar year 2003, the estimated positive impact on cash flow of the lease terminations to our
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Index to Financial Statements

| | subsidiaries is $14.3 million. For the year ended December 31, 2003, the terminations resulted in a non-cash write-off of approximately $153.9 million for
the leases remaining book value.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During 2004 to date, we have sold our investments in nine hotel entities in three separate transactions for net cash proceeds of $45.6 million after payment of $96.5 million of mortgage debt. We used $34.8 million of the net cash proceeds
to pay down a portion of the senior credit facility and increasing rate loan facility, and retained the rest of the net cash proceeds in accordance with the terms of the senior credit facilities.



In March 2004, the leases on six Summerfield Suites by Wyndham
properties were terminated and the properties were converted to long-term franchises. Assets of approximately $22 million, which represented the leases remaining book value, were considered impaired and written-off as of December 31, 2003.



We continue to sell our non-strategic assets to reduce debt.
At December 31, 2003, we had approximately $238.3 million of assets classified as held for sale, net of impairment. We classify certain assets as held for sale based on our management having the authority and intent of entering into commitments for
sale transactions expected to close in the next twelve months.



Indebtedness



On March 4, 2003, we entered
into a fourth amendment and restatement of our term loan and revolving credit facility and a third amendment of our increasing rate loans facility. The amendments and restatements include the following:



| |  | an increase in the letter of credit availability under our revolving facility from $75 million to $90 million;
| | - | --------------------------------------------------------------------------------------------------------------



| |  | waivers and consents by the lenders to any resolution of issues surrounding certain under-performing properties;
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | extension of the outside date by which we must grant mortgage liens to the lenders on certain excluded properties under the credit facilities; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | authorization to effect certain administrative organizational changes to our corporate structure.
| | - | -------------------------------------------------------------------------------------------------



On May 29, 2003, we entered into a fifth amendment and restatement of our term loan and revolving credit facility and a
fourth amendment of our increasing rate loans facility. The amendments provided for the extension of the maturity dates of our revolving and increasing rate loan facilities held by consenting lenders (previously scheduled to occur on June 30, 2004)
to April 1, 2006 upon the satisfaction of certain conditions, including the principal repayment of $200.2 million of the term and increasing rate facilities before February 29, 2004. On December 9, 2003, we satisfied all conditions precedent
necessary to affect an extension of the consenting lenders maturity dates for the revolving credit facility and the increasing rate loans to April 1, 2006. Loans held by non-consenting lenders totaling approximately $19 million will retain the
original maturity date of June 30, 2004. Pursuant to the terms of the amended credit facilities, we have retained an amount sufficient to satisfy such $19 million debt at maturity from the net cash proceeds of asset sales and refinancings. The
proceeds of asset sales and refinancings were the primary sources of funds for the $200.2 million principal repayment and the $19 million reserve for the June 30, 2004 maturities. In connection with the maturity extensions, the available
commitments under our revolving credit facility have been reduced by $85 million. Over 95% of the revolving and increasing rate lenders voted in favor of the amendments. Also, consenting lenders will receive an increase in interest rate and certain
fees as set forth in the amended credit facilities, including a 2% fee to be paid at maturity based upon the sum of the revolving commitments and outstanding terms loans, if any, as of June 30, 2005.



Pursuant to the terms of the amended credit facilities in effect following
the maturity extensions described above, we may retain some or all of the net cash proceeds from asset sales and refinancings of existing mortgage indebtedness (other than the credit facilities) up to $22.5 million to be used to repay the
non-consenting lenders at the June 2004 original maturity date as long as we maintain a pro forma minimum revolving credit facility



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##### Index to Financial Statements

commitment availability after giving effect to such retention. As of January 15, 2004, we have retained $22.5 million to satisfy the non-consenting
lenders at the June 2004 original maturity date from the net cash proceeds of asset sales and refinancings. We may retain all or any portion of the reserved amount in the event the outstanding balance of the loans held by non-consenting lenders is
less than the reserved amount as of the June 2004 maturity date. Following the retention described above, we will apply net cash proceeds in the following manner: first, the initial $20 million of asset sale proceeds each year may be retained by us,
provided that the second $10 million of the $20 million may be retained only if our liquidity falls below a certain level set forth in the credit facilities; second, subject to certain limitations set forth in the credit facilities including our
maximum liquidity levels, we may elect to retain up to 25% of such net cash proceeds with the balance applied to repay indebtedness under the credit facilities, up to a maximum of $35 million a year; third, to repay scheduled term loan payments;
fourth, after we have retained $35 million in such year, or if we are not permitted to retain a percentage of the asset sale or refinancing proceeds as a result of the limitations set forth in the credit facilities, 100% of such proceeds must be
applied to repay indebtedness under the credit facilities on a pro-rata basis. We also agreed to use 100% of the net cash proceeds from new debt issuances (other than refinancings of existing mortgage indebtedness which will be applied in accordance
with the previous sentence) to reduce outstanding indebtedness under the credit facilities on a pro rata basis.



On June 11, 2003, we completed a $425 million mortgage refinancing secured by 19 hotel properties. The loan was made by affiliates of Lehman Brothers
Holdings Inc., bears interest at the rate set forth in Note 4, footnote 8 to our consolidated financial statements and has an initial maturity date of June 9, 2005. We have the sole discretion to extend the maturity date of the loan to as late
as July 9, 2008. The loan refinanced the two mortgage pools that were scheduled to mature on July 1, 2003 and July 1, 2004, respectively.



On November 6, 2003, we refinanced the Wyndham Condado Plaza mortgage debt totaling $36.5 million as of September 30, 2003, with Lehman Brothers Holdings
Inc. A portion of the excess proceeds received from the Condado refinancing was used to pay down $23.5 million of the senior credit facility and increasing rate loan. The new loan totaling $94.5 million bears interest at LlBOR plus 4.25%, with a 2%
LIBOR floor, and matures on November 6, 2005. The maturity date may be extended, solely at our own option, for three one year periods.



Despite our successful efforts to amend our credit facilities, there can be no assurance that we will be able to continue 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. Continuing 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.



During 2004, we have scheduled principal payments and debt maturities of approximately $292.7 million. Of that amount, we can elect to extend $214.5
million for two additional twelve month periods, and an additional $19 million of debt has been provided for in a restricted cash account. We are seeking to refinance the remaining scheduled principal payments and debt prior to their maturities in
2004; however, there can be no assurance that we will be able to do so.



Results of Operations: Year Ended December 31, 2003 Compared with Year Ended December 31, 2002



Our room revenues were $716.1 million and $750.9 million for the years ended December 31, 2003 and 2002, respectively. Approximately $30.1 million of the
decrease is attributable to those hotels that were sold in 2003. The remaining decrease is attributable to the declining revenues throughout our owned and leased hotel portfolio. While occupancy increased 3.4%, average daily rate, or ADR and revenue
per available room or RevPAR decreased 4.9% and 1.6%, respectively, for the year ended December 31, 2003 as compared to the same period in 2002. This RevPAR decline can be attributed to a reduced demand in the corporate group and commercial retail
segments of our business as a result of the sluggish economy, travelers fears of exposure to contagious diseases and the effects of Operation Iraqi Freedom, offset by increased Wyndham.com bookings and leisure and corporate internet business.



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##### Index to Financial Statements

Our food and beverage revenues were $377.2 million and $394.8 million for the years ended
December 31, 2003 and 2002, respectively. The decrease is primarily attributable to those hotels that were sold in 2003 totaling $16.4 million.



Our other hotel revenues were $160.5 million and $181.4 million for the years ended December 31, 2003 and 2002, respectively. Approximately $3.3 million
of the decrease is attributable to those hotels that were sold in 2003. The remaining decrease is primarily attributable to the decline in communication, change in customer mix which produced less ancillary revenue, other minor operating revenues
and reduced group cancellation revenues throughout our owned and leased hotel portfolio for the year ended December 31, 2003 as compared to the same period in 2002.



Our room expenses were $184.2 million and $189.2 million for the years ended December 30, 2003 and 2002, respectively. Room
expenses decreased by approximately $7.3 million due to hotels that were sold in 2003. This decrease was offset by an increase in our labor, benefit and distribution costs attributable to the 3.4% increase in occupancy for the year ended December
31, 2003 as compared to the same period in 2002.



Our food and
beverage expenses were $261.8 million and $276.8 million for the years ended December 31, 2003 and 2002, respectively. Approximately $12.1 million of the decrease is attributable to those hotels that were sold in 2003. The remaining decrease
consists of reductions in food and beverage product costs, operating supplies and labor costs.



Our other hotel expenses were $520.4 million and $545.6 million for the years ended December 31, 2003 and 2002, respectively. The decrease consists of $21.5 million in other hotel expenses from those hotels that were
sold in 2003 and $3.7 million in reduced expenses consisting of lower insurance costs and other minor operating expenses.



Our management fee and service fee income was $17.5 million and $17.6 million for the years ended December 31, 2003 and 2002, respectively. While our
management fee and service fee income was flat, fees decreased primarily as a result of reductions in hotel revenue upon which the fees are based and the termination of ten contracts subsequent to 2002. The decrease was offset, in part, by 27 new
management and franchise contracts acquired subsequent to December 31, 2002.



Our interest and other income was $6.3 million and $7.1 million for the years ended December 31, 2003 and 2002, respectively. The decrease is mainly attributable to the reductions of our note receivables in 2003 as
compared to the same period in 2002.



Our general and
administrative expenses were $63.1 million and $73.5 million for the years ended December 31, 2003 and 2002, respectively. The decrease is primarily a result of the following: reductions in bonus expenses of $8.2 million, reductions in payroll
costs of $3.1 million, reductions in deferred compensation expenses of $882,000, reductions in legal fees of $414,000, reductions in development and acquisition costs of $2.6 million, reductions in severance costs of $2.9 million and reductions
in management contract costs of $5.6 million. These reductions in general and administrative costs were offset by increases in receivable write-offs of $908,000, increases in directors and officers insurance of $1.6 million, increases in
leasehold termination costs of $522,000, increases in professional fees of $1.1 million, increases in office equipment maintenance and supply costs of $1.7 million, increases in general insurance of $493,000 and litigation settlement accruals
of $6.8 million.



During the year ended December 31, 2002, our
bond offering cancellation costs were $3.8 million. We withdrew the offering of the proposed debt securities due to unfavorable market conditions.



Our interest expense was $183.7 million and $211.4 million for the years ended December 31, 2003 and 2002, respectively. This decrease is a result of a
reduction in the amount of our total debt and lower interest rates. At December 31, 2003 and 2002, we had approximately $2.68 billion and $2.83 billion of debt, respectively. Also, the one-month LIBOR rate was 1.12% and 1.38% as of December 31, 2003
and 2002, respectively, and our weighted average interest rate for the year ended December 31, 2003 was 5.92% as compared to 6.17% for the year ended December 31, 2002.



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##### Index to Financial Statements

Our depreciation and amortization expense was $201.1 million and $213 million for the years ended
December 31, 2003 and 2002, respectively. The decrease in depreciation expense is due to certain assets becoming fully depreciated subsequent to the year ended December 31, 2002.



The benefit for income taxes was $41.1 million and $97.6 million for the years ended December 31, 2003 and 2002,
respectively. The decrease in the tax benefit is due to the recording of a valuation allowance against our deferred tax assets during the year ended December 31, 2003 as compared to same period in 2002. We provide a valuation allowance for deferred
tax assets when it is more likely than not that some portion or all of our deferred tax assets will not be realized. The decrease in our net deferred tax liability is primarily due to operating losses, impairment of assets, sale of assets and
termination of leasehold interests.



Minority interest in
consolidated subsidiaries was $1.7 million and $258,000 for the years ended December 31, 2003 and 2002, respectively. The increase is attributable to better operating results due to lower hotel expenses in the joint venture partnerships.



For the year ended December 31, 2003, we recorded a gain of
$33.3 million as compared to a loss of $27.2 million for the year ended December 31, 2002 for the change in the fair value of the ineffective interest rate hedge contracts. In addition, reductions of $1.2 million (net of taxes of $1.1 million)
and $4.8 million (net of taxes of $3.2 million) were recorded against other comprehensive income for the years ended December 31, 2003 and 2002, respectively, for the change in the fair value of the effective derivatives. Also, during the years
ended December 31, 2003 and 2002, we paid $49.2 million and $41.7 million, respectively, in settlement payments for ineffective hedges. In addition, we recorded amortization of $3.8 million (net of taxes of $2.5 million) and $9.5 million (net
of taxes of $6.3 million) for the years ended December 31, 2003 and 2002, respectively, to earnings as a reduction of the transitional adjustment that was recorded in other comprehensive income in 2001.



Impairment loss was $27.8 million and $162,000 for the years ended December
31, 2003 and 2002, respectively. The impairment loss reflects the write-down of assets held for sale during the year ended December 31, 2003 and a pre-tax charge related to the decline in value of certain equity securities held by us. The decline in
value of the securities was deemed to be other-than-temporary during the year ended December 31, 2003, thus requiring an earnings charge, primarily based on the length of time the securities have traded below cost.



Loss from discontinued operations was $237.9 million and $54.5 million for
the years ended December 31, 2003 and 2002, respectively. The increase in loss is attributable to the increase in impairment charges of $99.8 million; and the write-off of the remaining book value of the terminated HPT leases of $153.9
million. The loss from discontinued operations was offset, in part, by an increase in the gain on sale of assets of $26.8 million and the increase in tax benefits of $43.2 million.



During the year ended December 31, 2002, we recorded a cumulative effect of an accounting change of $324.1 million to
reflect a write-off of goodwill.



Our resulting net loss for
the year ended December 31, 2003 was $389.6 million as compared to a net loss of $522.4 million for the year ended December 31, 2002.



Results of Operations: Year Ended December 31, 2002 Compared with Year Ended December 31, 2001



Our room revenues were $750.9 million and $839.1 million for the years ended December 31, 2002 and 2001, respectively.
Approximately $4.1 million of the decrease is attributable to those hotels that were sold in 2002. The remaining decrease is attributable to the declining revenues throughout our owned and leased hotel portfolio. While occupancy increased 1.2%, ADR
and RevPAR decreased 4.5% and 7.6%, respectively, for the year ended December 31, 2002 as compared to the same period in 2001. This RevPAR decline can be attributed to a reduced demand in the transient and group segments of our business as a result
of the sluggish economy, offset by increased leisure business.



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##### Index to Financial Statements

Our food and beverage revenues were $394.8 million and $416.1 million for the years ended December 31,
2002 and 2001, respectively. Approximately $2.8 million of the decrease is attributable to those hotels that were sold in 2002. The remaining decrease is primarily attributable to decreased banquet and catering revenues in our owned and leased hotel
portfolio for the year ended December 31, 2002 as compared to the same period in 2001.



Our other hotel revenues were $181.4 million and $195.4 million for the years ended December 31, 2002 and 2001, respectively. Approximately $684,000 of the decrease is attributable to those hotels that were sold in
2002. The remaining decrease is primarily attributable to the decline in communication, other minor operating revenues and reduced group cancellation revenues throughout our owned and leased hotel portfolio for the year ended December 31, 2002 as
compared to the same period in 2001.



Our room expenses were
$189.2 million and $200.2 million for the years ended December 30, 2002 and 2001, respectively. Approximately $1.5 million of the decrease was due to hotels that were sold in 2002. The remaining decrease is attributable to staffing reductions at the
hotels and other cost saving initiatives we implemented as our hotel revenues declined.



Our food and beverage expenses were $276.8 million and $295.7 million for the years ended December 31, 2002 and 2001, respectively. The decrease consists of a decrease in food and beverage product costs, operating
supplies and labor costs, that amounted to $16.6 million in our owned and leased portfolio as well as a reduction in costs of $2.3 million from hotels that were sold in 2002.



Our other hotel expenses were $545.6 million and $567.1 million for the years ended December 31, 2002 and 2001,
respectively. Approximately $2.5 million of the decrease was due to hotels that were sold in 2002. The remaining decrease is attributable to lower minor operating expenses and other cost saving initiatives we implemented as our hotel revenues
declined. The decrease was offset, in part, by higher property insurance premiums in 2002.



Our management fee and service fee income was $17.6 million and $20.2 million for the years ended December 31, 2002 and 2001, respectively. The decrease is primarily a result of reductions in hotel revenue upon which
the fees are based and the termination of certain contracts during 2002 and 2001.



Our interest and other income was $7.1 million and $10.3 million for the years ended December 31, 2002 and 2001, respectively. Approximately $543,000 of the decrease in interest income can be attributed to hotels that
were sold in 2002 and 2001. The remaining decrease is attributable to the payment of certain note receivables in 2002.



Our general and administrative expenses were $73.5 million and $95 million for the years ended December 31, 2002 and 2001, respectively. The decrease
is primarily a result of the following: reductions in conversion costs of $11.7 million, reductions in the write-off of receivables deemed not collectible of $5.5 million, reductions of $4.5 million in costs associated with the termination of
management and leasehold contracts, reductions of $5.2 million in reservation and marketing funds not reimbursed by the hotels and reductions of $6.6 million in severance costs. These reductions were offset in 2002, in part, by increases in
debt restructuring costs of $1.5 million, an increase in bonus accruals of $7.5 million, an increase in deferred compensation expenses of $1.3 million and an increase in office equipment maintenance and supply expenses of $2.2 million.



During the year ended December 31, 2002, our bond offering cancellation
costs were $3.8 million. We withdrew a proposed offering of debt securities during the second quarter of 2002 due to unfavorable market conditions.



Our interest expense was $211.3 million and $276.2 million for the years ended December 31, 2002 and 2001, respectively. This decrease is primarily a
result of a reduction in the amount of our total debt. At December 31, 2002 and 2001, we had approximately $2.8 billion and $3.4 billion of debt, respectively. Also, the one-month LIBOR rate was 1.38% and 1.87% as of December 31, 2002 and 2001,
respectively, and the weighted average interest rate for 2002 was 6.17% as compared to 7.37% for 2001.



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##### Index to Financial Statements

Our depreciation and amortization expense was $213 million and $208 million for the years ended December
31, 2002 and 2001, respectively. During the fourth quarter of 2001, we transferred back to held for use certain assets that were previously held for sale thus increasing depreciation expense for the year ended December 31, 2002 by $47.5 million.
This increase was offset by our adopting of SFAS 142 during the first quarter of 2002 which impaired our goodwill by $324.1 million thus reducing amortization expense by $12.1 million for the year ended December 31, 2002. In addition,
depreciation expense was reduced by $9.8 million due to asset sales in 2002.



During the year ended December 31, 2001, we classified five assets as held for sale based on our 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, we recorded a reserve for impairment for loss on real estate assets held for sale of $16.3 million in 2001. The provision reduced the carrying value of the owned hotels to the estimated
net sales proceeds less estimated costs to sell. Also, during 2001, we recorded a reserve for impairment on three assets held for use of $7.9 million.



The benefit for income taxes was $97.6 million and $110.5 million for the years ended December 31, 2002 and 2001, respectively. The decrease is, in part,
due to the reduction in operating losses. This was offset, in part, by depreciation of certain assets that were previously held for sale during the year ended December 31, 2001, resulting in differences in general accepted accounting principle, or
GAAP, and tax depreciation.



Minority interests share of
income in consolidated subsidiaries was $258,000 and $6.7 million for the years ended December 31, 2002 and 2001, respectively. Approximately $3.3 million of the decrease in minority interest is attributable to those hotels that were sold in 2002
and 2001. In addition, the decrease in the allocation of income used in the computation of minority interest was due to depreciation expense now being recorded for assets previously held for sale in 2001 and due to lower operating income.



We recorded losses of $27.2 million and $32.3 million for the
years ended December 31, 2002 and 2001, respectively, for the change in the fair market value of the ineffective interest rate hedge contracts. In addition, a reduction of $4.8 million (net of taxes of $3.2 million) and a charge of $6.6 million (net
of taxes of $4.4 million) were recorded against other comprehensive income as of December 31, 2002 and 2001, respectively, for the change in the fair value of the effective derivatives. Also, during the years ended December 31, 2002 and 2001, we
paid $41.7 million and $15.4 million respectively, in settlement payments for ineffective hedges. In addition, we recorded amortization of $9.5 million (net of taxes of $6.3 million) and $9.7 million (net of taxes of $6.4 million) for the years
ended December 31, 2002 and 2001, respectively, to earnings as a reduction of the transitional adjustment that was recorded in other comprehensive income in 2001.



The loss from discontinued operations was $54.5 million for the year ended December 31, 2002 and the income from
discontinued operations was $24.2 million for the year ended December 31, 2001. The decrease in income is attributable to the increase in loss from operations of $69.1 million, impairment charges of $37.8 million and losses on the sale of
assets of $17.3 million. The loss from discontinued operations was offset, by an increase in tax benefit of $45.6 million.



During the year ended December 31, 2002, we recorded a cumulative effect of an accounting change of $324.1 million to reflect a write-off of goodwill. In
2001, $10.4 million (net of taxes of $6.9 million) was recorded to reflect an adjustment to the derivative financial instruments.



Our resulting net loss for the year ended December 31, 2002 was $522.4 million compared to a net loss of $138.9 million for the year ended December 31,
2001.



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##### Index to Financial Statements

Results of Reporting Segments



Our results of operations are classified into three reportable segments: (1) Wyndham branded hotel properties, (2)
non-proprietary branded hotel properties and (3) other.



For
the year ended December 31, 2003 compared with the year ended December 31, 2002



Wyndham branded properties include Wyndham Hotels & Resorts®, Wyndham Luxury Resorts®, Wyndham Garden Hotels® and Summerfield Suites by Wyndham. This segment represented approximately 86.7% and 83.8% of our total revenues for the years ended December 31, 2003 and 2002, respectively. Total revenue for this segment was $1.11 billion compared to $1.13 billion for
the years ended December 31, 2003 and 2002, respectively. Operating income for this segment was $260.8 million compared to $276.8 million for the years ended December 31, 2003 and 2002, respectively. Decreases in revenue and operating income for
this segment can be primarily attributed to a decline in ADR of 4.9% in the year ended December 31, 2003 as a result of the sluggish economy, travelers fears of exposure to contagious diseases and the effects of Operation Iraqi Freedom. The
decrease in ADR was partially offset by an increase in occupancy of 3.4%.



Non-proprietary branded properties, including Doubletree®, Hilton®,
Holiday Inn®, Marriott®, Ramada®, Radisson®, and Hyatt®, represented approximately 11.4% and 14.3% of our total revenues for each of the years ended December 31, 2003 and 2002, respectively. Total revenue for this segment was $146 million
compared to $193.7 million for the years ended December 31, 2003 and 2002, respectively. Operating income for this segment was $26.5 million and $38.7 million for the years ended December 31, 2003 and 2002, respectively. The decrease in both revenue
and operating income is due in part to the sale of non-proprietary branded assets since December 31, 2002. Also, operating results were impacted by a decline in ADR of 5.4% as a result of the sluggish economy, travelers fears of exposure to
contagious diseases and the effects of Operation Iraqi Freedom.



During 2002, we identified 50 non-proprietary branded hotels as non-strategic assets that we intend to sell. We have sold 26 of these assets and 24 assets remain to be sold. However, these remaining 24 non-strategic assets will be held
until such time as the sales price meets or exceeds managements assessment of each assets fair value. The 24 assets represented approximately 20% and 17% of our revenue for the years ended December 31, 2003 and 2002, respectively.
In response to third party offers, we have also identified a limited number of Wyndham-branded assets that we would consider selling under limited circumstances and upon specific conditions. The Wyndham-branded assets include properties where we
would retain a franchise or management agreement, properties that reside in markets where we have multiple Wyndham-branded assets and would maintain favorable market penetration after the sale, and properties that are inconsistent with the
maintenance and development of the Wyndham brand.



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 segment was $23.8 million and $24.7 million for the years ended December 31, 2003 and 2002, respectively. The decrease in this segments revenue was primarily the result of a reduction in dividend and interest income from investments that
were sold subsequent to December 31, 2002. Operating losses for this segment were $481 million and $557.7 million for the years ended December 31, 2003 and 2002, respectively. The decrease was primarily due to the following: reductions in bonus
expenses of $8.2 million, reductions in payroll costs of $3.1 million, reductions in deferred compensation expenses of $882,000, reductions in legal fees of $414,000, reductions in development and acquisition costs of $2.6 million, reductions
in severance costs of $2.9 million, reductions in management contract costs of $5.6 million, reductions in derivative instruments of $62.6 million, reductions in bond cancellation costs of $3.8 million, reductions in interest expense of $27.6
million, reductions in depreciation and amortization of $11.9 million and reductions in leasehold termination costs of $4 million. The reductions were offset by increases in receivable write-offs of $908,000, increases in directors and
officers insurance of $1.6 million, increases in general insurance costs of $493,000, increases in professional fees of $1.1 million, increases in impairment on assets held



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##### Index to Financial Statements

for sale of $27.8 million, increases in losses on the sale of assets of $15.6 million, increases in office equipment maintenance and supply costs of $1.7
million and a litigation settlement accrual of $6.8 million.



For the year ended December 31, 2002 compared with the year ended December 31, 2001



Wyndham branded properties include Wyndham Hotels & Resorts®, Wyndham Luxury Resorts®, Wyndham Garden hotels® and Summerfield Suites by Wyndham. This segment represented approximately 83.8% and 79.4% of our total revenues for the years ended December 31, 2002 and 2001, respectively. Total
revenue for this segment was $1.13 billion compared to $1.18 billion for the years ended December 31, 2002 and 2001, respectively. Operating income for this segment was $276.8 million compared to $321.4 million for the years ended December 31, 2002
and 2001, respectively. Decreases in revenue and operating income for this segment can be primarily attributed to a decline in ADR of 9.7% in 2002. The decrease in ADR was partially offset by an increase in occupancy of 2.4%. Also, operating results
were impacted by increases in our fixed expenses, such as property insurance.



Non-proprietary branded properties, including Doubletree®, Hilton®,
Holiday Inn®, Marriott®, Ramada®, Radisson®, and Hyatt®, represented approximately 14.3% and 18.5% of our total revenues for each of the years ended December 31, 2002 and 2001, respectively. Total revenue for this segment was $193.7 million
compared to $274.3 million for the years ended December 31, 2002 and 2001, respectively. Operating income for this segment was $38.7 million and $66.3 million for the years ended December 31, 2002 and 2001, respectively. The decrease in both revenue
and operating income is due in part to the sale of non-proprietary branded assets since 2001. Also, operating results were impacted by declines in ADR and occupancy of 7.1% and 4.8%, respectively, and by increases in our fixed expenses, such as
property insurance.



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 segment was $24.7 million
and $30.5 million for the years ended December 31, 2002 and 2001, respectively. The decrease in this segments revenue was primarily the result of lost management fees from contracts lost and the decline in hotel revenue upon which
management fees are based. Operating losses for this segment were $557.7 million and $647.8 million for the years ended December 31, 2002 and 2001, respectively. The decrease in operating loss is primarily a result of the following:
reductions in conversion costs of $11.7 million resulting from the implementation of brand standards in our portfolio of hotels, reductions in the write-off of receivables deemed not collectible for $5.5 million, reductions of $4.5 million in
costs associated with the termination of management and leasehold contracts, reductions of $5.2 million in reservation and marketing funds not reimbursed by the hotels, reductions in management contract costs of $10 million, reductions in
impairment on assets held for sale of $24 million, reductions in interest expense of $65 million, reductions of $6.6 million in severance costs and increases in the gain on the sale of assets of $21.9 million. These reductions were offset
in 2002, in part, by increases in debt restructuring costs of $1.5 million, increases in the bonus expenses of $7.5 million, increases in deferred compensation expenses of $1.3 million, increases in derivative instruments of $37.2 million,
increases in bond cancellation costs of $3.8 million, increases in depreciation and amortization of $5 million and increases in office equipment maintenance and supply costs of $2.2 million.



Recent Events



During 2004 to date, we have sold our investments in nine hotels in three separate transactions for net cash proceeds of
$45.6 million after repayment of mortgage debt of $96.5 million. Of the net cash proceeds, $34.8 million was used to pay down a portion of the senior credit facility and increasing rate loan facility, and we retained the rest of the net cash
proceeds in accordance with the terms of the senior credit facilities.



In March 2004, the leases on six Summerfield Suites by Wyndham properties were terminated and the properties were converted to long-term franchises. Assets of approximately $22 million, which represented the leases remaining
book value, were considered impaired and written-off as of December 31, 2003.



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##### Index to Financial Statements

On January 31, 2004, Stephen T. Clark resigned his position as a class C director due to time
constraints.

On February 11, 2004, Marc A. Beilinson was appointed a class C director to fill the vacancy created by Mr. Clarks resignation.



On February 11, 2004, Adela Cepeda was appointed a class A
director to fill the vacancy created by Sue Groentemans resignation on September 18, 2002.



On February 25, 2004, Norman Brownstein resigned his position as a class C director due to time constraints. No one has been appointed to fill this
vacancy at this time.



Statistical Information



During 2003, our portfolio of 103 owned and leased hotels
experienced a decline in both ADR and RevPAR of approximately 4.9% and 1.6%, respectively, as compared to 2002 while occupancy increased by 3.4%. We attribute the declines in both ADR and RevPAR primarily to a sluggish economy, travelers fears
of exposure to contagious diseases and the effects of Operation Iraqi Freedom. The following table sets forth certain statistical information for our 103 owned and leased hotels for 2003 and 2002 as if the hotels were owned or leased for the entire
periods presented.



|                               |  |           |   |  |      |   |        |      |        |      |   |        |  |      |        |  |   |       
|------------------------------ |  | --------- | - |  | ---- | - | ------ | ---- | ------ | ---- | - | ------ |  | ---- | ------ |  | - | ------
|                               |  | Occupancy |   |  | ADR  |   | RevPAR
|                               |  | 2003      |   |  | 2002 |   |        | 2003 |        | 2002 |   | 2003   |  | 2002
|Wyndham Hotels & Resorts®      |  | 73.4      | % |  | 68.5 | % |        | $    | 115.02 |      | $ | 120.53 |  | $    | 84.43  |  | $ | 84.36 
|Wyndham Luxury Resorts®        |  | 75.1      |   |  | 74.4 |   |        |      | 223.42 |      |   | 236.15 |  |      | 167.78 |  |   | 176.16
|Wyndham Garden Hotels®         |  | 75.4      |   |  | 71.6 |   |        |      | 90.79  |      |   | 101.44 |  |      | 68.44  |  |   | 73.69 
|Summerfield Suites by Wyndham |  | 84.7      |   |  | 79.0 |   |        |      | 91.98  |      |   | 100.18 |  |      | 77.9   |  |   | 80.31 
|Non-proprietary brands         |  | 58.1      |   |  | 57.9 |   |        |      | 87.49  |      |   | 92.5   |  |      | 50.8   |  |   | 53.62 
|                               |  |           |   |  |      |   |        |      |        |      |   |        |  |      |        |  |   |       
|Weighted average               |  | 68.6      | % |  | 65.2 | % |        | $    | 106.28 |      | $ | 111.75 |  | $    | 72.96  |  | $ | 74.17 
|                               |  |           |   |  |      |   |        |      |        |      |   |        |  |      |        |  |   |       



Liquidity and Capital Resources



Our cash and cash equivalents as of December 31, 2003
were $62.4 million, and our restricted cash was $130.5 million. Our cash and cash equivalents as of December 31, 2002 were $37.2 million, and our restricted cash was $143.8 million. Included in restricted cash at December 31, 2003 is $25.9 million
which is a portion of the net proceeds received from the sale of Marriott Philadelphia West that was part of a portfolio of thirteen hotels sold in 2002. The $25.9 million will be used to make payments on such debt, refinance all or any portion of
the debt and/or extend maturities and amortization payments in accordance with the credit facilities.



Cash Flow Provided by Operating Activities



Our principal source of cash flow is from the operations of the hotels that we own, lease and manage. Cash flows from operating activities were $62.6
million, $76.5 million and $158.4 million for the years ended December 31, 2003, 2002 and 2001, respectively. Operational cash flows were negatively impacted by lower cash generated from hotel operations as a result of hotels sold and lower RevPar
which was 1.6% lower compared to the same period in 2002. The decrease in RevPar was negatively impacted by the sluggish economy, travelers fears of exposure to contagious diseases and the effects of Operation Iraqi Freedom. This was offset in
part by lower interest expense payments of approximately $47.4 million as compared to the same period in 2002 due to the reduction in the amount of our total debt and lower interest rates in 2003.



Cash Flows from Investing and Financing Activities



Cash flows provided by our investing activities were $137.2 million for the
year ended December 31, 2003, resulting primarily from proceeds received from the sale of assets during 2003. This was offset by renovation



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##### Index to Financial Statements

expenditures at certain hotels, the acquisition of a hotel property and changes in our restricted cash reserves during the period. Cash flows used in
financing activities of $174.6 million for the year ended December 31, 2003 were primarily related to principal repayments made on our debt.



Cash flows provided by our investing activities were $425.7 million for the year ended December 31, 2002, resulting primarily from asset sales during
2002. This was partially offset by renovation expenditures at certain hotels. Cash flows used by our financing activities of $631 million for the year ended December 31, 2002 were primarily related to the net principal repayments made on our debt as
a result of asset sales.



Cash flows used in our investing
activities were $63.4 million for the year ended December 31, 2001, resulting primarily from renovation expenditures at certain hotels. This was partially offset by proceeds received from asset sales during 2001. Cash flows provided by our financing
activities of $18.1 million for the year ended December 31, 2001 were primarily related to us borrowing under our senior credit facility, which was partially offset by dividend payments made by us on our Series A and B preferred stock.



Credit Facilities



As of December 31, 2003, we had approximately $164.1 million outstanding
under our revolving credit facility, $1.05 billion outstanding on term loans I, $343.3 million outstanding on term loans II and $15.1 million outstanding under increasing rate loans. Additionally, we had outstanding letters of credit totaling $77.5
million. Also, as of December 31, 2003, we had $1.07 billion of mortgage debt outstanding that encumbered 40 hotels and capital leases and other debt of $38.4 million, resulting in total indebtedness of approximately $2.68 billion. Included in
the total indebtedness is approximately $118.1 million of debt associated with assets held for sale. As of December 31, 2003, we had approximately $161 million in liquidity. Our liquidity is defined as revolver availability plus cash in our
overnight accounts.



On March 4, 2003, we entered into a fourth
amendment and restatement of our term loan and revolving credit facility and a third amendment of our increasing rate loans facility. The amendments and restatements include the following:



| |  | an increase in the letter of credit availability under our revolving facility from $75 million to $90 million;
| | - | --------------------------------------------------------------------------------------------------------------



| |  | waivers and consents by the lenders to any resolution of issues surrounding certain under-performing properties;
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | extension of the outside date by which we must grant mortgage liens to the lenders on certain excluded properties under the credit facilities; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | authorization to effect certain administrative organizational changes to our corporate structure.
| | - | -------------------------------------------------------------------------------------------------



On May 29, 2003, we entered into a fifth amendment and restatement of our term loan and revolving credit facility and a
fourth amendment of our increasing rate loans facility. The amendments provided for the extension of the maturity dates of our revolving and increasing rate loan facilities held by consenting lenders (previously scheduled to occur on June 30, 2004)
to April 1, 2006 upon the satisfaction of certain conditions, including the principal repayment of $200.2 million of the term and increasing rate facilities before February 29, 2004. On December 9, 2003, we satisfied all conditions precedent
necessary to affect an extension of the consenting lenders maturity dates for the revolving credit facility and the increasing rate loans to April 1, 2006. Loans held by non-consenting lenders totaling approximately $19 million will retain the
original maturity date of June 30, 2004. Pursuant to the terms of the amended credit facilities, we have retained an amount sufficient to satisfy such $19 million debt at maturity from the net cash proceeds of asset sales and refinancings. The
proceeds of asset sales and refinancings were the primary sources of funds for the $200.2 million principal repayment and the $19 million reserve for the June 30, 2004 maturities. In connection with the maturity extensions, the available
commitments under our revolving credit facility have been reduced by $85 million. Over 95% of the revolving and increasing rate lenders voted in favor of the amendments. Also, consenting lenders will receive an increase in



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##### Index to Financial Statements

interest rate and certain fees as set forth in the amended credit facilities, including a 2% fee to be paid at maturity based upon the sum of the revolving
commitments and outstanding terms loans, if any, as of June 30, 2005.



Pursuant to the terms of the amended credit facilities as in effect following the maturity extensions described above, we may retain some or all of the net cash proceeds from asset sales and refinancings of existing mortgage indebtedness
(other than the credit facilities) up to $22.5 million to be used to repay the non-consenting lenders at the June 2004 original maturity date as long as we maintain a pro forma minimum revolving credit facility commitment availability after giving
effect to such retention. As of January 15, 2004, we have retained $22.5 million to satisfy the non-consenting lenders at the June 2004 original maturity date from the net cash proceeds of asset sales and refinancings. We may retain all or any
portion of the reserved amount in the event the outstanding balance of the loans held by non-consenting lenders is less than the reserved amount as of the June 2004 maturity date. Following the retention described above, we will apply net cash
proceeds in the following manner: first, the initial $20 million of asset sale proceeds each year may be retained by us, provided that the second $10 million of the $20 million may be retained only if our liquidity falls below a certain level set
forth in the credit facilities; second, subject to certain limitations set forth in the credit facilities including our maximum liquidity levels, we may elect to retain up to 25% of such net cash proceeds with the balance applied to repay
indebtedness under the credit facilities, up to a maximum of $35 million a year; third, to repay scheduled term loan payments; fourth, after we have retained $35 million in such year, or if we are not permitted to retain a percentage of the asset
sale or refinancing proceeds as a result of the limitations set forth in the credit facilities, 100% of such proceeds must be applied to repay indebtedness under the credit facilities on a pro-rata basis. We also agreed to use 100% of the net cash
proceeds from new debt issuances (other than refinancings of existing mortgage indebtedness which will be applied in accordance with the previous sentence) to reduce outstanding indebtedness under the credit facilities on a pro rata basis.



On June 11, 2003, we completed a $425 million mortgage
refinancing secured by 19 hotel properties. The loan was made by affiliates of Lehman Brothers Holdings Inc., bears interest at the rate set forth in Note 4, footnote 8 to our consolidated financial statements and has an initial maturity date of
June 9, 2005. We have the sole discretion to extend the maturity date of the loan to as late as July 9, 2008. The loan refinanced the two mortgage pools that were scheduled to mature on July 1, 2003 and July 1, 2004, respectively.



On November 6, 2003, we refinanced the Wyndham Condado Plaza mortgage debt
totaling $36.5 million as of September 30, 2003, with Lehman Brothers Holdings Inc. A portion of the excess proceeds received from the Condado refinancing was used to pay down $23.5 million of the senior credit facility and increasing rate loan. The
new loan totaling $94.5 million bears interest at LlBOR plus 4.25%, with a 2% LIBOR floor, and matures on November 6, 2005. The maturity date may be extended, solely at our option, for three one year periods.



We have considered our short-term liquidity needs and the adequacy of
adjusted estimated cash flows and other expected liquidity sources to meet these needs. We believe that our principal short-term liquidity needs are to fund our normal recurring expenses and our debt service requirements. We anticipate that these
needs will be fully funded from our cash flows provided by operating activities and, when necessary, from our revolving credit facility. In the past, we have generally met our long-term liquidity requirements for the funding of activities, such as
development and scheduled debt maturities, major renovations, expansions and other non-recurring capital improvements, through long-term secured and unsecured indebtedness and the proceeds from the sale of our assets. In the future, we may seek to
increase our capital resources through similar activities or, subject to limitations imposed by the terms of our credit agreements and preferred stock, through offerings of debt or equity securities, including convertible notes and preferred or
common stock.



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##### Index to Financial Statements

As of December 31, 2003, under the terms of the applicable credit facilities, loan agreements, and lease
agreements, our principal amortization and balloon payment requirements and our future five year minimum lease payments are summarized as follows:



|                           |  |                      |           |      |   |         |      |  |   |         |     |      |   |           |  |                    |         |  |   |        |  |   |        
|-------------------------- |  | -------------------- | --------- | ---- | - | ------- | ---- |  | - | ------- | --- | ---- | - | --------- |  | ------------------ | ------- |  | - | ------ |  | - | -------
|                           |  | Payments due by year
|                           |  | Total                |           | 2004 |   |         | 2005 |  |   | 2006    |     | 2007 |   | 2008      |  | 2009 andthereafter
|                           |  | (in thousands)      
|Debt(A)                    |  | $                    | 2,645,081 |      | $ | 290,887 | (1)  |  | $ | 682,193 | (2) |      | $ | 1,533,922 |  | $                  | 91,342  |  | $ | 3,233  |  | $ | 43,504 
|Capital leases obligations |  |                      | 36,878    |      |   | 1,774   |      |  |   | 1,746   |     |      |   | 1,632     |  |                    | 1,483   |  |   | 911    |  |   | 29,332 
|Office leases(B)           |  |                      | 7,458     |      |   | 2,128   |      |  |   | 1,906   |     |      |   | 1,850     |  |                    | 1,418   |  |   | 125    |  |   | 31     
|Hotel and ground leases(B) |  |                      | 195,216   |      |   | 15,198  |      |  |   | 14,975  |     |      |   | 14,975    |  |                    | 15,536  |  |   | 15,426 |  |   | 119,106
|                           |  |                      |           |      |   |         |      |  |   |         |     |      |   |           |  |                    |         |  |   |        |  |   |        
|Total                      |  | $                    | 2,884,633 |      | $ | 309,987 |      |  | $ | 700,820 |     |      | $ | 1,552,379 |  | $                  | 109,779 |  | $ | 19,695 |  | $ | 191,973
|                           |  |                      |           |      |   |         |      |  |   |         |     |      |   |           |  |                    |         |  |   |        |  |   |        

---

|(1) | We can elect to extend $214.5 million for two additional twelve month periods, and an additional $19 million of debt has been provided for in a restricted cash account.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | We can elect to extend $491.7 million for three additional twelve month periods and $43.5 million for one additional twelve month period.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(A) | Subsequent to December 31, 2003, mortgage debt and senior credit facilities were paid down by $96.5 million and $34.8 million respectively, due to asset sales.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) | Office, hotel and ground leases are operating leases and are included in operating expenses.
|--- | --------------------------------------------------------------------------------------------



During 2004, we have scheduled principal payments and debt maturities of approximately $292.7 million. Of that amount, we
can elect to extend $214.5 million for two additional twelve month periods, and an additional $19 million of debt has been provided for in a restricted cash account. We are seeking to refinance the remaining mortgages prior to their maturities in
2004; however, there can be no assurance that we will be able to do so. During 2005, we have scheduled principal payments and debt maturities of approximately $683.9 million. Of that amount, we can elect to extend $491.7 million for three additional
twelve month periods and $43.5 million for one additional twelve month period. Of the remaining 2005 maturities, we are seeking to extend or refinance these debt maturities, however, there can be no assurance that we will be able to do so.



Dividends



We do not anticipate paying a dividend to our common stockholders and we are
prohibited under the terms of our senior credit facility and increasing rate loans facility from paying dividends on our class A common stock. For the six year period beginning September 30, 1999, dividends on our series A and series B preferred
stock are payable partly in cash and partly in additional shares of our series A and series B preferred stock, with the cash portion aggregating $29.25 million per year, so long as there is no redemption or conversion of our series A and series B
preferred stock. For the following four years, dividends are payable in cash or additional shares of our series A or series B preferred stock, as the case may be, as determined by our board of directors. After year ten, dividends are payable solely
in cash.



We are prohibited under the terms of the January 24,
2002 amendments to the senior credit facility and increasing rate loans facility from paying cash dividends on the series A and series B preferred stock. As of December 31, 2003, we have deferred payments of the cash portion of the preferred
stock dividend totaling approximately $73.1 million. This amount has been included in accounts payable and accrued expenses as of December 31, 2003. In addition, according to the terms of our series A and series B preferred stock, if the cash
dividends on the preferred stock are in arrears and unpaid for at least 60 days, then an additional amount of dividends will accrue at an annual rate of 2.0% of the stated amount of each share of preferred stock then outstanding from the last
payment date on which cash dividends were to be paid in full until the cash dividends in



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##### Index to Financial Statements

arrears have been paid in full. These additional dividends are cumulative and payable in additional shares of preferred stock. As of December 31, 2003, we
have issued an additional stock dividend of 637,652 shares of series A and series B preferred stock with a value of $63.8 million.



Renovations and Capital Improvements



During 2003, we invested approximately $59.6 million in capital improvements and renovations. These capital expenditures included (i) costs related to
enhancing the revenue-producing capabilities of our hotels and (ii) costs related to recurring maintenance. During 2004, we anticipate spending approximately $75 million in capital expenditures primarily for recurring maintenance capital
expenditures and technological initiatives. We are limited to capital expenditures of $125 million per year, plus $25 million per year for emergency capital expenditures under the terms of the January 24, 2002 amendments to the senior credit
facility and increasing rate loans facility.



We attempt to
schedule renovations and improvements during traditionally lower occupancy periods in an effort to minimize disruption to the hotels operations. Therefore, we do 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.



Inflation



Operators of hotels in general possess the ability to adjust room rates quickly. However, competitive pressures may limit our ability to raise room rates
in the face of inflation.



Seasonality



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



Critical Accounting Policies and Estimates



The preparation of our consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to:
impairment of assets; assets held for sale; bad debts; income taxes; insurance reserves; derivatives; and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.



We believe the following
critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. We periodically review the carrying value of our assets, including intangible assets, to determine if
events and circumstances exist indicating that assets might be impaired. If facts and circumstances support this possibility of impairment, our management will prepare probability weighted undiscounted and discounted cash flow projections which
require judgments that are both subjective and complex.



Our
management uses its judgment in projecting which assets will be sold by us within the next twelve months. These judgments are based on our managements knowledge of the current market and the status of current negotiations with third parties.
If assets are expected to be sold within 12 months, they are reclassified as assets held for sale on the balance sheet.



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##### Index to Financial Statements

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our
customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.



We record a valuation allowance to reduce our deferred tax assets to the
amount that is more likely than not to be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, should we determine that we would be able
to realize our deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should we determine that we would not be able
to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.



We maintain a paid loss deductible insurance plan for commercial general liability, automobile liability, and workers
compensation loss exposures related to our hotel operations. The primary loss deductible retention limit is currently $500,000 per occurrence for general liability and $250,000 per occurrence for automobile liability and workers compensation
loss, in most jurisdictions. The estimates of the ultimate liability for losses and associated expenses are based upon a third party actuarial analysis and projection of actual historical development trends of loss frequency, severity and incurred
but not reported claims as well as traditional issues that affect loss cost such as medical and statutory benefit inflation. In addition, the actuarial analysis compares our trends against general insurance industry development trends to develop an
estimate of ultimate costs within the deductible retention. Large claims or incidents that could potentially involve material amounts are also monitored closely on a case-by-case basis. As of December 31, 2003, our balance sheet included an
estimated liability with respect to this self-insurance program of $26.6 million.



Our objective in using derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. During the year ended December 31, 2003, such derivatives were used to hedge the
variable cash flows associated with a portion of our variable-rate debt. As of December 31, 2003, we did not have any derivatives designated as fair value hedges. Additionally, we do not use derivatives for trading or speculative purposes. We use a
variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date to determine the fair value of our derivative instruments. For the majority of financial instruments including most derivatives,
standard market conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost, and termination cost are used to determine fair value. All methods of assessing fair value result in a general approximation
of value, and such value may never actually be realized. Future cash inflows or outflows from our derivative instruments depend upon future borrowing rates. If assumptions about future borrowing rates prove to be materially incorrect, the recorded
value of these agreements could also prove to be materially incorrect. Because we use the derivative instruments to reduce our exposure to increases in variable interest rates, thus effectively fixing a portion of our variable interest rates, the
impact of changes in future borrowing rates could result in our interest expense being either higher or lower than might otherwise have been incurred on our variable-rate borrowings had the rates not been fixed. A reduction in interest rates could
result in a competitive advantage for companies in a position to take advantage of a lower cost of capital.



We are a defendant in lawsuits that arise out of, and are incidental to, the conduct of our business. Our management uses its judgment, with the aid of
legal counsel, to record accruals for losses that we consider to be probable and that can be reasonably estimated as a result of any pending actions against us.



Newly Issued Accounting Standards



We implemented the provisions of SFAS 144, Accounting for the Impairment or Disposal of Long-lived Assets, in 2002. As a result of the
adoption of SFAS 144, gain and losses on long-lived assets classified as held for sale subsequent to January 1, 2002, the effective date of SFAS 144, was classified as gains or losses from the disposal of discontinued operations. Certain gains and
losses on long-lived assets classified as held for sale that



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##### Index to Financial Statements

were disposed of during the years ended December 31, 2003, 2002 and 2001, have been classified in continued operations because they were classified as held
for sale as of December 31, 2001 and restatement of prior periods is not permitted under SFAS 144.



On January 1, 2003, we adopted SFAS 145, Rescission of SFAS 4, 44 and 66, Amendment of SFAS 13 and Technical Correction. SFAS 145 rescinds
SFAS 4, 44 and 64 and amends SFAS 13 to modify the accounting for sale-leaseback transactions. SFAS 4 required the classification of gains and losses resulting from extinguishment of debt to be classified as extraordinary items. Pursuant to the
adoption of SFAS 145, we reclassified amount shown as extraordinary item for the year ended December 31, 2001 to continuing operations.



In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS 148, Accounting for Stock-Based
CompensationTransition and Disclosure, which amends SFAS 123, Accounting for Stock-Based Compensation. In response to a growing number of companies announcing plans to record expenses for the fair value of stock
options, SFAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
more prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. SFAS 148 also amends the disclosure provisions of SFAS 123 to require more prominent disclosure about the effects of an entitys
accounting policy decisions with respect to stock-based employee compensation on reported net income. Finally, SFAS 148 amends Accounting Principles Board Opinion No. 28, Interim Financial Reporting,to require disclosure
about those effects in interim financial information. The amendments to SFAS 123 are effective for financial statements for fiscal years ending after December 15, 2002. We made the disclosures required by the provisions of SFAS 148 on page F-12
under Stock Compensation.



In January 2003, the
FASB issued Interpretation 46 (FIN 46 ), Consolidation of Variable Interest Entities. The objective of FIN 46 is to provide guidance on how to identify a variable interest entity (VIE) and determine when the
assets, liabilities, non-controlling interest, and results of operations of a VIE need to be included in a companys consolidated financial statements. A company that holds a variable interest in an entity will need to consolidate the entity if
the companys interest in the VIE is such that the company will absorb a majority of the VIEs expected losses and/or receive a majority of the entitys expected residual returns, if they occur. FIN 46 also requires additional
disclosure by primary beneficiaries and other significant variable interest holders. The disclosure provisions of FIN 46 became effective upon issuance. The consolidation requirements of FIN 46 apply immediately to VIEs created after January
31, 2003 and in the first fiscal year or interim period ending after March 15, 2004 to existing VIEs. We did not establish any variable interest entities after January 31, 2003. We are in the process of evaluating all of our lease, management
and joint venture relationships that existed prior to January 31, 2003 in order to determine whether the entities are VIEs and whether we are considered to be the primary beneficiary or whether we hold a significant variable interest. We
believe it is reasonably possible that our interest in one management contract (Wyndham Anatole) is a VIE where we are the primary beneficiary, which requires consolidation under FIN 46 as of January 1, 2004. Had consolidation been required as of
December 31, 2003, we would have recorded assets of $150.7 million, liabilities of $201.2 million and minority interest of $(50.5) million. In the unlikely event that we terminate the management contract and all of the underlying assets related to
this contract had no value, we estimate that the maximum exposure to loss would approximate $92.3 million, primarily representing the net carrying value of our investment in the Wyndham Anatole at December 31, 2003. However, we expect to recover the
recorded amount of our investment in the Wyndham Anatole. As we finalize our evaluation of the impact of applying FIN 46, additional entities may be identified that would need to be consolidated.



In April 2003, the FASB issued SFAS 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133. The new
guidance amends SFAS 133 for decisions made: (a) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS 133, (b) in connection with other Board projects dealing with financial instruments, and (c)
regarding implementation issues raised in relation to the application of the definition of a



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##### Index to Financial Statements

derivative, particularly regarding the meaning of an underlying derivative and the characteristics of a derivative that contains financing
components. The amendments set forth in SFAS 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. SFAS 149 is generally effective for contracts entered into or modified after June
30, 2003 (with a few exceptions) and for hedging relationships designated after June 30, 2003. The guidance is to be applied prospectively. The adoption of SFAS 149 did not have a material impact on our financial position or results of operations.



In May 2003, the FASB issued SFAS 150, Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS 150 specifies that instruments within its scope embody obligations of the issuer and that, therefore, the issuer must classify them as liabilities. For
calendar-year-end companies, SFAS 150 will become effective at the beginning of their third quarters. SFAS 150 is effective immediately for all financial instruments entered into or modified after May 31, 2003. For all other instruments, SFAS
150 goes into effect at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of a non-public entity. For contracts that were created or modified before May 31, 2003 and
still exist at the beginning of the first interim period beginning after June 15, 2003, entities should record the transition to SFAS 150 by reporting the cumulative effect of a change in an accounting principle. SFAS 150 prohibits entities
from restating financial statements for earlier years presented. On October 29, 2003, the FASB deferred the provisions of paragraphs 9 and 10 of SFAS 150 as they apply to mandatorily redeemable noncontrolling interests. Those provisions require that
mandatorily redeemable minority interests within the scope of SFAS 150 be classified as a liability on a parent companys financial statement in certain situations, including when a finite-lived entity is consolidated. The deferral of those
provisions is expected to remain in effect while these interests are addressed in either Phase II of the FASBs Liabilities and Equity project or Phase II of the FASBs Business Combinations Project. However, the FASB did not defer the
disclosure provisions relating to mandatorily redeemable noncontrolling interests. Therefore, in accordance with SFAS 150, if we liquidate the consolidated subsidiaries in which there exists a minority interest, we would be required to pay
approximately $23.1 million in cash. Such amount is lower than the carrying amount of the minority interest in consolidated subsidiaries by $16.8 million.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Our primary market risk exposure is to future changes in interest rates related to our derivative financial instruments and other financial instruments,
including debt obligations, interest rate swaps, interest rate caps, and future debt commitments.



We manage our 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 our exposure to rising interest rates.



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##### Index to Financial Statements

The following table provides information about our 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, 2003. For variable rate debt obligations, the table presents principal cash flows by expected maturity date and contracted interest rates at December 31, 2003.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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, 2003.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                               |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|-------------------------------------------------------------- |  | ---------------------- | ------- | --- | ---- | - | ------- | ---- |  | - | --------- | - |  | ---- | ------ | - | ---------- | - | ----- | --------- |  | --------- | ------ | - |  | - | --------- |  | - | --------- | -
|                                                               |  | 2004                   |         |     | 2005 |   |         | 2006 |  |   | 2007      |   |  | 2008 |        |   | Thereafter |   |       | FaceValue |  | FairValue |       
|                                                               |  | (dollars in thousands) |        
|Debt                                                           |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Long-term debt obligations including current portion           |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Fixed Rate                                                     |  | $                      | 5,508   |     |      | $ | 19,033  |      |  | $ | 7,167     |   |  | $    | 92,291 |   |            | $ | 3,539 |           |  | $         | 60,720 |   |  | $ | 188,258   |  | $ | 201,501   |  
|Average Interest Rate                                          |  |                        | 8.75    | %   |      |   | 8.98    | %    |  |   | 9.09      | % |  |      | 8.12   | % |            |   | 9.05  | %         |  |           | 9.00   | % |  |   |           |  |   |           |  
|Variable Rate                                                  |  | $                      | 287,153 | (1) |      | $ | 664,906 | (2)  |  | $ | 1,528,387 |   |  | $    | 535    |   |            | $ | 605   |           |  | $         | 12,115 |   |  | $ | 2,493,701 |  | $ | 2,493,701 |  
|Average Interest Rate                                          |  |                        | 5.02    | %   |      |   | 7.63    | %    |  |   | 9.87      | % |  |      | 4.81   | % |            |   | 4.65  | %         |  |           | 4.87   | % |  |   |           |  |   |           |  
|Interest Rate Derivative Financial Instruments Related to Debt |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Interest Rate Swaps (based on British LIBOR)                   |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Pay Fixed/Receive Variable                                     |  | $                      |        |     |      | $ | 53,128  |      |  | $ |          |   |  | $    |       |   |            | $ |      |           |  | $         |       |   |  | $ | 53,128    |  | $ | (109      | )
|Average Pay Rate                                               |  |                        | 4.62    | %   |      |   | 4.62    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  
|Average Receive Rate                                           |  |                        | 4.52    | %   |      |   | 4.94    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  
|Interest Rate Swaps                                            |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Pay Fixed/Receive Variable                                     |  | $                      |        |     |      | $ | 755,978 |      |  | $ |          |   |  | $    |       |   |            | $ |      |           |  | $         |       |   |  | $ | 755,978   |  | $ | (49,148   | )
|Average Pay Rate                                               |  |                        | 6.63    | %   |      |   | 6.63    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  
|Average Receive Rate                                           |  |                        | 1.50    | %   |      |   | 2.94    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  
|Interest Rate Caps                                             |  |                        |         |     |      |   |         |      |  |   |           |   |  |      |        |   |            |   |       |           |  |           |        |   |  |   |           |  |   |           |  
|Notional Amount                                                |  | $                      | 377,465 |     |      | $ | 688,515 |      |  | $ |           |   |  | $    |       |   |            | $ |      |           |  | $         |       |   |  | $ | 1,065,980 |  | $ | (7,503    | )
|Strike Rate                                                    |  |                        | 6.21    | %   |      |   | 5.83    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  
|Forward Rate                                                   |  |                        | 1.50    | %   |      |   | 2.94    | %    |  |   |          |   |  |      |       |   |            |   |      |           |  |           |       |   |  |   |          |  |   |           |  

---

|(1) | We can elect to extend $214.5 million for two additional twelve month periods, and an additional $19 million of debt has been provided for in a restricted cash account.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | We can elect to extend $491.7 million for three additional twelve month periods and $43.5 million for one additional twelve month period.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(3) | Subsequent to December 31, 2003, mortgage debt and senior credit facilities were paid down by $96.5 million and $34.8 million respectively, due to asset sales.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



42



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##### Index to Financial Statements

The debt portfolio as of December 31, 2002 was as follows:



|                                                               |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|-------------------------------------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | --------- | - | ---------- | - | ------ | ---------- |  | ---------- | ------ | - |  | - | --------- |  | - | --------- | -
|                                                               |  | 2003                   |         |   | 2004 |   |         | 2005 |  |   | 2006    |   |  | 2007 |           |   | Thereafter |   |        | Face Value |  | Fair Value |       
|                                                               |  | (dollars in thousands) |        
|Debt                                                           |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|Long-term debt obligations including current portion           |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|Fixed Rate                                                     |  | $                      | 7,881   |   |      | $ | 15,843  |      |  | $ | 47,180  |   |  | $    | 7,012     |   |            | $ | 92,248 |            |  | $          | 64,220 |   |  | $ | 234,384   |  | $ | 259,993   |  
|Average Interest Rate                                          |  |                        | 8.39    | % |      |   | 3.09    | %    |  |   | 7.51    | % |  |      | 9.22      | % |            |   | 8.13   | %          |  |            | 9.29   | % |  |   |           |  |   |           |  
|Variable Rate                                                  |  | $                      | 377,905 |   |      | $ | 879,527 |      |  | $ | 171,875 |   |  | $    | 1,153,177 |   |            | $ |       |            |  | $          | 9,675  |   |  | $ | 2,592,159 |  | $ | 2,592,159 |  
|Average Interest Rate                                          |  |                        | 4.51    | % |      |   | 7.14    | %    |  |   | 6.67    | % |  |      | 9.59      | % |            |   |       |            |  |            | 1.80   | % |  |   |           |  |   |           |  
|Interest Rate Derivative Financial Instruments Related to Debt |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|Interest Rate Swaps                                            |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|Pay Fixed/Receive Variable                                     |  | $                      |        |   |      | $ |        |      |  | $ | 803,709 |   |  | $    |          |   |            | $ |       |            |  | $          |       |   |  | $ | 803,709   |  | $ | (78,936   | )
|Average Pay Rate                                               |  |                        | 6.51    | % |      |   | 6.67    | %    |  |   | 6.68    | % |  |      |          | % |            |   |       |            |  |            |       |   |  |   |           |  |   |           |  
|Average Receive Rate                                           |  |                        | 1.39    | % |      |   | 2.49    | %    |  |   | 3.71    | % |  |      |          | % |            |   |       |            |  |            |       |   |  |   |           |  |   |           |  
|Interest Rate Caps                                             |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |           |   |            |   |        |            |  |            |        |   |  |   |           |  |   |           |  
|Notional Amount                                                |  | $                      | 426,121 |   |      | $ | 337,577 |      |  | $ | 104,070 |   |  | $    |          |   |            | $ |       |            |  | $          |       |   |  | $ | 867,768   |  | $ | (13,878   | )
|Strike Rate                                                    |  |                        | 6.89    | % |      |   | 7.93    | %    |  |   | 9.75    | % |  |      |          | % |            |   |       |            |  |            |       |   |  |   |           |  |   |           |  
|Forward Rate                                                   |  |                        | 1.39    | % |      |   | 2.49    | %    |  |   | 3.71    | % |  |      |          | % |            |   |       |            |  |            |       |   |  |   |           |  |   |           |  



From December 31, 2002
to December 31, 2003, the liability for derivative instruments decreased by $36.1 million. Our derivative portfolio consists entirely of interest rate protection agreements, which are valued based on the present value of future expected hedge
payments over the remaining term of each interest rate hedge. Since, the hedges have moved closer to their maturity date at the end of 2003, the present value of future expected hedge payments has decreased. Consequently, the negative market value
on the hedges has decreased which resulted in a decrease to the liability for derivative instruments.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The independent auditors report and our financial statements, notes thereto and financial statement schedules listed in the accompanying index are filed as part of this Annual Report on Form 10-K. 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



None



ITEM 9A. CONTROLS AND PROCEDURES



As of December 31, 2003, management, under the supervision and with the participation of our Chairman of the Board and Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial
officer), evaluated the effectiveness of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based on this evaluation, our
Chairman of the Board and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission (the SEC) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.



During the three month period ended December 31, 2003, there were no changes
in our internal control over financial reporting that materially affected or are reasonably likely to materially affect our internal control over financial reporting.



There were no significant changes in our internal controls or in other factors that could significantly affect these
controls subsequent to the date of such evaluation.



43



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##### Index to Financial Statements

PART III



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



The information required by Item 10 of this Annual Report on Form 10-K (other than the information required by Item 401 of Regulation S-K with respect to executive officers, which appears under the heading
Executive Officers of the Registrant in Part I of this report) is incorporated by reference from our definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A of the Exchange Act in connection with our 2004
Annual Meeting of Stockholders.



On January 31, 2004, Stephen
T. Clark resigned his position as a class C director due to time constraints. On February 11, 2004, Marc A. Beilinson was appointed a class C director to fill the vacancy created by Mr. Clarks resignation.



On February 11, 2004, Adela Cepeda was appointed a class A director to fill
the vacancy created by Sue Groentemans resignation on September 18, 2002.



On February 25, 2004, Norman Brownstein resigned his position as a class C director due to time constraints. No one has been appointed to fill the vacancy at this time.



ITEM 11. EXECUTIVE COMPENSATION



The information required by Item 11 of this Annual Report on Form 10-K is incorporated by reference from our definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A of the Exchange Act in connection with our 2004
Annual Meeting of Stockholders.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS



With the exception of the equity compensation plan table
presented below, the information required by Item 12 of this Annual Report on Form 10-K is incorporated by reference from our definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A of the Exchange Act in connection with
our 2004 Annual Meeting of Stockholders.



Equity Compensation
Plan Information



|                                                           |  |                                                                                          |     |  |                                                                          |      |     |                                                                                                                                        |           |    
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- | --- |  | ------------------------------------------------------------------------ | ---- | --- | -------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---
|Plan category                                              |  | Number of securitiesto be issued upon exercise ofoutstanding options,warrants and rights |     |  | Weighted-averageexercise price ofoutstanding options,warrants and rights |      |     | Number of securitiesremaining available forfuture issuance underequity compensation plans(excluding securitiesreflected in
column (a)) |          
|                                                           |  | (a)                                                                                      |     |  | (b)                                                                      |      |     | (c)                                                                                                                                    |          
|Equity compensation plans approved by security holders     |  | 27,634,698                                                                               | (1) |  | $                                                                        | 5.75 | (2) |                                                                                                                                        | 7,934,232 | (3)
|Equity compensation plans not approved by security holders |  |                                                                                         |     |  |                                                                          |     |     |                                                                                                                                        |          |    
|                                                           |  |                                                                                          |     |  |                                                                          |      |     |                                                                                                                                        |           |    
|Total                                                      |  | 27,634,698                                                                               | (1) |  | $                                                                        | 5.75 | (2) |                                                                                                                                        | 7,934,232 | (3)
|                                                           |  |                                                                                          |     |  |                                                                          |      |     |                                                                                                                                        |           |    

---

|(1) | The 27,634,698 consists of 14,531,549 of stock options outstanding and 13,103,149 of restricted unit awards outstanding at December 31, 2003.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The figure set forth in column (b) reflects the weighted average exercise price for the 14,531,549 stock options outstanding under our equity compensation plans as of December 31,
2003. In addition to such stock options, 13,103,149 restricted unit awards were also outstanding under our equity compensation plans as of December 31, 2003. These restricted unit awards entitle the recipients to receive shares of our class A
common stock upon the satisfaction of certain terms and conditions, including the satisfaction of certain vesting requirements. Since no exercise price is payable with respect to the restricted unit awards, such restricted unit awards were excluded
from the calculation of the weighted average exercise price set forth in column (b).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Index to Financial Statements

|(3) | The figure set forth in column (c) reflects the number of securities available for issuance under our equity compensation plans as of December 31, 2003. Under the Second Amendment
and Restatement of our 1997 Incentive Plan, the number of shares available for grant is equal to 10% of the outstanding shares of our class A common stock on a fully diluted basis. For purposes of this plan, fully diluted basis means the
assumed conversion of all outstanding shares of our series A and series B convertible preferred stock, the assumed exercise of all outstanding stock options and the assumed conversion of all units of partnership interest in Patriot American
Hospitality Partnership, L.P. and Wyndham International Operating Partnership, L.P.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



The information required by Item 13 of this Annual Report on 10-K is incorporated by reference from our definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A of the Exchange Act in connection
with our 2004 Annual Meeting of Stockholders.



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The information required by Item 14 of this Annual Report on 10-K is incorporated by reference from our definitive Proxy Statement under the heading Ratification of Appointment of Independent Auditors to
be filed with the SEC pursuant to Regulation 14A of the Exchange Act in connection with our 2004 Annual Meeting of Stockholders.



PART IV



|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K
|-------- | ----------------------------------------------------------------



|(a) | The index to the audited financial statements and the notes thereto, and financial statement schedules is included on page F-1 of this Annual Report on Form 10-K. The financial
statements are included herein at pages F-1 through F-40. The following financial statement schedules are included herein at pages F-41 through F-50:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Schedule IIValuation and Qualifying Accounts



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, 2003:
|--- | ------------------------------------------------------------



We filed a Current Report on Form 8-K on November 10, 2003, reporting, under Item 12, our results of operations for the third quarter ended September 30,
2003.



|(c) | Exhibits:
|--- | ---------



|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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.



45



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##### Index to Financial Statements

|              |  |                                                                                                                                                                                                                                                                                                                                                                                          
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                              
|              | 
|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.                                                                                                                                                                                                                                     
|              | 
|4.1           |  | Certificate of Designation of Series A Convertible Preferred 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.                                                                                                                                          
|              | 
|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, incorporated by reference to Exhibit 4.2 to
Wyndhams Registration Statement on Form 8-A filed May 30, 2000.                                                                                                                              
|              | 
|4.8           |  | Amendment No. 2 to the Shareholder Rights Agreement, dated April 24, 2002, by and between Wyndham and American Stock Transfer and Trust Company, incorporated by reference to Exhibit 4.8
to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                  
|              | 
|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.                                                                                                                                                                 



46



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##### Index to Financial Statements

|              |  |                                                                                                                                                                                                                                                                                                                                                                                          
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                              
|              | 
|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, incorporated by reference to Exhibit 10.4 to Wyndhams Annual Report on Form 10-K for
the year ended December 31, 2000.                                                                                                                                                                
|              | 
|10.5          |  | 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.                                                                                                                                                                                  
|              | 
|10.6          |  | Second Amendment and Restatement of the Wyndham 1997 Incentive Plan, incorporated by reference to Exhibit 4.1 to Wyndhams Registration Statement on Form S-8 filed on September 6,
2001.                                                                                                                                                                                                
|              | 
|10.7          |  | 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.                                                                                                                                                               
|              | 
|10.8          |  | 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.                                                                                                                                                              
|              | 
|10.9          |  | 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.                                                                                                                                                            
|              | 
|10.10         |  | Letter Agreement, dated March 1, 2001, between James D. Carreker and Wyndham, incorporated by reference to Exhibit 10.16 to Wyndhams Annual Report on Form 10-K for the year ended
December 31, 2000.                                                                                                                                                                                   
|              | 
|10.11         |  | 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.                                                                                                                            
|              | 
|10.12         |  | Amendment and Restatement to the Increasing Rate Note Purchase and Loan Agreement, dated September 25, 2000, by Wyndham and the lenders named therein, incorporated by reference to Exhibit
10.18 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2000.                                                                                                          
|              | 
|10.13         |  | Employment Agreement dated March 19, 2001 between Joseph Champ 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, 2001 (as amended).                                                                                                                                                             
|              | 
|10.14         |  | Loan Agreement, dated as of July 18, 2001, by and among W-Baltimore, LLC, Posadas De San Juan Associates, W-Atlanta, LLC, W-Boston LLC and Travis Real Estate Group Joint Venture (wholly-owned
subsidiaries of Wyndham) and Lehman Brothers Bank FSB, incorporated by reference to Exhibit 10.1 to Wyndhams Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001.
|              | 
|10.15         |  | Form of Restricted Unit Award Agreement, incorporated by reference to Exhibit 10.2 to Wyndhams Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2001.                                                                                                                                                                                                              
|              | 
|10.16         |  | Waiver to the Credit Agreement, dated as of September 25, 2001, by Wyndham and the lenders named therein, incorporated by reference to Exhibit 10.1 to Wyndhams Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2001.                                                                                                                                        



47



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##### Index to Financial Statements

|              |  |                                                                                                                                                                                                                                                                                      
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                          
|              | 
|10.17         |  | Addendum to Employment Agreement, effective as of July 13, 2001, between Wyndham and Fred J. Kleisner, incorporated by reference to Exhibit 10.17 to Wyndhams Annual Report on Form 10-K
for the year ended December 31, 2001.                                                      
|              | 
|10.18         |  | Addendum No. 2 to Employment Agreement, effective as of November 14, 2001, between Wyndham and Fred J. Kleisner, incorporated by reference to Exhibit 10.18 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                            
|              | 
|10.19         |  | Second Amendment and Restatement to the Credit Agreement, dated as of January 16, 2002, by Wyndham and the lenders named therein, incorporated by reference to Exhibit 10.19 to Wyndhams
Annual Report on Form 10-K for the year ended December 31, 2001.                           
|              | 
|10.20         |  | Second Amendment and Restatement to the Increasing Note Purchase and Loan Agreement, dated as of January 16, 2002, by Wyndham and the lenders named therein, incorporated by reference to
Exhibit 10.20 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2001.
|              | 
|10.21         |  | Addendum to Employment Agreement, effective as of August 30, 2001, between Wyndham and Theodore Teng, incorporated by reference to Exhibit 10.21 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                                       
|              | 
|10.22         |  | Addendum No. 2 to Employment Agreement, effective as of December 31, 2001, between Wyndham and Theodore Teng, incorporated by reference to Exhibit 10.22 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                               
|              | 
|10.23         |  | Addendum to Employment Agreement, effective as of August 10, 2001, between Wyndham and Michael Grossman, incorporated by reference to Exhibit 10.23 to Wyndhams Annual Report on Form
10-K for the year ended December 31, 2001.                                                    
|              | 
|10.24         |  | Addendum No. 2 to Employment Agreement, effective as of December 21, 2001, between Wyndham and Michael Grossman, incorporated by reference to Exhibit 10.24 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                            
|              | 
|10.25         |  | Addendum to Employment Agreement, effective as of August 16, 2001, between Wyndham and Richard Smith, incorporated by reference to Exhibit 10.25 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                                       
|              | 
|10.26         |  | Addendum No. 2 to Employment Agreement, effective as of December 21, 2001, between Wyndham and Richard Smith, incorporated by reference to Exhibit 10.26 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                               
|              | 
|10.27         |  | Addendum to Employment Agreement, effective as of September 14, 2001, between Wyndham and David Johnson, incorporated by reference to Exhibit 10.27 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                                    
|              | 
|10.28         |  | Addendum No. 2 to Employment Agreement, effective as of December 31, 2001, between Wyndham and David Johnson, incorporated by reference to Exhibit 10.28 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                               
|              | 
|10.29         |  | Addendum to Employment Agreement, effective as of August 10, 2001, between Wyndham and Joseph Champ, incorporated by reference to Exhibit 10.29 to Wyndhams Annual Report on
Form 10-K for the year ended December 31, 2001.                                                        
|              | 
|10.30         |  | Addendum No. 2 to Employment Agreement, effective as of December 31, 2001, between Wyndham and Joseph Champ, incorporated by reference to Exhibit 10.30 to Wyndhams Annual Report on Form
10-K for the year ended December 31, 2001.                                                



48



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##### Index to Financial Statements

|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|              | 
|10.31         |  | Form of Third Amendment and Restatement to the Credit Agreement, dated as of April 22, 2002, by Wyndham and the lenders named therein, incorporated by reference to Exhibit 10.1 to
Wyndhams Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                 
|              | 
|10.32         |  | Amendment No. 1 to the Second Amendment and Restatement of Wyndhams 1997 Incentive Plan, incorporated by reference to Exhibit 10.2 to Wyndhams Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                                              
|              | 
|10.33         |  | Addendum No. 3 to Employment Agreement, effective as of January 7, 2002, between Wyndham and Fred J. Kleisner, incorporated by reference to Exhibit 10.3 to Wyndhams Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                         
|              | 
|10.34         |  | Addendum No. 4 to Employment Agreement, effective as of January 28, 2002, between Wyndham and Fred J. Kleisner, incorporated by reference to Exhibit 10.4 to Wyndhams Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                        
|              | 
|10.35         |  | Addendum No. 3 to Employment Agreement, effective as of January 7, 2002, between Wyndham and Theodore Teng, incorporated by reference to Exhibit 10.5 to Wyndhams Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                            
|              | 
|10.36         |  | Addendum No. 3 to Employment Agreement, effective as of January 7, 2002, between Wyndham and Joseph H. Champ, incorporated by reference to Exhibit 10.6 to Wyndhams Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                          
|              | 
|10.37         |  | Employment Agreement, dated September 17, 2002, between Wyndham and Mark A. Solls, incorporated by reference to Exhibit 10.1 to Wyndhams Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2002.                                                                                                                                                                                                                                                                 
|              | 
|10.38         |  | Loan Agreement, dated as of June 28, 1999, between Lehman Brothers Holdings Inc. and W-Brookfield, LLC, DT Glenview, LLC, R-Lisle, LLC, Rad-Burl, LLC, Parsippany, LLC, Rad-Jose, LLC, WCHNW,
LLC, W-Garden Atlanta, LLC, W-Charlotte, LLC, and H-Melbourne, L.P, incorporated by reference to Exhibit 10.38 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                 
|              | 
|10.39         |  | First Amendment to Loan Agreement, dated as of June 29, 2001, between W-Brookfield, LLC, DT Glenview, LLC, R-Lisle, LLC, Rad-Burl, LLC, Parsippany, LLC, Rad-Jose, LLC, WCHNW, LLC, W-Garden
Atlanta, LLC, W-Charlotte, LLC and H-Melbourne, L.P. and Sasco Floating Rate Commercial Mortgage Trust 1999-C3, Multiclass Pass-Through Certificates, Series 1999-C3, incorporated by reference to Exhibit 10.39 to Wyndhams Annual Report on Form
10-K for the year ended December 31, 2002.
|              | 
|10.40         |  | Amended and Restated Loan Agreement, dated as of November 5, 1999, between Bear, Stearns Funding, Inc. and the other parties signatory thereto, incorporated by reference to Exhibit 10.40 to
Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                                                                   
|              | 
|10.41         |  | First Amendment and Supplement to Amended and Restated Loan Agreement, dated as of September 6, 2002 between LaSalle Bank National Association, as Trustee for Bear Stearns Commercial
Mortgage Securities Inc. Commercial Mortgage Pass-Through Certificates Series 1999-WYN1 and the other parties signatory thereto, incorporated by reference to Exhibit 10.41 to Wyndhams Annual Report on Form 10-K for the year ended December 31,
2002.                                           
|              | 
|10.42         |  | Second Amendment and Supplement to Amended and Restated Loan Agreement, dated as of October 11, 2002, between LaSalle Bank National Association, as Trustee for Bear Stearns Commercial
Mortgage Securities Inc. Commercial Mortgage Pass-Through Certificates Series 1999-WYN1 and the other parties signatory thereto, incorporated by reference to Exhibit 10.42 to Wyndhams Annual Report on Form 10-K for the year ended
December 31, 2002.                                          



49



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##### Index to Financial Statements

|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|              | 
|10.43         |  | Third Amendment and Supplement to Amended and Restated Loan Agreement, dated as of November 15, 2002, between LaSalle National Bank, as Trustee for the Registered Holders of Bear Stearns
Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 1999-WYN1 and the other parties signatory thereto, incorporated by reference to Exhibit 10.43 to Wyndhams Annual Report on Form 10-K for the year
ended December 31, 2002.
|              | 
|10.44         |  | Promissory Note, dated September 4, 1997, by Patriot American Hospitality Partnership, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $13,467,000,
incorporated by reference to Exhibit 10.44 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                             
|              | 
|10.45         |  | Promissory Note, dated September 4, 1997, by PAH-DT Allen Partners, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $29,748,000, incorporated by
reference to Exhibit 10.45 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                
|              | 
|10.46         |  | Promissory Note, dated September 4, 1997, by PAH-DT Allen Partners, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $11,155,500, incorporated by
reference to Exhibit 10.46 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                
|              | 
|10.47         |  | Promissory Note, dated September 4, 1997, by PAH-DT Allen Partners, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $9,246,000, incorporated by
reference to Exhibit 10.47 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                 
|              | 
|10.48         |  | Promissory Note, dated September 4, 1997, by PAH-DT Allen Partners, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $21,909,000, incorporated by
reference to Exhibit 10.48 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                
|              | 
|10.49         |  | Promissory Note, dated September 4, 1997, by PAH-DT Allen Partners, L.P. in favor of Metropolitan Life Insurance Company in the original principal amount of $13,366,500, incorporated by
reference to Exhibit 10.49 to Wyndhams Annual Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                
|              | 
|10.50         |  | Promissory Note, dated February 13, 2001, by Fred J. Kleisner in favor of Wyndham, incorporated by reference to Exhibit 10.50 to Wyndhams Annual Report on Form 10-K for the year ended
December 31, 2002.                                                                                                                                                                                                                                                       
|              | 
|10.51         |  | Addendum No. 5 to Employment Agreement, effective as of January 6, 2003, by and between Wyndham and Fred J. Kleisner, incorporated by reference to Exhibit 10.51 to Wyndhams Annual
Report on Form 10-K for the year ended December 31, 2002.                                                                                                                                                                                                                    
|              | 
|10.52         |  | Fourth Amendment and Restatement to the Credit Agreement, dated as of March 4, 2003, by Wyndham and the lenders named therein, incorporated by reference to Exhibit 10.1 to Wyndhams
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003.                                                                                                                                                                                                
|              | 
|10.53         |  | Third Amendment and Restatement to the Increasing Rate Note Purchase and Loan Agreement, dated March 4, 2003, 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 March 31, 2003.                                                                                                                                                                       
|              | 
|10.54         |  | Fifth Amendment and Restatement to the Credit Agreement, dated as of May 29, 2003, among the Company and the lenders named therein, incorporated by reference to Exhibit 10.1 to Wyndhams
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003.                                                                                                                                                                                            



50



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##### Index to Financial Statements

|              |   |  |                                                                                                                                                                                                                                                                                                        
|------------- | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |   |  | Description                                                                                                                                                                                                                                                                                            
|              |  
|10.55         |   |  | Fourth Amendment and Restatement to the Increasing Rate Note Loan and Purchase Agreement, dated as of May 29, 2003, among the Company 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 June 30, 2003.
|              |  
|10.56         |   |  | Employment Agreement, dated May 21, 2003, between Wyndham and Andrew Jordan, incorporated by reference to Exhibit 10.3 to Wyndhams Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2003.                                                                                        
|              |  
|10.57         |   |  | Mortgage Loan Agreement, dated June 11, 2003, between Lehman ALI, Inc. and the Companys subsidiaries that are party thereto, incorporated by reference to Exhibit 99.2 to Wyndhams
Current Report on Form 8-K filed on July 18, 2003.                                                                
|              |  
|10.58         |   |  | Mezzanine Loan Agreement, dated June 11, 2003, between Lehman ALI, Inc. and the Companys subsidiaries that are party thereto, incorporated by reference to Exhibit 99.3 to Wyndhams
Current Report on Form 8-K filed on July 18, 2003.                                                               
|              |  
|10.59         | * |  | Mortgage Loan Agreement, dated October 28, 2003, between Lehman Brothers Holdings, Inc. D/B/A Lehman Capital and Posadas De Puerto Rico Associates, Inc.                                                                                                                                               
|              |  
|10.60         | * |  | Mezzanine Loan Agreement, dated October 28, 2003, between Lehman Brothers Holdings, Inc. and PPRA Mezz Borrower, Inc.                                                                                                                                                                                  
|              |  
|12.1*         |   |  | Statement Regarding Computation of Ratios.                                                                                                                                                                                                                                                             
|              |  
|21.1*         |   |  | Significant Subsidiaries of Wyndham.                                                                                                                                                                                                                                                                   
|              |  
|23.1*         |   |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                 
|              |  
|24.1*         |   |  | Power of Attorney (included on the signature page of this report on Form 10-K)                                                                                                                                                                                                                         
|              |  
|31.1*         |   |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                    
|              |  
|31.2*         |   |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                    
|              |  
|32.1*         |   |  | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                    
|              |  
|32.2*         |   |  | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                    

---

|* | Filed herewith
|- | --------------



51



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##### Index to Financial Statements

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 8, 2004



WYNDHAM INTERNATIONAL, INC.By:

/s/    FRED J.
KLEISNERFred J. KleisnerChairman 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.



POWER OF ATTORNEY



The undersigned directors and officers of Wyndham International, Inc. hereby
constitute and appoint Fred J. Kleisner and Richard A. Smith, and each of them, with the full power to act without the other and with full power of substitution and resubstitution, our true and lawful attorneys-in-fact and agents with full
power to execute in our name and behalf in the capacities indicated below any and all amendments to this report and to file the same, with all exhibits and other documents relating thereto, with the Securities and Exchange Commission and hereby
ratify and confirm all that such attorneys-in-fact, or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.



|                                          |  |                                                                                                   |  |              
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | -------------
|Signature                                 |  | Capacities in which signed                                                                        |  | Date         
|                                          |  |                                                                                                  
|/s/    FRED J.
KLEISNERFred
J. Kleisner   |  | Chairman of the Board and Chief Executive Officer (principal executive officer)                   |  | March 8, 2004
|                                          |  |                                                                                                  
|/s/    THEODORE
TENGTheodore Teng         |  | President and Chief Operating Officer                                                             |  | March 8, 2004
|                                          |  |                                                                                                  
|/s/    RICHARD A.
SMITHRichard A.
Smith   |  | Executive Vice President and Chief Financial Officer (principal financial and accounting officer) |  | March 8, 2004
|                                          |  |                                                                                                  
|/s/    KARIM
ALIBHAIKarim
Alibhai         |  | Director                                                                                          |  | March 8, 2004
|                                          |  |                                                                                                  
|/s/    MARC A.
BEILINSONMarc A.
Beilinson |  | Director                                                                                          |  | March 8, 2004
|                                          |  |                                                                                                  
|/s/    LEONARD
BOXERLeonard
Boxer         |  | Director                                                                                          |  | March 8, 2004



52



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##### Index to Financial Statements

|                                            |  |                            |  |              
|------------------------------------------- |  | -------------------------- |  | -------------
|Signature                                   |  | Capacities in which signed |  | Date         
|                                            |  |                           
|/s/    LEON D.
BLACKLeon D.
Black           |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    ADELA
CEPEDAAdela
Cepeda             |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    MILTON
FINEMilton Fine               |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    PAUL
FRIBOURGPaul
Fribourg           |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    THOMAS H.
LEEThomas H. Lee           |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    ALAN M.
LEVENTHALAlan M.
Leventhal   |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    WILLIAM
MACKWilliam Mack             |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    LEE S.
NEIBERTLee S.
Neibert         |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    MARC J.
ROWANMarc J.
Rowan           |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    ROLF E.
RUHFUSRolf E.
Ruhfus         |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    SCOTT A.
SCHOENScott A.
Schoen       |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    SCOTT M.
SPERLINGScott M.
Sperling   |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    LYNN C.
SWANNLynn C.
Swann           |  | Director                   |  | March 8, 2004
|                                            |  |                           
|/s/    SHERWOOD M.
WEISERSherwood M.
Weiser |  | Director                   |  | March 8, 2004



53



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WYNDHAM INTERNATIONAL, INC.



INDEX
TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES



HISTORICAL FINANCIAL INFORMATION



|                                                                                                    |  |     
|--------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                    |  | Page
|Wyndham International, Inc.:                                                                        |  |     
|Report of Independent AuditorsPricewaterhouseCoopers LLP                                           |  | F-2 
|Consolidated Balance Sheets as of December 31, 2003 and 2002                                        |  | F-3 
|Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001.         |  | F-4 
|Consolidated Statements of Shareholders Equity for the years ended December 31, 2003,2002 and 2001 |  | F-5 
|Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001          |  | F-6 
|Notes to Consolidated Financial Statements                                                          |  | F-7 
|Financial Statement Schedules:                                                                      |  |     
|Schedule IIValuation and Qualifying Accounts                                                       |  | F-41
|Schedule IIIReal Estate and Accumulated Depreciation                                               |  | F-42



F-1



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##### Index to Financial Statements

REPORT OF INDEPENDENT AUDITORS



Board of Directors
and Shareholders

Wyndham International, Inc.



In our opinion, the consolidated financial statements listed in the index appearing on page F-1 present fairly, in all material respects, the financial
position of Wyndham International, Inc. and its subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing on page F-1 presents fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements. These financial statements and the financial statement schedules are the responsibility of Wyndham International, Inc.s management; our responsibility is to express an
opinion on these financial statements and the financial statement schedules based on our audits. We conducted our audits of these statements 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.



As discussed in Note 2 to the consolidated financial statements, effective
January 1, 2001, Wyndham International, Inc. adopted the provisions of Statement of Financial Accounting Standard (SFAS) No. 133, Accounting For Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and
No. 138 and effective January 1, 2002, Wyndham International, Inc. adopted the provisions of Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets and Statement of Financial Accounting Standard No. 144,
Accounting for the Impairment and Disposal of Long-Lived Assets.



/s/    PricewaterhouseCoopers LLP



Dallas, Texas

March 8, 2004



F-2



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)



PART I: FINANCIAL INFORMATION



ITEM 1.FINANCIAL STATEMENTS



|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ---------- | - | ---------------- | - | ---------- | -
|                                                                                                                                           |  | December 31,2003 |            |   | December 31,2002 |  
|ASSETS                                                                                                                                     |  |                  |            |   |                  |   |            |  
|Current assets:                                                                                                                            |  |                  |            |   |                  |   |            |  
|Cash and cash equivalents                                                                                                                  |  | $                | 62,441     |   |                  | $ | 37,239     |  
|Restricted cash                                                                                                                            |  |                  | 130,457    |   |                  |   | 143,839    |  
|Accounts receivable, net of allowance for doubtful accounts of $4,489 in 2003 and $5,172 in 2002                                           |  |                  | 71,077     |   |                  |   | 100,529    |  
|Inventories                                                                                                                                |  |                  | 13,680     |   |                  |   | 15,488     |  
|Prepaid expenses and other assets                                                                                                          |  |                  | 10,564     |   |                  |   | 10,008     |  
|Assets held for sale, net of accumulated depreciation of $119,868 in 2003 and $28,526 in 2002                                              |  |                  | 238,330    |   |                  |   | 77,256     |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Total current assets                                                                                                                       |  |                  | 526,549    |   |                  |   | 384,359    |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Investment in real estate and related improvements, net of accumulated depreciation of $901,779 in 2003 and $978,953 in 2002               |  |                  | 2,938,808  |   |                  |   | 3,611,456  |  
|Investment in unconsolidated subsidiaries                                                                                                  |  |                  | 48,252     |   |                  |   | 61,631     |  
|Notes and other receivables                                                                                                                |  |                  | 43,320     |   |                  |   | 41,240     |  
|Management contract costs, net of accumulated amortization $20,204 in 2003 and $20,082 in 2002                                             |  |                  | 79,014     |   |                  |   | 83,983     |  
|Leasehold costs, net of accumulated amortization of $32 in 2003 and $38,764 in 2002                                                        |  |                  | 572        |   |                  |   | 102,250    |  
|Trade names, net of accumulated amortization of $37,123 in 2003 and $30,396 in 2002                                                        |  |                  | 86,743     |   |                  |   | 93,499     |  
|Deferred acquisition costs                                                                                                                 |  |                  | 4,459      |   |                  |   | 3,111      |  
|Deferred expenses, net of accumulated amortization of $73,758 in 2003 and $64,441 in 2002                                                  |  |                  | 49,267     |   |                  |   | 52,008     |  
|Other assets                                                                                                                               |  |                  | 6,143      |   |                  |   | 39,921     |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Total assets                                                                                                                               |  | $                | 3,783,127  |   |                  | $ | 4,473,458  |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                       |  |                  |            |   |                  |   |            |  
|Current liabilities:                                                                                                                       |  |                  |            |   |                  |   |            |  
|Trade accounts payable                                                                                                                     |  | $                | 28,609     |   |                  | $ | 29,153     |  
|Accrued payroll costs                                                                                                                      |  |                  | 45,866     |   |                  |   | 48,198     |  
|Dividends payable                                                                                                                          |  |                  | 73,100     |   |                  |   | 43,872     |  
|Accrued insurance and property taxes                                                                                                       |  |                  | 40,559     |   |                  |   | 40,331     |  
|Other accrued expenses                                                                                                                     |  |                  | 61,875     |   |                  |   | 73,892     |  
|Advance deposits                                                                                                                           |  |                  | 33,006     |   |                  |   | 31,252     |  
|Borrowings associated with assets held for sale                                                                                            |  |                  | 118,133    |   |                  |   | 45,835     |  
|Current portion of borrowings under credit facility, term loans, mortgage notes and capital lease obligations                              |  |                  | 292,661    |   |                  |   | 385,786    |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Total current liabilities                                                                                                                  |  |                  | 693,809    |   |                  |   | 698,319    |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Borrowings under credit facility, term loans, mortgage notes and capital lease obligations                                                 |  |                  | 2,271,165  |   |                  |   | 2,394,922  |  
|Derivative financial instruments                                                                                                           |  |                  | 56,760     |   |                  |   | 92,814     |  
|Deferred income taxes                                                                                                                      |  |                  | 39,999     |   |                  |   | 156,070    |  
|Deferred income                                                                                                                            |  |                  | 10,051     |   |                  |   | 9,068      |  
|Minority interest in the Operating Partnerships                                                                                            |  |                  | 21,289     |   |                  |   | 21,368     |  
|Minority interest in other consolidated subsidiaries                                                                                       |  |                  | 39,981     |   |                  |   | 38,518     |  
|Commitments and contingencies                                                                                                              |  |                  |            |   |                  |   |            |  
|Shareholders equity:                                                                                                                      |  |                  |            |   |                  |   |            |  
|Preferred stock, $0.01 par value; authorized: 150,000,000 shares; shares issued and outstanding: 14,423,151 in 2003 and 13,170,620 in
2002 |  |                  | 144        |   |                  |   | 132        |  
|Common stock, $0.01 par value; authorized: 750,000,000 shares; shares issued and outstanding: 168,238,102 in 2003 and 167,999,126 in
2002  |  |                  | 1,682      |   |                  |   | 1,680      |  
|Additional paid in capital                                                                                                                 |  |                  | 4,166,227  |   |                  |   | 4,039,656  |  
|Receivables from shareholders and affiliates                                                                                               |  |                  | (18,121    | ) |                  |   | (18,121    | )
|Accumulated other comprehensive income                                                                                                     |  |                  | (8,918     | ) |                  |   | (15,221    | )
|Accumulated deficit                                                                                                                        |  |                  | (3,490,941 | ) |                  |   | (2,945,747 | )
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Total shareholders equity                                                                                                                 |  |                  | 650,073    |   |                  |   | 1,062,379  |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  
|Total liabilities and shareholders equity                                                                                                 |  | $                | 3,783,127  |   |                  | $ | 4,473,458  |  
|                                                                                                                                           |  |                  |            |   |                  |   |            |  



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



F-3



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)



|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|-------------------------------------------------------------------------- |  | ------------------------ | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                           |  | Years Ended December 31, |          
|                                                                           |  | 2003                     |           |   | 2002 |   |           | 2001 | 
|Revenues:                                                                  |  |                          |           |   |      |   |           |      |  |   |           |  
|Room revenues                                                              |  | $                        | 716,086   |   |      | $ | 750,909   |      |  | $ | 839,141   |  
|Food and beverage revenues                                                 |  |                          | 377,173   |   |      |   | 394,795   |      |  |   | 416,097   |  
|Other hotel revenues                                                       |  |                          | 160,477   |   |      |   | 181,401   |      |  |   | 195,412   |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Total hotel revenues                                                       |  |                          | 1,253,736 |   |      |   | 1,327,105 |      |  |   | 1,450,650 |  
|Management fee and service fee income                                      |  |                          | 17,479    |   |      |   | 17,639    |      |  |   | 20,240    |  
|Interest and other income                                                  |  |                          | 6,335     |   |      |   | 7,056     |      |  |   | 10,256    |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Total revenues                                                             |  |                          | 1,277,550 |   |      |   | 1,351,800 |      |  |   | 1,481,146 |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Expenses:                                                                  |  |                          |           |   |      |   |           |      |  |   |           |  
|Room expenses                                                              |  |                          | 184,154   |   |      |   | 189,174   |      |  |   | 200,177   |  
|Food and beverage expenses                                                 |  |                          | 261,815   |   |      |   | 276,812   |      |  |   | 295,697   |  
|Other hotel expenses                                                       |  |                          | 520,396   |   |      |   | 545,626   |      |  |   | 567,079   |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Total hotel expenses                                                       |  |                          | 966,365   |   |      |   | 1,011,612 |      |  |   | 1,062,953 |  
|General and administrative                                                 |  |                          | 63,078    |   |      |   | 73,523    |      |  |   | 94,647    |  
|Bond offering cancellation costs                                           |  |                          |          |   |      |   | 3,750     |      |  |   |          |  
|Interest expense                                                           |  |                          | 183,729   |   |      |   | 211,363   |      |  |   | 276,214   |  
|Termination of management, leasehold and license agreements                |  |                          | 1,946     |   |      |   | 6,445     |      |  |   | 16,466    |  
|Loss (gain) on sale of assets                                              |  |                          | 4,937     |   |      |   | (10,701   | )    |  |   | 11,202    |  
|Loss on derivative financial instruments                                   |  |                          | 22,193    |   |      |   | 84,844    |      |  |   | 47,600    |  
|Impairment loss on assets                                                  |  |                          | 27,784    |   |      |   | 162       |      |  |   | 24,159    |  
|Depreciation and amortization                                              |  |                          | 201,113   |   |      |   | 212,984   |      |  |   | 207,971   |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Total expenses                                                             |  |                          | 1,471,145 |   |      |   | 1,593,982 |      |  |   | 1,741,212 |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Operating loss from continuing operations                                  |  |                          | (193,595  | ) |      |   | (242,182  | )    |  |   | (260,066  | )
|Equity in earnings of unconsolidated subsidiaries                          |  |                          | 2,486     |   |      |   | 1,039     |      |  |   | 3,500     |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Loss from continuing operations before income taxes and minority interests |  |                          | (191,109  | ) |      |   | (241,143  | )    |  |   | (256,566  | )
|Income tax benefit                                                         |  |                          | 41,098    |   |      |   | 97,560    |      |  |   | 110,460   |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Loss from continuing operations before minority interests                  |  |                          | (150,011  | ) |      |   | (143,583  | )    |  |   | (146,106  | )
|Minority interest in consolidated subsidiaries                             |  |                          | (1,725    | ) |      |   | (258      | )    |  |   | (6,657    | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Loss from continuing operations                                            |  |                          | (151,736  | ) |      |   | (143,841  | )    |  |   | (152,763  | )
|Discontinued operations:                                                   |  |                          |           |   |      |   |           |      |  |   |           |  
|(Loss) income from operations of discontinued hotels. .                    |  |                          | (30,779   | ) |      |   | (30,877   | )    |  |   | 38,210    |  
|Impairment loss                                                            |  |                          | (137,619  | ) |      |   | (37,851   | )    |  |   |          |  
|HPT leasehold termination                                                  |  |                          | (153,909  | ) |      |   |          |      |  |   |          |  
|Gain (loss) on sale of assets                                              |  |                          | 9,489     |   |      |   | (17,342   | )    |  |   |          |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|(Loss) income from discontinued operations before income taxes             |  |                          | (312,818  | ) |      |   | (86,070   | )    |  |   | 38,210    |  
|Income tax benefit (provision) from discontinued operations                |  |                          | 74,942    |   |      |   | 31,587    |      |  |   | (14,022   | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|(Loss) income from discontinued operations                                 |  |                          | (237,876  | ) |      |   | (54,483   | )    |  |   | 24,188    |  
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Loss before accounting change                                              |  |                          | (389,612  | ) |      |   | (198,324  | )    |  |   | (128,575  | )
|Cumulative effect of change in accounting principle, net of taxes          |  |                          |          |   |      |   | (324,102  | )    |  |   | (10,365   | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Net loss                                                                   |  | $                        | (389,612  | ) |      | $ | (522,426  | )    |  | $ | (138,940  | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Net loss attributable to common shareholders:                              |  |                          |           |   |      |   |           |      |  |   |           |  
|Net loss                                                                   |  | $                        | (389,612  | ) |      | $ | (522,426  | )    |  | $ | (138,940  | )
|Preferred stock dividends                                                  |  |                          | (155,586  | ) |      |   | (144,217  | )    |  |   | (122,621  | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Net loss attributable to common shareholders                               |  | $                        | (545,198  | ) |      | $ | (666,643  | )    |  | $ | (261,561  | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Basic and diluted loss per common share:                                   |  |                          |           |   |      |   |           |      |  |   |           |  
|Loss from continuing operations                                            |  | $                        | (1.83     | ) |      | $ | (1.72     | )    |  | $ | (1.64     | )
|(Loss) income from discontinued operations, net of taxes                   |  |                          | (1.41     | ) |      |   | (0.32     | )    |  |   | 0.14      |  
|Cumulative effect of change in accounting principle, net of taxes          |  |                          |          |   |      |   | (1.93     | )    |  |   | (0.06     | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  
|Net loss per common share                                                  |  | $                        | (3.24     | ) |      | $ | (3.97     | )    |  | $ | (1.56     | )
|                                                                           |  |                          |           |   |      |   |           |      |  |   |           |  



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



F-4



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(in thousands, except per share amounts)



|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|--------------------------------------------------------------------- |  | --------------- | - | ------------ | --------- | --- | ---------------- | ----------- | ----------------------- | - | ------------------------ | --------------------------------------------- | ---------------------------------------- | --------- | ---------------------------------------- | ------------------------------------------- | ------- | - | -------------------------------------- | - | ---------- | ----- |  | - | ---- | - |  | - | ------- | - |  | - | ------ | - |  | - | --------- | -
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   | AdditionalPaid inCapital |                                               | ReceivablesFromShareholdersandAffiliates |           |                                          | AccumulatedDeficit andDividendDistributions |         |   | Accumulated Other Comprehensive Income |   |            | Total | 
|                                                                      |  | Preferred Stock |   | Common Stock |           |     |                  |             | ForeignCurrencyExchange |   |                          | Unrealized(Loss) Gainon DerivativeInstruments |                                          |           | UnrealizedLoss onSecuritiesHeld for Sale |                                             |        
|                                                                      |  | Numberof Shares |   |              | Par Value |     | Number of Shares |             | Par Value               |   |                          |                                               |                                          |           |                                          |                                            
|Balance as of December 31, 2000                                       |  | 11,087,390      |   |              | $         | 111 |                  | 167,416,376 |                         | $ | 1,674                    |                                               | $                                        | 3,828,900 |                                          | $                                           | (17,161 | ) |                                        | $ | (2,018,526 | )     |  | $ | (164 | ) |  |   |        |   |  | $ | (647   | ) |  | $ | 1,794,187 |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Issuance of shares net of offering expenses                           |  |                |   |              |           |    |                  | 429,719     |                         |   | 4                        |                                               |                                          | 1,982     |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   | 1,986     |  
|Redemption of Preferred A stock                                       |  | (158            | ) |              |           |    |                  | 1,845       |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|Accrued interest on notes receivable from shareholders and affiliates |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             | (960    | ) |                                        |   | 982        |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   | 22        |  
|Net loss                                                              |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (138,940   | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (138,940  | )
|Foreign currency translation adjustment                               |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   | 198  |   |  |   |        |   |  |   |       |   |  |   | 198       |  
|Unrealized loss on derivative instruments                             |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   | (28,337 | ) |  |   |       |   |  |   | (28,337   | )
|Unrealized loss on securities held for sale                           |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   | (57    | ) |  |   | (57       | )
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Comprehensive income                                                  |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   | (167,136  | )
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Cash dividends                                                        |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (40,838    | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (40,838   | )
|Stock dividends                                                       |  | 817,828         |   |              |           | 8   |                  |            |                         |   |                         |                                               |                                          | 81,774    |                                          |                                             |        |   |                                        |   | (81,782    | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Balance as of December 31, 2001                                       |  | 11,905,060      |   |              | $         | 119 |                  | 167,847,940 |                         | $ | 1,678                    |                                               | $                                        | 3,912,656 |                                          | $                                           | (18,121 | ) |                                        | $ | (2,279,104 | )     |  | $ | 34   |   |  | $ | (28,337 | ) |  | $ | (704   | ) |  | $ | 1,588,221 |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Issuance of shares net of offering expenses                           |  |                |   |              |           |    |                  | 150,858     |                         |   | 2                        |                                               |                                          | 454       |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   | 456       |  
|Redemption of Preferred A stock                                       |  | (28             | ) |              |           |    |                  | 328         |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|Net loss                                                              |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (522,426   | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (522,426  | )
|Foreign currency translation adjustment                               |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   | (93  | ) |  |   |        |   |  |   |       |   |  |   | (93       | )
|Unrealized gain on derivative instruments                             |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   | 14,315  |   |  |   |       |   |  |   | 14,315    |  
|Unrealized loss on securities held for sale                           |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   | (436   | ) |  |   | (436      | )
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Comprehensive income                                                  |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   | (508,640  | )
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Cash dividends                                                        |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (17,658    | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (17,658   | )
|Stock dividends                                                       |  | 1,265,588       |   |              |           | 13  |                  |            |                         |   |                         |                                               |                                          | 126,546   |                                          |                                             |        |   |                                        |   | (126,559   | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Balance as of December 31, 2002                                       |  | 13,170,620      |   |              | $         | 132 |                  | 167,999,126 |                         | $ | 1,680                    |                                               | $                                        | 4,039,656 |                                          | $                                           | (18,121 | ) |                                        | $ | (2,945,747 | )     |  | $ | (59  | ) |  | $ | (14,022 | ) |  | $ | (1,140 | ) |  | $ | 1,062,379 |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Issuance of shares net of offering expenses                           |  |                |   |              |           |    |                  | 110,425     |                         |   | 2                        |                                               |                                          | 228       |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   | 230       |  
|Redemption of Preferred A stock                                       |  | (11,025         | ) |              |           |    |                  | 128,551     |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|Net loss                                                              |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (389,612   | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (389,612  | )
|Foreign currency translation adjustment                               |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   | (34  | ) |  |   |        |   |  |   |       |   |  |   | (34       | )
|Unrealized gain on derivative instruments                             |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   | 5,118   |   |  |   |       |   |  |   | 5,118     |  
|Transfer unrealized loss on securities held for sale to realized loss |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   |           |       |  |   |     |   |  |   |        |   |  |   | 1,219  |   |  |   | 1,219     |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Comprehensive income                                                  |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   | (383,309  | )
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Cash dividends                                                        |  |                |   |              |           |    |                  |            |                         |   |                         |                                               |                                          |          |                                          |                                             |        |   |                                        |   | (29,227    | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   | (29,227   | )
|Stock dividends                                                       |  | 1,263,556       |   |              |           | 12  |                  |            |                         |   |                         |                                               |                                          | 126,343   |                                          |                                             |        |   |                                        |   | (126,355   | )     |  |   |     |   |  |   |        |   |  |   |       |   |  |   |          |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  
|Balance as of December 31, 2003                                       |  | 14,423,151      |   |              | $         | 144 |                  | 168,238,102 |                         | $ | 1,682                    |                                               | $                                        | 4,166,227 |                                          | $                                           | (18,121 | ) |                                        | $ | (3,490,941 | )     |  | $ | (93  | ) |  | $ | (8,904  | ) |  | $ | 79     |   |  | $ | 650,073   |  
|                                                                      |  |                 |   |              |           |     |                  |             |                         |   |                          |                                               |                                          |           |                                          |                                             |         |   |                                        |   |            |       |  |   |      |   |  |   |         |   |  |   |        |   |  |   |           |  

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



F-5



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|---------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                         |  | Years Ended December 31, |         
|                                                                                         |  | 2003                     |          |   | 2002 |   |          | 2001 | 
|Cash flows from operating activities:                                                    |  |                          |          |   |      |   |          |      |  |   |          |  
|Net loss                                                                                 |  | $                        | (389,612 | ) |      | $ | (522,426 | )    |  | $ | (138,940 | )
|Adjustments to reconcile net loss to net cash provided by operating activities:          |  |                          |          |   |      |   |          |      |  |   |          |  
|Depreciation and amortization                                                            |  |                          | 225,713  |   |      |   | 288,150  |      |  |   | 254,209  |  
|Amortization of deferred compensation                                                    |  |                          | 2,480    |   |      |   | 3,363    |      |  |   | 2,104    |  
|Amortization of deferred loan costs                                                      |  |                          | 31,247   |   |      |   | 25,522   |      |  |   | 22,017   |  
|(Gain) loss on sale of assets                                                            |  |                          | (4,552   | ) |      |   | 6,641    |      |  |   | 11,202   |  
|Impairment loss on assets                                                                |  |                          | 165,403  |   |      |   | 38,013   |      |  |   | 24,159   |  
|Write-off of intangible assets                                                           |  |                          | 156,377  |   |      |   | 6,445    |      |  |   | 12,883   |  
|Write-off of deferred acquisition costs                                                  |  |                          | 335      |   |      |   | 2,574    |      |  |   | 1,904    |  
|Provision for bad debt expense                                                           |  |                          | 6,453    |   |      |   | 6,539    |      |  |   | 6,994    |  
|(Gain) loss on derivative financial instruments                                          |  |                          | (26,970  | ) |      |   | 43,182   |      |  |   | 47,600   |  
|Equity in earnings of unconsolidated subsidiaries                                        |  |                          | (2,486   | ) |      |   | (1,039   | )    |  |   | (3,500   | )
|Minority interest in consolidated subsidiaries                                           |  |                          | 3,040    |   |      |   | 955      |      |  |   | 10,060   |  
|Deferred income taxes                                                                    |  |                          | (120,505 | ) |      |   | (143,581 | )    |  |   | (112,785 | )
|Cumulative effect of change in accounting principle                                      |  |                          |         |   |      |   | 324,102  |      |  |   | 10,365   |  
|Write-off of loan costs                                                                  |  |                          |         |   |      |   |         |      |  |   | 1,838    |  
|Changes in assets and liabilities:                                                       |  |                          |          |   |      |   |          |      |  |   |          |  
|Accounts receivable                                                                      |  |                          | 24,587   |   |      |   | 18,225   |      |  |   | 60,014   |  
|Prepaid expenses and other assets                                                        |  |                          | 1,220    |   |      |   | 7,291    |      |  |   | 3,311    |  
|Deferred income                                                                          |  |                          | 818      |   |      |   | 787      |      |  |   | (517     | )
|Accounts payable and accrued expenses                                                    |  |                          | (10,939  | ) |      |   | (28,235  | )    |  |   | (54,559  | )
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash provided by operating activities                                                |  |                          | 62,609   |   |      |   | 76,508   |      |  |   | 158,359  |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash flows from investing activities:                                                    |  |                          |          |   |      |   |          |      |  |   |          |  
|Acquisition of hotel properties and related working capital assets, net of cash acquired |  |                          | (19,993  | ) |      |   |         |      |  |   |         |  
|Improvements and additions to hotel properties                                           |  |                          | (59,591  | ) |      |   | (79,916  | )    |  |   | (213,610 | )
|Proceeds from sale of assets                                                             |  |                          | 223,760  |   |      |   | 555,604  |      |  |   | 130,655  |  
|Acquisition of management contracts                                                      |  |                          | (3,793   | ) |      |   | (497     | )    |  |   | (1,001   | )
|Change in restricted cash accounts                                                       |  |                          | 6,295    |   |      |   | (57,907  | )    |  |   | 12,138   |  
|Change in other assets                                                                   |  |                          | (90      | ) |      |   |         |      |  |   | 3,585    |  
|Collection on other notes receivable                                                     |  |                          | 522      |   |      |   | 6,603    |      |  |   | 6,278    |  
|Advances on other notes receivable                                                       |  |                          | (8,424   | ) |      |   | (2,518   | )    |  |   | (2,684   | )
|Deferred acquisition costs                                                               |  |                          | (2,136   | ) |      |   | (1,252   | )    |  |   | (3,937   | )
|Investment in unconsolidated subsidiaries                                                |  |                          | (3       | ) |      |   | (361     | )    |  |   | (1,956   | )
|Distributions from unconsolidated subsidiaries                                           |  |                          | 650      |   |      |   | 5,936    |      |  |   | 7,105    |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) investing activities                                      |  |                          | 137,197  |   |      |   | 425,692  |      |  |   | (63,427  | )
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash flows from financing activities:                                                    |  |                          |          |   |      |   |          |      |  |   |          |  
|Borrowings under line of credit facility and other debt                                  |  |                          | 554,500  |   |      |   | 82,000   |      |  |   | 580,500  |  
|Repayments of borrowings under credit facility and other debt                            |  |                          | (700,244 | ) |      |   | (689,090 | )    |  |   | (535,419 | )
|Payment of deferred loan costs                                                           |  |                          | (27,891  | ) |      |   | (15,743  | )    |  |   | (6,394   | )
|Contributions received from minority interest in consolidated subsidiaries               |  |                          |         |   |      |   | 1,601    |      |  |   | 300      |  
|Distribution made to minority interest in other partnerships                             |  |                          | (899     | ) |      |   | (9,667   | )    |  |   | (6,209   | )
|Dividends and distributions paid                                                         |  |                          |         |   |      |   |         |      |  |   | (14,624  | )
|Other                                                                                    |  |                          | (67      | ) |      |   | (73      | )    |  |   | (20      | )
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash (used in) provided by financing activities                                      |  |                          | (174,601 | ) |      |   | (630,972 | )    |  |   | 18,134   |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Foreign currency translation adjustment                                                  |  |                          | (3       | ) |      |   | 309      |      |  |   | 176      |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                          | 25,202   |   |      |   | (128,463 | )    |  |   | 113,242  |  
|Cash and cash equivalents at beginning of year                                           |  |                          | 37,239   |   |      |   | 165,702  |      |  |   | 52,460   |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash and cash equivalents at end of year                                                 |  | $                        | 62,441   |   |      | $ | 37,239   |      |  | $ | 165,702  |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Supplemental disclosure of cash flow information:                                        |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash paid during the year for interest                                                   |  | $                        | 169,615  |   |      | $ | 216,981  |      |  | $ | 304,160  |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash paid during the year for income taxes                                               |  | $                        | 13,445   |   |      | $ | 14,462   |      |  | $ | 4,207    |  
|                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  



See Note 14 for
additional supplemental disclosure of cash flow information.



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



F-6



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##### Table of Contents

##### Index to Financial Statements

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 upper 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
owners/operators. As of December 31, 2003, Wyndham owned interests in 93 hotels with over 28,200 guestrooms and leased 10 hotels from third parties with over 1,500 guestrooms. In addition, Wyndham managed 27 hotels for third party owners with over
7,700 guestrooms, franchised 53 hotels with over 11,100 guestrooms and has a strategic alliance with a third party for 7 hotels with over 2,300 rooms.



Wyndham 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.



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. Also, in January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46) which requires a variable
interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entitys activities or entitled to receive a majority of the entitys residual returns or both. FIN 46
has been deferred to the first quarter of 2004 for variable interest entities that existed prior to February 1, 2003. The Company has not formed any variable interest entities subsequent to February 1, 2003 and accordingly, has only adopted the
disclosure requirements of FIN 46 as of December 31, 2003.



Corporations and Limited Liability CompaniesThe condition for control is the ownership of a majority voting interest. Also, FASB issued FIN 46 which requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest entitys activities or entitled to receive a majority of the entitys residual returns or both. FIN 46 has been deferred to the first quarter of 2004 for
variable interest entities that existed prior to February 1, 2003. The Company has not formed any variable interest entities subsequent to February 1, 2003 and accordingly, has only adopted the disclosure requirements of FIN 46 as of December 31,
2003.



Critical Accounting Policies and
EstimatesThe preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to: impairment of assets; assets held for sale; bad debts; income taxes; insurance reserves; derivatives; and contingencies and litigation. The
Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.



F-7



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



The Company believes the following critical accounting policies affect its more significant judgments
and estimates used in the preparation of its consolidated financial statements. The Company periodically reviews the carrying value of its assets, including intangible assets, to determine if events and circumstances exist indicating that assets
might be impaired. If facts and circumstances support this possibility of impairment, management will prepare undiscounted and discounted cash flow projections which require judgments that are both subjective and complex.



The Companys management uses its judgment in projecting which assets
will be sold by the Company within the next twelve months. These judgments are based on managements knowledge of the current market and the status of current negotiations with third parties. If assets are expected to be sold within 12 months,
they are reclassified as assets held for sale on the balance sheet.



The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Companys customers were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required.



The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the need for the valuation allowance, in the event the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment
to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its recorded deferred tax assets in the future, an adjustment to
the deferred tax assets would be charged to income in the period such determination was made.



The Company maintains a paid loss deductible insurance plan for commercial general liability, automobile liability, and workers compensation loss exposures related to the hotel operations. The primary loss
deductible retention limit is currently $500 per occurrence for general liability and $250 per occurrence for automobile liability and workers compensation loss, in most jurisdictions. The estimates of the ultimate liability for losses and
associated expenses are based upon a third party actuarial analysis and projection of actual historical development trends of loss frequency, severity and incurred but not reported claims as well as traditional issues that affect loss cost such as
medical and statutory benefit inflation. In addition, the actuarial analysis compares our trends against general insurance industry development trends to develop an estimate of ultimate costs within the deductible retention. Large claims or
incidents that could potentially involve material amounts are also monitored closely on a case-by-case basis. As of December 31, 2003, the Companys balance sheet included an estimated liability with respect to this self-insurance program of
$26,617.



The Companys objective in using derivatives is
to add stability to interest expense and to manage its exposure to interest rate movements. During the year ended December 31, 2003, such derivatives were used to hedge the variable cash flows associated with a portion of the Companys
variable-rate debt. As of December 31, 2003, the Company did not have any derivatives designated as fair value hedges. Additionally, the Company does not use derivatives for trading or speculative purposes. The Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each balance sheet date to determine the fair value of the derivative instruments. For the majority of financial instruments including most derivatives, standard market
conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost, and termination cost are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and
such value may never actually be realized. Future cash inflows or outflows from the derivative instruments depend upon future borrowing rates. If assumptions about future borrowing rates prove to be materially incorrect, the recorded value of these
agreements could also prove to be



F-8



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



materially incorrect. Because the Company uses the derivative instruments to reduce its exposure to increases in variable interest rates, thus effectively
fixing a portion of its variable interest rates, the impact of changes in future borrowing rates could result in interest expense being either higher or lower than might otherwise have been incurred on the variable-rate borrowings had the rates not
been fixed. A reduction in interest rates could result in a competitive advantage for companies in a position to take advantage of a lower cost of capital.



The Company is a defendant in lawsuits that arise out of, and are incidental to, the conduct of its business. Management uses judgment, with the aid of
legal counsel, to record accruals for losses that the Company considers to be probable and that can be reasonably estimated, as a result of any pending actions against the Company.



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 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 $3,852 was capitalized in 2001. No interest was capitalized in 2003 and 2002 as there were no substantial hotel renovations.



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 fair value and the carrying amount of the asset. When management identifies an asset held for sale, the Company estimates the net selling price of such asset. If 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 $163,363, $38,013 and $24,159 for the years ended December 31,
2003, 2002 and 2001, 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. Included in restricted cash at December 31, 2003 is $25,892 of net proceeds received from the sale of Marriott Philadelphia West that was part of a portfolio of thirteen hotels sold in 2002. The $25,892 will be used to
make payments on such debt, refinance all or any portion of the debt and/or extend maturities and amortization payments in accordance with the credit facilities.



F-9



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Inventories



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



Investment in Unconsolidated Subsidiaries



The Companys investment in unconsolidated
subsidiaries includes investments in five 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 for under the cost method.



Our investment in unconsolidated subsidiaries is periodically reviewed for
other than temporary declines in market value. For any decline that is considered other than temporary, an impairment is recorded as a reduction in the carrying value of the investment. Estimated fair values are based on projections of cash flows
and market capitalization rates.



Intangibles



Goodwill was recognized in connection with the
acquisition of certain businesses and was amortized utilizing the straight-line method over a period of 10 to 40 years. However, on January 1, 2002, the Company completed the two step process prescribed by SFAS 142 Goodwill and Other
Intangible Assets for (1) testing for impairment and (2) determining the amount of impairment loss related to goodwill associated with the reporting unit. Accordingly, in January 2002, the Company recorded an impairment charge of $324,102 as a
cumulative effect of a change in accounting principle. In connection with the adoption of SFAS 142, the Company did not record $12,136 of amortization in 2002, and will not be recording $12,136 of amortization annually. Upon implementation of SFAS
142, the Company identified finite lived intangible assets related to its trade names and determined that there was no indication of impairment on these finite lived intangible assets.



The costs associated with the acquisition of management contracts and trade names 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 2003, 2002 and 2001, the Company recognized a charge for the remaining unamortized cost of management
contracts lost of $1,946, $6,445 and $7,408, respectively. Amortization of trade names costs is computed using the straight-line method over the estimated useful life of 20 years.



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. During 2003 and 2001, the Company recognized a charge for the remaining unamortized cost of leasehold
contracts lost of $153,909 and $4,057, respectively. In addition, the Company took an impairment charge of $22,000 for the remaining book value of the leasehold costs associated with leases on six Summerfield Suites by Wyndham that were terminated in March 2004 (see Subsequent
Event footnote).



F-10



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



The Companys intangible assets are as follows:



|                              |  |                         |         |                         |   |         |  
|----------------------------- |  | ----------------------- | ------- | ----------------------- | - | ------- | -
|                              |  | As of December 31, 2003 |        
|                              |  | GrossCarryingAmount     |         | AccumulatedAmortization |  
|Amortized intangible assets   |  |                         |         |                         |   |         |  
|Management contract costs     |  | $                       | 99,218  |                         | $ | (20,204 | )
|                              |  |                        
|Leasehold costs               |  |                         | 604     |                         |   | (32     | )
|                              |  |                        
|Trade name costs              |  |                         | 123,866 |                         |   | (37,123 | )
|                              |  |                         |         |                         |   |         |  
|Total                         |  | $                       | 223,688 |                         | $ | (57,359 | )
|                              |  |                         |         |                         |   |         |  
|Unamortized intangible assets |  |                         |         |                         |   |         |  
|Goodwill                      |  | $                       | 391     |                         |   |         |  
|                              |  |                         |         |                         |   |         |  



The aggregate
amortization expense for the year ended December 31, 2003 was $16,523.



The estimated amortization expense for the following five years is as follows:



|     |  |   |       
|---- |  | - | ------
|2004 |  | $ | 12,185
|2005 |  | $ | 12,081
|2006 |  | $ | 12,076
|2007 |  | $ | 11,441
|2008 |  | $ | 11,372



The Company reviews
the carrying value of its intangible assets with finite lives including management contracts and leasehold costs whenever events or changes in circumstances arise that indicate the carrying amount of the asset may not be recoverable. If
circumstances indicate that the carrying amount of an asset that the Company expects to hold and use may not be recoverable, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition.
Future cash flows are the future cash inflows expected to be generated by an asset less the future cash outflows expected to be necessary to obtain those inflows. If the sum of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, the Company recognizes an impairment loss as the amount by which the carrying amount of the asset exceeds its fair value. In addition, the Company periodically evaluates the remaining useful
lives of its intangible assets to determine whether events or circumstances indicate that a revision of the remaining amortization period is warranted.



Deferred Expenses



Deferred expenses consist of the following:



|                               |  |              |         |   |      |   |         |  
|------------------------------ |  | ------------ | ------- | - | ---- | - | ------- | -
|                               |  | December 31, |        
|                               |  | 2003         |         |   | 2002 |  
|Deferred loan costs            |  | $            | 118,991 |   |      | $ | 112,716 |  
|Franchise fees                 |  |              | 865     |   |      |   | 963     |  
|Other                          |  |              | 3,169   |   |      |   | 2,770   |  
|                               |  |              |         |   |      |   |         |  
|                               |  |              | 123,025 |   |      |   | 116,449 |  
|Less: accumulated amortization |  |              | (73,758 | ) |      |   | (64,441 | )
|                               |  |              |         |   |      |   |         |  
|                               |  | $            | 49,267  |   |      | $ | 52,008  |  
|                               |  |              |         |   |      |   |         |  



F-11



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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 two to ten years. Franchise costs are amortized using the straight-line method over the terms of the related franchise agreements.



Other Assets



Security deposits paid in connection with certain leasehold agreements of
approximately $38,897 are included in long-term other assets as of December 31, 2002. These leasehold agreements were terminated on May 12, 2003 and the related security deposits were forfeited.



Advance 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 11).



Minority Interest in the Operating Partnerships



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



Minority Interest in Other 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 are included in the consolidated financial statements of the Company.



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 and convertible
preferred shares (see Note 6).



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



F-12



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



continue to do so. At December 31, 2003, no stock-based employee compensation cost is charged to earnings for options, as all options granted under those
plans had an exercise price equal to the market value of the underlying common stock on the date of grant. Had compensation cost for the Companys stock option-based compensation plans been determined based on the fair value at the grant dates
for awards under the plans consistent with the method pursuant to SFAS No. 123, Accounting for Stock-Based Compensation, the Companys net loss and loss per common share would have increased to the pro forma amounts indicated below:



|                                                                                                                                            |  |              |          |   |      |   |          |      |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                                                                            |  | December 31, |         
|                                                                                                                                            |  | 2003         |          |   | 2002 |   |          | 2001 | 
|Net loss attributable to common shareholders, as reported                                                                                   |  | $            | (545,198 | ) |      | $ | (666,643 | )    |  | $ | (261,561 | )
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |              | (355     | ) |      |   | (525     | )    |  |   | (2,923   | )
|                                                                                                                                            |  |              |          |   |      |   |          |      |  |   |          |  
|Pro forma net loss attributable to common shareholders                                                                                      |  | $            | (545,553 | ) |      | $ | (667,168 | )    |  | $ | (264,484 | )
|                                                                                                                                            |  |              |          |   |      |   |          |      |  |   |          |  
|Earnings per share:                                                                                                                         |  |              |          |   |      |   |          |      |  |   |          |  
|Basic and diluted loss per common shareas reported                                                                                         |  | $            | (3.24    | ) |      | $ | (3.97    | )    |  | $ | (1.56    | )
|Basic and diluted pro forma loss per common share                                                                                           |  | $            | (3.24    | ) |      | $ | (3.98    | )    |  | $ | (1.58    | )



Revenue Recognition



The Company primarily owns, operates and manages hotel
properties. Revenue is generally recognized when rooms are occupied and as services are performed. Hotel revenue consists primarily of room rentals, food and beverage sales and other activities from owned and leased hotels. Management and service
fees primarily represent management and franchise fees earned from third-party owned hotels managed by the Company. Management fees include a base fee, which is generally a percentage of hotel revenue, and an incentive fee, which is generally based
on the hotels profitability. The Company recognizes base fees as revenue when earned in accordance with the terms of the contract. Incentive fees are not recognized until the end of the year based on the hotels annual profitability.
Franchise fees represent fees in connection with the franchise of our brand from third-party owners. We recognize franchise fee revenue in accordance with SFAS 45, Accounting for Franchise Fee Revenue. Initial franchise fees are
recognized when substantially all of the initial services or conditions relating to the franchise contract have been performed or satisfied. Continuing franchise fees are recognized as the fees are earned and become receivable from the franchise.
Payments received in advance of revenue being earned under the franchise agreements are deferred and classified in accrued expenses.



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.



F-13



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Advertising Costs



The Company participates in various advertising and marketing programs. Production costs of commercials are charged to
operations in the period during which the commercial is first aired. The costs of other advertising, promotion and marketing programs are expensed in the period incurred. The Company has recognized advertising expenses of $28,995, $37,201 and
$46,089 for 2003, 2002 and 2001, respectively.



Self
Insurance



The Company is self-insured for various levels
of general liability, automobile liability, workers compensation and employee medical coverage up to certain levels. 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.



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.



The Companys financial instrument exposure to concentration of credit
risk consists primarily of cash and cash equivalents. The Companys funds are deposited with high-credit-quality financial institutions and at times, these funds may be in excess of the federal depository insurance limit.



Fair Value of Financial Instruments



SFAS 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, 2003. 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 values of (i) accounts receivable, accounts payable and accrued expenses approximate the 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, 2003 was approximately $201,501.



F-14



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Accounting for Derivative Instruments and Hedging Activities



On January 1, 2001, the Company changed its method of accounting for its
derivative instruments in accordance with its adoption of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and No. 138.



On the date the Company enters into a derivative contract, it designates the derivative as a hedge of (a) a forecasted
transaction or (b) the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a cash flow hedge). Currently, the Company has only entered into derivative contracts designated as cash
flow hedges. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are recorded in other comprehensive income until earnings are
affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable-rate asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the
fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. Changes in the fair value of non-hedging instruments are reported in current-period earnings.



The Company formally documents all relationships between hedging instruments
and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to (1) specific assets and liabilities on the
balance sheet or (2) specific firm commitments or forecasted transactions. The Company also formally assesses (both at the hedges inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly
effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative is not (or has ceased to be) highly effective as a
hedge, the Company discontinues hedge accounting prospectively.



The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including hedged items such as firm commitments or
forecasted transactions); (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or
(5) management determines that designating the derivative as a hedging instrument is no longer appropriate.



When the Company discontinues hedge accounting because it is no longer probable that the forecasted transaction will occur in the originally expected
period, the gain or loss on the derivative remains in accumulated other comprehensive income and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is probable that a forecasted transaction will not occur
by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses that were accumulated in other comprehensive income will be recognized immediately in earnings. In all situations in
which hedge accounting is discontinued and the derivative remains outstanding, the Company will carry the derivative at its fair value on the balance sheet, recognizing changes in the fair value in current-period earnings.



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.



F-15



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Recent Pronouncements



The Company implemented the provisions of SFAS 144, Accounting for the Impairment or Disposal of Long-lived
Assets, in 2002. As a result of the adoption of SFAS 144, gains and losses on long-lived assets classified as held for sale subsequent to January 1, 2002, the effective date of SFAS 144, were classified as gains or losses from the disposal of
discontinued operations. Certain gains and losses on long-lived assets classified as held for sale that were disposed of during the years ended December 31, 2003, 2002 and 2001, have been classified in continued operations because they were
classified as held for sale as of December 31, 2001 and restatement of prior periods is not permitted under SFAS 144.



On January 1, 2003, the Company adopted SFAS 145, Rescission of SFAS 4, 44 and 66, Amendment of SFAS 13 and Technical Correction. SFAS 145
rescinds SFAS 4, 44 and 64 and amends SFAS 13 to modify the accounting for sale-leaseback transactions. SFAS 4 required the classification of gains and losses resulting from extinguishment of debt to be classified as extraordinary items. Pursuant to
the adoption of SFAS 145, the Company reclassified amounts shown as extraordinary for the year ended December 31, 2001 to continuing operations.



In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based CompensationTransition and Disclosure, which amends SFAS 123,
Accounting for Stock-Based Compensation. In response to a growing number of companies announcing plans to record expenses for the fair value of stock options, SFAS 148 provides alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent and more frequent disclosures in financial statements about the effects of
stock based compensation. SFAS 148 also amends the disclosure provisions of SFAS 123 to require more prominent disclosure about the effects of an entitys accounting policy decisions with respect to stock-based employee compensation on reported
net income. Finally, SFAS 148 amends APB 28, Interim Financial Reporting, to require disclosure about those effects in interim financial information. The amendments to SFAS 123 are effective for financial statements for fiscal years ending after
December 15, 2002. The Company made the disclosure required by the provisions of SFAS 148 on page F-12 under Stock Compensation.



In January 2003, the FASB issued FIN 46. The objective of FIN 46 is to provide guidance on how to identify a variable interest entity (VIE)
and determine when the assets, liabilities, non-controlling interest, and results of operations of a VIE need to be included in a companys consolidated financial statements. A company that holds a variable interest in an entity will need to
consolidate the entity if the companys interest in the VIE is such that the company will absorb a majority of the VIEs expected losses and/or receive a majority of the entitys expected residual returns, if they occur. FIN 46 also
requires additional disclosure by primary beneficiaries and other significant variable interest holders. The disclosure provisions of FIN 46 became effective upon issuance. The consolidation requirements of FIN 46 apply immediately to VIEs
created after January 31, 2003 and in the first fiscal year or interim period ending after March 15, 2004 to existing VIEs. The Company did not establish any variable interest entities after January 31, 2003. The Company is in the process of
evaluating all of its lease, management and joint venture relationships that existed prior to January 31, 2003 in order to determine whether the entities are VIEs and whether the Company is considered to be the primary beneficiary or whether
it holds a significant variable interest. The Company believes it is reasonably possible that its interest in one management contract (Wyndham Anatole) is a VIE where the Company is the primary beneficiary, which will require consolidation under FIN
46 as of January 1, 2004. Had consolidation been required as of December 31, 2003, the Company would have recorded assets of $150,702, liabilities of $201,165 and minority interest of $(50,463). In the unlikely event that the Company terminated the
management contract and all of the underlying assets related to this contract had no value, the Company estimates that its maximum



F-16



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



exposure to loss would approximate $92,314, primarily representing the net carrying value of the Companys investment in the Wyndham Anatole at December
31, 2003. However, the Company expects to recover the recorded amount of the investment in the Wyndham Anatole. As the Company finalizes its evaluation of the impact of applying FIN 46, additional entities may be identified that would need to be
consolidated by the Company.



In April 2003, the FASB issued
SFAS 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for
hedging activities under SFAS 133. The new guidance amends SFAS 133 for decisions made: (a) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS 133, (b) in connection with other Board projects dealing
with financial instruments, and (c) regarding implementation issues raised in relation to the application of the definition of a derivative, particularly regarding the meaning of an underlying derivative and the characteristics of a
derivative that contains financing components. The amendments set forth in SFAS 149 improve financial reporting by requiring that contracts with comparable characteristics be accounted for similarly. SFAS 149 is generally effective for contracts
entered into or modified after June 30, 2003 (with a few exceptions) and for hedging relationships designated after June 30, 2003. The guidance is to be applied prospectively. The Companys adoption of SFAS 149 did not have a material impact on
its financial position or results of operations.



In May 2003,
the FASB issued SFAS 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS 150 specifies that instruments within its scope embody obligations of the issuer and that, therefore, the
issuer must classify them as liabilities. SFAS 150 is effective immediately for all financial instruments entered into or modified after May 31, 2003. For all other instruments, SFAS 150 goes into effect at the beginning of the first interim period
beginning after June 15, 2003, except for mandatorily redeemable financial instruments of a non-public entity. For contracts that were created or modified before May 31, 2003 and still exist at the beginning of the first interim period beginning
after June 15, 2003, entities should record the transition to SFAS 150 by reporting the cumulative effect of a change in an accounting principle. SFAS 150 prohibits entities from restating financial statements for earlier years presented. On October
29, 2003, the FASB deferred the provisions of paragraphs 9 and 10 of SFAS 150 as they apply to mandatorily redeemable noncontrolling interests. Those provisions require that mandatorily redeemable minority interests within the scope of SFAS 150 be
classified as a liability on a parent companys financial statement in certain situations, including when a finite-lived entity is consolidated. The deferral of those provisions is expected to remain in effect while certain issues are addressed
in either Phase II of the FASBs Liabilities and Equity project or Phase II of the FASBs Business Combinations Project. However, the FASB did not defer the disclosure provisions relating to mandatorily redeemable noncontrolling interests.
Therefore, in accordance with SFAS 150, if the Company liquidates the consolidated subsidiaries in which there exists a minority interest, the Company would be required to pay approximately $23,146 in cash. Such amount is lower than the carrying
amount of the minority interest in consolidated subsidiaries by $16,835.



Reclassification



Certain prior year balances have been reclassified to conform to the current year presentation with no effect on previously reported amounts of income or retained earnings.



F-17



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##### Table of Contents

##### Index to Financial Statements

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:



|                                  |  |                                      |           |   |                     |   |          |       |  |   |                                      |   |  |                    |           |   |       |   |         |   |  |   |            |  
|--------------------------------- |  | ------------------------------------ | --------- | - | ------------------- | - | -------- | ----- |  | - | ------------------------------------ | - |  | ------------------ | --------- | - | ----- | - | ------- | - |  | - | ---------- | -
|                                  |  | December 31, 2003                    |           |   | December 31, 2002   |  
|                                  |  | Investment inReal EstateHeld for Use |           |   | Assets Held forSale |   |          | Total |  |   | Investment inReal EstateHeld for Use |   |  | AssetsHeld forSale |           |   | Total |  
|Land                              |  | $                                    | 288,106   |   |                     | $ | 38,521   |       |  | $ | 326,627                              |   |  | $                  | 344,168   |   |       | $ | 23,978  |   |  | $ | 368,146    |  
|Land held for development         |  |                                      | 28,647    |   |                     |   |         |       |  |   | 28,647                               |   |  |                    | 31,127    |   |       |   |        |   |  |   | 31,127     |  
|Buildings and improvements        |  |                                      | 2,867,596 |   |                     |   | 252,538  |       |  |   | 3,120,134                            |   |  |                    | 3,324,568 |   |       |   | 84,743  |   |  |   | 3,409,311  |  
|Furniture, fixtures and equipment |  |                                      | 641,294   |   |                     |   | 77,777   |       |  |   | 719,071                              |   |  |                    | 861,411   |   |       |   | 28,099  |   |  |   | 889,510    |  
|Renovations in progress           |  |                                      | 14,944    |   |                     |   | 767      |       |  |   | 15,711                               |   |  |                    | 29,135    |   |       |   | 408     |   |  |   | 29,543     |  
|                                  |  |                                      |           |   |                     |   |          |       |  |   |                                      |   |  |                    |           |   |       |   |         |   |  |   |            |  
|                                  |  |                                      | 3,840,587 |   |                     |   | 369,603  |       |  |   | 4,210,190                            |   |  |                    | 4,590,409 |   |       |   | 137,228 |   |  |   | 4,727,637  |  
|Less: impairment                  |  |                                      |          |   |                     |   | (11,405  | )     |  |   | (11,405                              | ) |  |                    |          |   |       |   | (37,851 | ) |  |   | (37,851    | )
|Less: accumulated depreciation    |  |                                      | (901,779  | ) |                     |   | (119,868 | )     |  |   | (1,021,647                           | ) |  |                    | (978,953  | ) |       |   | (28,526 | ) |  |   | (1,007,479 | )
|Equity investment held for sale   |  |                                      |          |   |                     |   |         |       |  |   |                                     |   |  |                    |          |   |       |   | 6,405   |   |  |   | 6,405      |  
|                                  |  |                                      |           |   |                     |   |          |       |  |   |                                      |   |  |                    |           |   |       |   |         |   |  |   |            |  
|                                  |  | $                                    | 2,938,808 |   |                     | $ | 238,330  |       |  | $ | 3,177,138                            |   |  | $                  | 3,611,456 |   |       | $ | 77,256  |   |  | $ | 3,688,712  |  
|                                  |  |                                      |           |   |                     |   |          |       |  |   |                                      |   |  |                    |           |   |       |   |         |   |  |   |            |  



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. At December 31, 2003, certain assets were classified as held for
sale. At December 31, 2003 and 2002, the impairment for assets held for sale totaled $11,405 and $37,851, respectively. The assets held for sale had income from operations of $24,500 and $6,106 for the years ended December 31, 2003 and 2002,
respectively, net of amounts owned by third party limited partners.



The Company continues to evaluate the assets in its total portfolio as well as to pursue an orderly disposition of its held for sale assets. There can be no assurance if or when sales will be completed or whether such sales will be
completed on terms that will enable the Company to realize the full carrying value of such assets.



Asset Sales



During the year ended December 31, 2003, the Company sold its investments in eighteen hotels, certain undeveloped land and a golf venture in separate
transactions. The Company received net cash proceeds of approximately $107,386, after the repayment of mortgage debt of approximately $114,878. The Company recorded a net gain of $4,552 as a result of these asset sales. Also, $68,282 of the net cash
proceeds was used by the Company to pay down a portion of the senior credit facility and increasing rate loan facility, and the Company retained the rest of the net cash proceeds in accordance with the terms of the senior credit facilities.



During the year ended December 31, 2003, leases on 27 hotel
properties (15 Summerfield Suites® by Wyndham and
12 Wyndham Hotels and Wyndham Garden Hotels) operated by two subsidiaries of the Company were terminated by Hospitality Properties Trust (HPT). HPT rebranded 14 of 15 Summerfield Suites® by Wyndham to a third-party brand on October 6, 2003, and one property remains a
Summerfield Suite pursuant to a franchise agreement with HPT. Under a final settlement agreement, the 12 Wyndham Hotels and Wyndham Garden Hotels will be rebranded to a third-party brand during 2004. On an annualized basis, based upon



F-18



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



projections for the calendar year 2003, the estimated positive impact on cash flow of the lease terminations to the subsidiaries of the Company is $14,300.
For the year ended December 31, 2003, the terminations resulted in a non-cash write-off of approximately $153,909 for the leases remaining book value.



During 2002, the Company sold seven hotels and an investment in a restaurant venture, in separate transactions, for aggregate net cash proceeds of
approximately $60,125, after repayment of approximately $65,659 of mortgage debt. In addition, the Company sold thirteen hotels in a single transaction for net cash proceeds of approximately $202,467 after repayment of approximately $224,113 of
mortgage debt. As a result of asset sales, the Company recorded a net loss of $3,699. Also, $166,254 of the net cash proceeds from the asset sales was used by the Company to pay down a portion of its senior credit facility and increasing rate loan
facility and $36,141 was placed in escrow under the terms of the senior credit facility for application by the Company in the future to payments on existing mortgage indebtedness. As of December 31, 2003, $10,264 of such net cash proceeds has been
applied in payment of existing mortgage indebtedness.



During
2001, the Company sold six hotels, a sewer company and investments in four hotels for net cash proceeds of $100,531 after repayment of approximately $21,800 of mortgage debt. In addition, the Company exchanged six hotels with a net book value of
$70,134, for one hotel with an estimated fair value of $61,308. As a result of asset sales and the exchange, the Company recorded a net loss of $13,205, net of previously recorded impairments of $89,354.



Interstate



During 2000, Wyndham agreed to the redemption of its aggregate 55%
non-voting economic interest (the Wyndham Interest) in Interstate Hotels, LLC (IH LLC), a principal operating subsidiary of Interstate Hotel Company (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. 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. On July 12, 2001, IH LLC, pursuant to a redemption agreement, called for the redemption of Wyndhams preferred interest in IH LLC. In consideration for the redemption, Wyndham received $8,250 in cash and two promissory notes
in the amounts of $750 and $3,682, respectively. The notes were repaid in May 2002 and June 2002, respectively, by IHC. The Company recorded a gain of $2,003, net of previously recorded impairment of $16,499. The portion of the Wyndham Interest that
was not converted into a preferred membership interest will remain outstanding. 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 1% non-controlling 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 1% non-controlling common interest, or
(b) approximately $433.



F-19



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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



Outstanding borrowings as of December 31, 2003 and 2002 under the line of
credit, term loans, mortgage and other notes and capital lease obligations consist of the following:



|                                        |  |                  |           |   |                  |   |           |              |  |         |               |  |                  |  |                   
|--------------------------------------- |  | ---------------- | --------- | - | ---------------- | - | --------- | ------------ |  | ------- | ------------- |  | ---------------- |  | ------------------
|Description                             |  | December 31,2003 |           |   | December 31,2002 |   |           | Amortization |  |         | Interest Rate |  | Maturity        
|Revolving credit facility I             |  | $                | 4,081     |   |                  | $ | 156,406   |              |  | None    |               |  | LIBOR + 3.75%    |  | June 30, 2004(1)  
|Revolving credit facility II            |  |                  |          |   |                  |   |          |              |  | None    |               |  | LIBOR + 3.75%    |  | June 30, 2004     
|Revolving credit facility III           |  |                  |          |   |                  |   |          |              |  | None    |               |  | LIBOR + 4.75%    |  | April 1, 2006(1)  
|Revolving credit facility IV            |  |                  | 160,051   |   |                  |   |          |              |  | None    |               |  | LIBOR + 5.75%    |  | April 1, 2006(1)  
|Term loans I                            |  |                  | 1,051,369 |   |                  |   | 1,183,177 |              |  | (2      | )             |  | LIBOR + 5.75%(3) |  | June 30, 2006     
|Term loans II                           |  |                  | 343,284   |   |                  |   |          |              |  | (4      | )             |  | LIBOR + 5.75%    |  | April 1, 2006     
|Increasing rate loans                   |  |                  | 15,165    |   |                  |   | 447,699   |              |  | None    |               |  | LIBOR + 4.75%    |  | June 30, 2004(1)  
|Bear, Stearns Funding, Inc.             |  |                  |          |   |                  |   | 154,198   |              |  | None    |               |  | LIBOR + 2.90%    |  |   (5)            
|Lehman Brothers Holdings Inc.           |  |                  |          |   |                  |   | 174,520   |              |  | None    |               |  | LIBOR + 3.5%     |  |   (5)            
|Lehman Brothers Holdings Inc. II        |  |                  | 175,184   |   |                  |   | 177,388   |              |  | (6      | )             |  | LIBOR + 1.8%     |  | August 10, 2004   
|Lehman Brothers Holdings Inc. III       |  |                  | 39,339    |   |                  |   | 39,873    |              |  | (7      | )             |  | 8.0%(7)          |  | September 10, 2004
|Lehman Brothers Holdings Inc. IV        |  |                  | 397,353   |   |                  |   |          |              |  | (8      | )             |  | 7.48%(8)         |  | June 9, 2005      
|Lehman Brothers Holdings Inc. (Condado) |  |                  | 94,369    |   |                  |   |          |              |  | (9      | )             |  | LIBOR + 4.25%(9) |  | November 6, 2005  
|Metropolitan Life Insurance             |  |                  | 93,492    |   |                  |   | 94,937    |              |  | (10     | )             |  | 8.08%            |  | October 1, 2007   
|Other mortgage notes payable(11)        |  |                  | 269,885   |   |                  |   | 356,882   |              |  | Various |               |  | (12)             |  | (12)              
|Unsecured financing                     |  |                  | 1,509     |   |                  |   | 1,509     |              |  | None    |               |  | 10.5%            |  | May 15, 2006      
|Capital lease obligations               |  |                  | 36,878    |   |                  |   | 39,954    |              |  |         |               |  |                  |  |                   
|                                        |  |                  |           |   |                  |   |           |              |  |         |               |  |                  |  |                   
|                                        |  | $                | 2,681,959 |   |                  | $ | 2,826,543 |              |  |         |               |  |                  |  |                   
|Less current portion:                   |  |                  |           |   |                  |   |           |              |  |         |               |  |                  |  |                   
|Mortgage debt-assets held for sale(13)  |  |                  | (118,133  | ) |                  |   | (45,835   | )            |  |         |               |  |                  |  |                   
|Current portion of borrowings           |  |                  | (292,661  | ) |                  |   | (385,786  | )            |  |         |               |  |                  |  |                   
|                                        |  |                  |           |   |                  |   |           |              |  |         |               |  |                  |  |                   
|Long term debt                          |  | $                | 2,271,165 |   |                  | $ | 2,394,922 |              |  |         |               |  |                  |  |                   
|                                        |  |                  |           |   |                  |   |           |              |  |         |               |  |                  |  |                   

---

|(1) | The Company entered into amendments and restatements of its senior credit facilities. The consenting lenders maturity dates for the revolving credit facility and the term
loans II were extended to April 1, 2006. The maturity dates for the non-consenting lenders debt of approximately $19,000 remains June 30, 2004. Pursuant to the terms of the amended credit facilities, the Company has retained an amount
sufficient to satisfy such $19,000 in debt at maturity from the net cash proceeds of asset sales and refinancings.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | A principal payment of $5,000 is to be paid each six months until the final payment of principal which is due on June 30, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(3) | 1% of the interest rate spread is paid-in-kind and is payable at maturity.
|--- | --------------------------------------------------------------------------

|(4) | A principal payment of 0.5% of the outstanding principal balance is to be paid each six months until the final payment of the principal which is due on April 1, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The debt balance was refinanced on June 11, 2003.
|--- | -------------------------------------------------

|(6) | The loan is collateralized by four hotel properties with a net book value of $213,973 as of December 31, 2003. The Company must make scheduled amortization payments as set forth in
the loan agreement. The loan agreement provides that the Company can elect to extend the term of the loan for two additional twelve month periods.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The loan is collateralized by three hotel properties with a net book value of $105,129 as of December 31, 2003. The Company must make scheduled amortization payments as set forth in
the loan agreement. The loan agreement provides that the Company can elect to extend the term of the loan for two additional twelve month periods. Currently, LIBOR is below the minimum interest rate pursuant to the agreement, therefore, the rate is
fixed at 8% until such time as the LIBOR rate rises above the minimum.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-20



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



|(8) | The loan is collateralized by nineteen hotel properties with a net book value of $560,780 as of December 31, 2003. The Company must make scheduled amortization payments as set forth
in the loan agreement. The loan agreement provides that the Company can elect to extend the term of the loan for three additional twelve month periods. The interest rate is the sum of (x) the greater of (i) LIBOR or (ii) 2.5% plus (y) the then
effective spread as set forth in the loan agreement. The current spread is 4.98% and LIBOR is less than 2.5%, which results in a current interest rate of 7.48%. The interest rate is adjustable as LIBOR and the spread changes over the life of the
loan. Over the life of the loan, the average spread is 5%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | The loan is collateralized by one hotel with a net book value of $96,987 as of December 31, 2003. The interest rate has a 2% LIBOR floor. The loan agreement provides that the
Company can elect to extend the term of the loan for three additional twelve month periods.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | The loan is collateralized by six Doubletree hotels with a net book value of $129,797 as of December 31, 2003. The six hotels were sold and debt was assumed in full by the purchaser
on January 30, 2004. See subsequent event on page F-40 for details.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | The loans are collateralized by 8 hotel properties and a parcel of land with a net book value of $564,392 as of December 31, 2003.
|---- | ----------------------------------------------------------------------------------------------------------------------------------

|(12) | Interest rates range from fixed rates of 9.08% to 9.11% and variable rates of LIBOR plus 1.5% to LIBOR plus 4.25%. The mortgages have a weighted average interest rate as of December
31, 2003 of 4.61%. Maturity dates range from 2004 through 2023.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Subsequent to December 31, 2003, mortgage debt and senior credit facilities were paid down by $96,518 and $34,762 respectively, due to asset sales.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------



Under the terms of the related loan agreements and capital lease obligations,
principal amortization and balloon payment requirements at December 31, 2003 are as follows for each of the next five years:



|                    |  |        |           |    
|------------------- |  | ------ | --------- | ---
|Year                |  | Amount |          
|2004                |  | $      | 292,661   | (1)
|2005                |  |        | 683,939   | (2)
|2006                |  |        | 1,535,554 |    
|2007                |  |        | 92,826    |    
|2008                |  |        | 4,144     |    
|2009 and thereafter |  |        | 72,835    |    
|                    |  |        |           |    
|                    |  | $      | 2,681,959 |    
|                    |  |        |           |    

---

|(1) | The Company can elect to extend $214,523 for two additional twelve month periods, and an additional $19,000 of debt has been provided for in a restricted cash account. The Company
is seeking to refinance the remaining mortgages prior to their maturities in 2004; however, there can be no assurance that the Company will be able to do so.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The Company can elect to extend $491,722 for three additional twelve month periods and $43,500 for one additional twelve month period.
|--- | --------------------------------------------------------------------------------------------------------------------------------------



On March 4, 2003, the Company entered into a fourth amendment and restatement
of its term loan and revolving credit facility and a third amendment of its increasing rate loans facility. The amendments include the following:



| |  | an increase in the letter of credit availability under the revolving facility from $75,000 to $90,000;
| | - | ------------------------------------------------------------------------------------------------------



| |  | waivers and consents by the lenders to any resolution of issues surrounding certain under-performing properties;
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | extension of the outside date by which the Company must grant mortgage liens to the lenders on certain excluded properties under the credit facilities; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | authorization to effect certain administrative organizational changes to the Companys corporate structure.
| | - | -----------------------------------------------------------------------------------------------------------



F-21



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



On May 29, 2003, the Company entered into a fifth amendment and restatement of its term loan and
revolving credit facility and a fourth amendment of its increasing rate loans facility. The amendments provided for the extension of the maturity dates of the Companys revolving and increasing rate loans facility held by consenting lenders
(previously scheduled to occur on June 30, 2004) to April 1, 2006 upon the satisfaction of certain conditions, including the principal repayment of $200,190 of the term and increasing rate facilities before February 29, 2004. On December 9, 2003,
the Company satisfied all conditions precedent necessary to affect an extension of the consenting lenders maturity dates for the revolving credit facility and the increasing rate loans to April 1, 2006. Loans held by non-consenting lenders
totaling approximately $19,000 will retain the original maturity date of June 30, 2004. Pursuant to the terms of the amended credit facilities, the Company has retained an amount sufficient to satisfy such $19,000 debt at maturity from the net cash
proceeds of asset sales and refinancings. The proceeds of asset sales and refinancings were the primary sources of funds for the $200,190 principal repayment and the $19,000 reserve for the June 30, 2004 maturities. In connection with the maturity
extensions, the available commitments under the Companys revolving credit facility have been reduced by $85,000. Over 95% of the revolving and increasing rate lenders voted in favor of the amendments. Also, consenting lenders will receive an
increase in interest rate and certain fees as set forth in the amended credit facilities, including a 2% fee to be paid at maturity based upon the sum of the revolving commitments and outstanding terms loans, if any, as of June 30, 2005.



Pursuant to the terms of the amended credit facilities in effect following
the maturity extensions described above, the Company may retain some or all of the net cash proceeds from asset sales and refinancings of existing mortgage indebtedness (other than the credit facilities) up to $22,500 to be used to repay the
non-consenting lenders at the June 2004 original maturity date as long as the Company maintains a pro forma minimum revolving credit facility commitment availability after giving effect to such retention. As of January 15, 2004, the Company has
retained $22,500 to satisfy the non-consenting lenders at the June 2004 original maturity date from the net cash proceeds of asset sales and refinancings. The Company may retain all or any portion of the reserved amount in the event the outstanding
balance of the loans held by non-consenting lenders is less than the reserved amount as of the June 2004 maturity date. Following the retention described above, the Company will apply net cash proceeds in the following manner: first, the initial
$20,000 of asset sale proceeds each year may be retained by the Company, provided that the second $10,000 of the $20,000 may be retained only if the Companys liquidity falls below a certain level set forth in the credit facilities; second,
subject to certain limitations set forth in the credit facilities including maximum Company liquidity levels, the Company may elect to retain up to 25% of such net cash proceeds with the balance applied to repay indebtedness under the credit
facilities, up to a maximum of $35,000 a year; third, to repay scheduled term loan payments; fourth, after the Company has retained $35,000 in such year, or if the Company is not permitted to retain a percentage of the asset sale or refinancing
proceeds as a result of the limitations set forth in the credit facilities, 100% of such proceeds must be applied to repay indebtedness under the credit facilities on a pro-rata basis. The Company also agreed to use 100% of the net cash proceeds
from new debt issuances (other than refinancings of existing mortgage indebtedness which will be applied in accordance with the previous sentence) to reduce outstanding indebtedness under the credit facilities on a pro rata basis.



On June 11, 2003, the Company completed a $425,000 mortgage refinancing
secured by 19 hotel properties. The loan was made by affiliates of Lehman Brothers Holdings Inc., bears interest at the rate set forth in Note 4, footnote 8 and has an initial maturity date of June 9, 2005. The Company, in its sole discretion, may
extend the maturity date of the loan to as late as July 9, 2008. The loan refinanced the two mortgage pools that were scheduled to mature on July 1, 2003 and July 1, 2004, respectively.



On November 6, 2003, the Company refinanced the Wyndham Condado Plaza mortgage debt totaling $36,545 as of September 30,
2003, with Lehman Brothers Holdings Inc. A portion of the excess proceeds



F-22



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



received from the Condado refinancing was used to pay down $23,500 of the senior credit facility and increasing rate loan. The new loan totaling $94,500
bears interest at LlBOR plus 4.25% with a 2% LIBOR floor and matures on November 6, 2005. The Company, solely at its option, can extend the maturity date for three one year periods.



5. Derivatives:



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 and counterparty risk. At December 31, 2003, the estimated fair value of the interest rate hedges represented a liability of $56,760. The Company has no embedded derivatives under SFAS 133, as
amended, at December 31, 2003.



The following table represents
the derivatives in place as of December 31, 2003:



|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|---------------------- |  | -------------- | --------- | ------------ | ---------- | --------- | ----------- | -------- | -------------- | --------- | ----- | --- | ------------ | ----------- | --------- | - | ------- | -
|                       |  | NotionalAmount |           | MaturityDate |            | Swap Rate |             | Cap Rate |                | FloorRate |       |     | TriggerLevel |             | FairValue |  
|Type of Hedge:         |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|Interest Rate Cap (4)  |  | $              | 175,184   |              | 08/10/2005 |           | n/a         |          | 7.25%          |           | n/a   |     |              | n/a         |           | $ | 30      |  
|Interest Rate Cap (5)  |  |                | 18,990    |              | 07/03/2004 |           | n/a         |          | 6.50%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (5)  |  |                | 27,680    |              | 07/03/2004 |           | n/a         |          | 7.10%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (5)  |  |                | 42,760    |              | 07/03/2004 |           | n/a         |          | 8.10%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (5)  |  |                | 42,760    |              | 07/03/2004 |           | n/a         |          | 9.70%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (4)  |  |                | 25,625    |              | 08/02/2004 |           | n/a         |          | 8.50%          |           | n/a   |     |              | n/a         |           |   |        |  
|Structured Collar (5)  |  |                | 180,000   |              | 11/04/2004 |           | n/a         |          | 6.60%(1)       |           | 5.65% | (2) |              | n/a         |           |   | (7,877  | )
|Interest Rate Cap (4)  |  |                | 2,068     |              | 07/01/2005 |           | n/a         |          | 9.75%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (4)  |  |                | 106,000   |              | 07/01/2005 |           | n/a         |          | 9.75%          |           | n/a   |     |              | n/a         |           |   | 3       |  
|Interest Rate Cap (4)  |  |                | 273,413   |              | 07/09/2005 |           | n/a         |          | 3.50%-4.25%(3) |           | n/a   |     |              | n/a         |           |   | 221     |  
|Interest Rate Cap (4)  |  |                | 149,134   |              | 07/09/2005 |           | n/a         |          | 3.50%-4.25%(3) |           | n/a   |     |              | n/a         |           |   | 120     |  
|Interest Rate Cap (5)  |  |                | 20,000    |              | 09/10/2004 |           | n/a         |          | 7.00%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (5)  |  |                | 13,000    |              | 09/10/2004 |           | n/a         |          | 7.00%          |           | n/a   |     |              | n/a         |           |   |        |  
|Interest Rate Cap (5)  |  |                | 7,000     |              | 09/10/2004 |           | n/a         |          | 7.00%          |           | n/a   |     |              | n/a         |           |   |        |  
|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|                       |  | $              | 1,083,614 |              |            |           |             |          |                |           |       |     |              |             |           | $ | (7,503  | )
|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|Interest Rate Swap (5) |  | $              | 26,787    |              | 09/30/2005 |           | 4.62%       |          | n/a            |           | n/a   |     |              | n/a         |           | $ | (28     | )
|Interest Rate Swap (5) |  |                | 26,341    |              | 12/31/2005 |           | 7.00%       |          | n/a            |           | n/a   |     |              | 5.61%       |           |   | (81     | )
|Interest Rate Swap (5) |  |                | 14,166    |              | 04/01/2005 |           | 3.92%-4.73% |          | 6.50%          |           | n/a   |     |              | 5.50%       |           |   | (593    | )
|Interest Rate Swap (5) |  |                | 43,500    |              | 08/01/2005 |           | 4.36%-5.25% |          | 7.85%          |           | n/a   |     |              | 5.75%       |           |   | (2,482  | )
|Interest Rate Swap (5) |  |                | 150,000   |              | 03/06/2005 |           | 6.10%-6.75% |          | n/a            |           | n/a   |     |              | 7.00%-8.50% |           |   | (9,855  | )
|Interest Rate Swap (5) |  |                | 550,000   |              | 03/07/2005 |           | 6.10%-6.75% |          | n/a            |           | n/a   |     |              | 7.00%-8.50% |           |   | (36,218 | )
|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|                       |  | $              | 810,794   |              |            |           |             |          |                |           |       |     |              |             |           | $ | (49,257 | )
|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  
|Total Caps and Swaps   |  | $              | 1,894,408 |              |            |           |             |          |                |           |       |     |              |             |           | $ | (56,760 | )
|                       |  |                |           |              |            |           |             |          |                |           |       |     |              |             |           |   |         |  

---

|(1) | If on a reset date LIBOR is greater than or equal to 8% but less than 9.5%, the cap rate shall not be effective. 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%.
|--- | --------------------------------------------------------------------------------------

|(3) | 3.5% is the first year cap rate and 4.25% is the second year cap rate.
|--- | ----------------------------------------------------------------------

|(4) | Effective derivatives.
|--- | ----------------------

|(5) | Ineffective derivatives.
|--- | ------------------------



F-23



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



For the year ended December 31, 2003, the Company recorded a gain of $33,331 for the change in the
fair market value of the ineffective interest rate hedge contracts through earnings, and a reduction of $1,220 (net of taxes of $1,077) to other comprehensive income for the change in the fair market value of the effective interest rate hedge
contracts. Also, during 2003, the Company recorded amortization of $3,817 (net of taxes of $2,544) to earnings as a reduction of the transitional adjustment that was recorded in other comprehensive income in 2001. Additionally, the Company paid
$49,163 in settlement payments for the ineffective hedges during the year ended December 31, 2003.



For the year ended December 31, 2002, the Company recorded a loss of $27,181 for the change in the fair market value of the ineffective interest rate
hedge contracts through earnings, and a reduction of $4,797 (net of taxes of $3,197) to other comprehensive income for the change in the fair market value of the effective interest rate hedge contracts. Also, during 2002, the Company recorded
amortization of $9,601 (net of taxes of $6,400) to earnings as a reduction of the transitional adjustment that was recorded in other comprehensive income in 2001. Additionally, the Company paid $41,662 in settlement payments for the ineffective
hedges during the year ended December 31, 2002.



6. Computation of Earnings
Per Share:



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



|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|-------------------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ------- | - | -------- | ------- |  | - | -------- | -
|                                                                                       |  | Year Ended December 31, |         
|                                                                                       |  | 2003(1)                 |          |   | 2002(1) |   |          | 2001(1) | 
|Loss from continuing operations                                                        |  | $                       | (151,736 | ) |         | $ | (143,841 | )       |  | $ | (152,763 | )
|(Loss) income from discontinued operations                                             |  |                         | (237,876 | ) |         |   | (54,483  | )       |  |   | 24,188   |  
|Preferred stock dividends                                                              |  |                         | (155,586 | ) |         |   | (144,217 | )       |  |   | (122,621 | )
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|Loss attributable to common shareholders before cumulative effect of accounting change |  |                         | (545,198 | ) |         |   | (342,541 | )       |  |   | (251,196 | )
|Cumulative effect of accounting change                                                 |  |                         |         |   |         |   | (324,102 | )       |  |   | (10,365  | )
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|Net loss attributable to common shareholders                                           |  | $                       | (545,198 | ) |         | $ | (666,643 | )       |  | $ | (261,561 | )
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|Weighted average number of shares outstanding                                          |  |                         | 168,128  |   |         |   | 167,943  |         |  |   | 167,698  |  
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|Loss per common share:                                                                 |  |                         |          |   |         |   |          |         |  |   |          |  
|Loss from continuing operations                                                        |  | $                       | (1.83    | ) |         | $ | (1.72    | )       |  | $ | (1.64    | )
|(Loss) income from discontinued operations                                             |  |                         | (1.41    | ) |         |   | (0.32    | )       |  |   | 0.14     |  
|Accounting change                                                                      |  |                         |         |   |         |   | (1.93    | )       |  |   | (0.06    | )
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  
|Net loss per common share                                                              |  | $                       | (3.24    | ) |         | $ | (3.97    | )       |  | $ | (1.56    | )
|                                                                                       |  |                         |          |   |         |   |          |         |  |   |          |  

---

|(1) | For 2003, the dilutive effect of unvested stock grants of 13,241, options to purchase 13,075 shares of common stock at prices ranging from $0.48 to $30.40 and 167,906 shares of
preferred stock were not included in the computation of diluted earnings per share for the year ended December 31, 2003 because they are anti-dilutive. For 2002, the dilutive effect of unvested stock grants of 13,708, options to purchase 13,136
shares of common stock at prices ranging from $0.85 to $30.40 and 153,325 shares of preferred stock were not included in the computation of diluted earnings per share for the year ended December 31, 2002 because they are anti-dilutive. For 2001, the
dilutive effect of unvested stock grants of 4,613, options to purchase 14,041 shares of common stock at prices ranging from $1.75 to $30.40 and 138,592 shares of preferred stock were not included in the computation of diluted earnings per share for
the year ended December 31, 2001 because they are anti-dilutive. See Note 10 for a discussion of the impact of SFAS No.123 (Accounting for Stock-Based Compensation) on earnings per share.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



7. 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 10 years. Annual rental
payments of $3,667, $4,414 and $4,109 for 2003, 2002 and 2001, 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:



|                    |  |             |      
|------------------- |  | ----------- | -----
|Year                |  | Rent Amount
|2004                |  | $           | 2,128
|2005                |  |             | 1,906
|2006                |  |             | 1,850
|2007                |  |             | 1,418
|2008                |  |             | 125  
|2009 and thereafter |  |             | 31   
|                    |  |             |      
|                    |  | $           | 7,458
|                    |  |             |      



Hotel and Ground
Leases



The Company leases both land and hotels under
agreements with terms ranging from one to 100 years. In general, the agreements provide for monthly payments of rent and are accounted for as operating leases for financial reporting purposes. The Company has incurred rent expense totaling $39,976,
$73,774 and $77,506 for 2003, 2002 and 2001, respectively. Future five year minimum lease payments under these lease agreements are as follows:



|                    |  |             |        
|------------------- |  | ----------- | -------
|Year                |  | Rent Amount
|2004                |  | $           | 15,198 
|2005                |  |             | 14,975 
|2006                |  |             | 14,975 
|2007                |  |             | 15,536 
|2008                |  |             | 15,426 
|2009 and thereafter |  |             | 119,106
|                    |  |             |        
|                    |  | $           | 195,216
|                    |  |             |        



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.



Notes Receivable From Former Senior Executives
Officers



Patriot assumed note 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



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



were extended to dates ranging from July 2004 through April 2006. As of December 31, 2003, these promissory notes had an outstanding balance of $18,121,
including accrued interest. The notes bear interest at 6% per annum and are secured by the pledge of shares of the Company held by the former senior executive officers. These notes and related accrued interest are receivables from shareholders
included in the statement of shareholders equity.



As
part of a separation agreement, the Company assumed a note receivable of $7,846 from a former senior executive officer. The note bears interest at 5.5% per annum and matures on August 13, 2005. The note is a full recourse note and is secured by the
pledge of 449,818 shares of the Company held by the former senior executive officer. The note and related accrued interest is included in the notes and other receivables on the balance sheet. As of December 31, 2003, principal and accrued
interest in the amount of $9,739 remained outstanding on the loan. As of December 31, 2003, the Company had a reserve of $2,000 against the note.



Management Agreement  Wyndham Anatole Hotel



In August 2000, the Company amended the Wyndham Anatole Hotel management agreement. This amendment, among other things, extended the term of the
management agreement to August 31, 2020. Under the terms of this amendment, the Company has a contingent obligation to pay the hotel owners a maximum of $21,000 over the term of the management agreement if yearly operating income, as defined, is not
sufficient to pay the primary debt service and an owner preferred return. This contingent obligation is supported by a $21,000 letter of credit issued by the Company. As of December 31, 2003, the Company has not incurred any such obligation.



Contingencies



On May 7, 1999, Doris Johnson and Charles Dougherty filed a lawsuit in the
Northern District of California against Patriot, Wyndham, their respective operating partnerships and PaineWebber 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 seeks unspecified damages and further alleges that defendants continued to defraud shareholders about their intentions to acquire numerous hotels and saddle the Company 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. PaineWebber 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. On or about August 15, 2001, the court granted
Defendants motions to dismiss the action, dismissing some of the claims with prejudice and granting leave to replead certain other claims in the Complaint. On or about October 15, 2001, plaintiff filed an amended complaint seeking
substantially the same relief as in the original complaint. On or about December 20, 2001, the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the court granted in part and denied in part Defendants motion to
dismiss. The Court did not dismiss certain of Plaintiffs claims under Section 11 of the Securities Act of 1933 and Section 12(b) of the Securities Exchange Act of 1934. An answer to the complaint has been filed. No discovery has been taken yet
and the Court has not yet certified a class. The Company intends to defend the suits vigorously. These suits may not be resolved for a number of years and it is not possible to predict the ultimate cost to the Company.



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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, 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 the Company. The complaint sought unspecified damages and was filed on behalf of all shareholders who purchased Patriot American and 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 pretrial purposes. On or about October 20, 2000, the defendants moved to
dismiss the actions. On or about August 15, 2001, the court granted Defendants motions to dismiss the action, dismissing some of the claims with prejudice and granting leave to replead certain other claims in the Complaint. On or about October
15, 2001, plaintiff filed an amended complaint seeking substantially the same relief as in the original complaint. On or about December 20, 2001, the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the court
dismissed in its entirety the complaint and granted plaintiffs leave to amend. On or about December 2, 2002, Plaintiffs filed an amended complaint. No discovery has been taken yet and the Court has not yet certified a class. The Company has entered
into a memorandum of understanding with class counsel to settle the litigation. The memorandum of understanding is subject to definitive documentation and court approval. Pursuant to the memorandum of understanding, the Company shall pay $2,500 in
cash when an order is entered by the court preliminarily approving the proposed settlement and an additional $2,500 on or before the second anniversary of the final court approval. As of December 31, 2003, the Company has established an adequate
reserve to cover the cost of the settlement.



On May 29, 2002,
the State of Florida Office of the Attorney General Department of Legal Affairs filed a lawsuit in Leon County, Florida (Case No. 02-CA-1296) naming the Company, Patriot and four current or former Wyndham employees as defendants. In this case, the
Attorney General alleged that the imposition of energy surcharges, resort fees and automatic service fees violates the States Deceptive and Unfair Trade Practices Act. The Company filed a motion to dismiss this suit which was granted in part
and the individual defendants were dismissed. The Attorney General has appealed the dismissal of the individual defendants. The Company intends to vigorously defend this lawsuit and have opposed the appeal. Discovery is on-going. This suit may not
be resolved for a number of years and it is not possible to predict the ultimate cost to the Company.



On June 20, 2002, plaintiffs in the case entitled Roller-Edelstein, et al. v. Wyndham International, Inc., et al., filed an amended complaint in Dallas
County District Court (case no. 02-04946-A) alleging that supplemental fees charged to hotel guests constituted common law fraud, breach of contract and violated Texas Deceptive Trade Practices Act. The plaintiffs claim to represent a
nationwide class and have estimated damages in excess of $10,000. The Company has answered this complaint, but no formal discovery has been taken yet and the court has not yet certified a class. The Company anticipates vigorously defending this
lawsuit. This suit may not be resolved for a number of years and it is not possible to predict the ultimate cost to the Company.



On February 18, 2003, a lawsuit was filed in the Superior Court of California, San Diego County, by Joseph Lopez and Alberto Jose Martinez, on behalf of
themselves and all others similarly situated, against Wyndham International, Inc., et al alleging that the Company violated certain provisions of the California Labor Code and the California Business and Professions Code concerning wage and hour
requirements. The plaintiffs claim to represent a class. The plaintiffs also allege the Company breached a fiduciary duty to them and the other class members by seeking to take undue advantage of them by failing to pay them appropriate wages. The
plaintiffs



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



seek compensatory and punitive damages on behalf of themselves and the class in an unspecified amount for all causes of action. An answer to the complaint
has been filed and discovery has commenced. The parties conducted an early mediation of this matter and have agreed to the terms of a settlement, which will require court approval. The settlement would require the Company to pay $2,500 to the
plaintiffs. As of December 31, 2003, the Company has adequate reserves to cover the amount. The Company anticipates concluding the settlement process during the first half of 2004.



On or about June 8, 2003, the Massachusetts Office of the Attorney General notified Wyndham that a complaint had been filed
with its Fair Labor and Practices Division against Wyndhams Westborough, Massachusetts location. According to the Office of the Attorney General, the complaint alleged that Wyndham-Westborough had violated certain provisions of
Massachusetts wage payment laws (Massachusetts General Statutes c. 149, § 152A) by failing to remit to its employees all amounts owed by statute. On or about January 2, 2004, Wyndham received notice of a second Attorney General complaint
also alleging a violation of c. 149, 152A, this time with respect to all of Wyndhams Massachusetts hotels. Although the Company intends to vigorously defend against these complaints, the Company has nevertheless fully cooperated with the
Attorney Generals office by providing it with documents and other information in hopes of quickly resolving these matters. Because the Office of the Attorney General does not disclose information regarding complaints made to it, it remains
unclear exactly who the complainants are, how many complainants are involved, and what the complaints allege. As such, it is impossible at this time to determine the exposure Wyndham could face in these matters.



The Company is a party to a number of other claims and lawsuits arising out
of the normal course of business. However, the Company does not consider the ultimate liability with respect to these other claims and lawsuits to be material in relation to the consolidated financial condition or operations of the Company.



8. Related Party Transactions:



Transactions with Certain Wyndham Directors



During 2003, 2002 and 2001, the Company received hotel management and
service fees in the aggregate amount of approximately $4,000, $4,242 and $6,133, respectively, from the owners of hotels in which Karim Alibhai, Rolf Ruhfus, Sherwood Weiser or Milton Fine holds an ownership interest.



Norman Brownstein, one of our directors, serves as chairman of Brownstein
Hyatt & Farber P.C., a law firm that has advised the Company on certain matters related to litigation and real property transactions. During 2003, the Company paid Brownstein Hyatt & Farber, P.C. approximately $139 in legal fees.



In connection with the merger of IHC and Patriot, IHC, Patriot, Mr. Fine
and certain other parties entered into a shareholders agreement, dated December 2, 1997. Pursuant to the terms of the shareholders agreement, Patriot must indemnify Mr. Fine for certain tax liabilities until December 2, 2007 or Mr. Fines
death, whichever occurs first. The amounts to be paid, if any, cannot be estimated at this time.



In connection with the sale on August 16, 1996 of certain property to the Company from an entity affiliated with Mr. Alibhai, the Company granted the
entity affiliated with Mr. Alibhai a profit participation interest. If the Company sells, exchanges or enters into a similar transaction with respect to the property and receives the minimum return set forth in the governing agreement, the entity
affiliated with Mr. Alibhai will be entitled to receive 25% of the proceeds in excess of the minimum return. The amounts to be paid, if any, cannot be estimated at this time.



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



In September 2003, the Company entered into a consulting agreement, which has a term of two years,
with Lynn Swann. Pursuant to the terms of the consulting agreement, Mr. Swann agreed to, among other things, make a certain number of personal appearances on the Companys behalf as well as make himself available for a certain number of
advertisements in order to promote the Company. In return for his services, the Company must pay Mr. Swann $250 per year. In addition, on September 1, 2003, the Company granted Mr. Swann 100,000 restricted shares of its class A common stock. The
restricted shares vest in two equal installments on the first and second anniversaries of the date of grant.



Loans to Certain Wyndham Executive Officers



In 1999, in connection with his employment agreement, the Company loaned Mr. Kleisner $500 pursuant to a recourse note for use in purchasing a residence
in Dallas, Texas. The note bears no interest. In 1999 and 2001, in connection with his employment agreement, the Company also loaned Mr. Kleisner $850 and $665, respectively, pursuant to nonrecourse notes. The notes bear interest at a rate equal to
the rate on the Companys senior credit facility. Despite the fact that the $850 note is non-recourse and has no personal liability to Mr. Kleisner, he repaid the note in full (principal plus accrued interest) on December 31, 2002, solely
from his personal funds. As of December 31, 2003, principal and accrued interest in the amount of $1,262 remained outstanding on these loans.



In 2000, in connection with his employment agreement, the Company loaned Mr. Teng $1,000 pursuant to a recourse note. The note bears interest at a rate
equal to the rate on the senior credit facility. Pursuant to the terms of his employment agreement, subject to Mr. Tengs continuing employment, the Company has agreed to forgive the principal amount of the note and all accrued but unpaid
interest on such forgiven principal amount in equal monthly installments over a three-year period. The note was fully amortized as of December 31, 2003.



In 2001, in connection with his employment agreement, the Company loaned Mr. Champ $250 pursuant to a recourse note. The note bears no interest. Pursuant
to the terms of his employment agreement, subject to Mr. Champs continuing employment, the Company has agreed to forgive the principal amount of the note in equal annual installments over a five-year period. In addition, the Company also
loaned Mr. Champ $450 pursuant to a nonrecourse note. The note bears interest at a rate equal to the rate on the senior credit facility. As of December 31, 2003, principal and accrued interest in the amount of $600 remained outstanding on these
loans.



Apollo Investors



During 2003, 2002 and 2001, the Company recognized hotel management, service
and franchise fees in the aggregate amount of $2,083, $2,196 and $1,358, respectively, from hotels in which certain entities affiliated with the Apollo Investors hold an ownership interest.



In 2000, the Company entered into a time share agreement with Tempus Resorts
International, Ltd. (Tempus), an entity affiliated with the Apollo Investors. The time share operates under the name Wyndham Vacation Club. During 2003 and 2002, the Company recognized fees in the aggregate amount of $470 and $32,
respectively.



9. 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



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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.



During 2003 and 2002, 145,293 and 50,949 OP units, respectively, in the
Patriot Partnership and Wyndham Partnership were redeemed for cash of $79 and $48, respectively. As of December 31, 2003, the Patriot Partnership and Wyndham Partnership had 943,005 OP units that were held by minority partners, which represent the
minority interest in the operating partnerships.



10. Shareholders
Equity:



Capital 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 series A and series B preferred stock, par value $0.01.



The 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;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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 class A 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.



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



For a period of 170 days following the completion of the investment, Wyndham was entitled to 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, with the proceeds from a rights offering. The rights offering was completed with the issuance by
Wyndham of 55,992 shares of series A preferred stock. Wyndham redeemed 55,992 shares of series B preferred stock. 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.



Shareholder 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.



Dividends and Stock Splits



The Company does not anticipate paying a dividend to the common shareholders
and is prohibited under the terms of the senior credit facility and increasing rate loans facility from paying dividends on the class A common stock. Also, the Company is prohibited under the terms of the January 24, 2002 amendments to the senior
credit facility and increasing rate loans facility from paying the cash portion of any dividends on the preferred stock. However, the holders of the preferred stock are entitled to receive on a quarterly basis a dividend equal to 9.75% per annum on
a cumulative basis payable in cash and additional shares of preferred stock. In addition, according to the terms of the series A and B preferred stock, if the cash dividends on the preferred stock are in arrears and unpaid for a period of 60 days or
more, then an additional amount of dividends shall accrue at a rate per annum equal to 2.0% of the stated amount of each share of preferred stock then outstanding from the last payment date on which cash dividends were to be paid in full until such
time as all cash dividends in arrears have been paid in full. Such additional dividends shall be cumulative and payable in additional shares of preferred stock.



During the year ended December 31, 2003, the Company issued stock dividends of approximately 990,964 shares of series A and series B preferred stock
with a value of $99,096. The Company deferred payment of the cash portion of the dividends of approximately $29,227. In addition, the Company issued an additional stock dividend of 272,592 shares of series A and series B preferred stock with a value
of $27,259 in payment of additional dividends at a rate of 2.0% per annum as cash dividends on the preferred stock were in arrears for at least 60 days as of December 31, 2003.



During the year ended December 31, 2002, the Company issued stock dividends of approximately 900,529 shares of series A and
series B preferred stock with a value of $90,053. The Company deferred payment of the cash portion of the dividends of approximately $17,658. In addition, the Company issued an additional stock



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



dividend of 365,059 shares of series A and series B preferred stock with a value of $36,506 in payment of additional dividends at a rate of 2.0% per annum as
cash dividends on the preferred stock were in arrears for at least 60 days as of December 31, 2002.



As of December 31, 2003, the deferred payments of the cash portion of the preferred stock dividend totaled approximately $73,100 and are included in
accounts payable and accrued expenses in the accompanying consolidated balance sheet.



Stock Incentive Plans



The Company has adopted certain employee incentive programs for the purpose of (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.



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 24, 2001, the stockholders approved the Second Amendment and Restatement of Wyndham International, Inc. 1997 Incentive Plan (the Amended Plan). Among other things, the amendment increases the number of shares available for grant
under the Amended Plan to an amount equal to 10.0% of the outstanding shares of class A common stock on a fully diluted basis. Under the Amended 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. The
Amended Plan also permits the Compensation Committee to provide in the agreement governing a restricted unit award that following a change in control in which the shares of class A common stock are changed into or exchanged for a different



F-32



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



kind of stock or other securities or cash or other property, the unvested portion of a restricted unit award shall thereafter upon vesting be settled in
stock, other securities, cash or other property upon such terms and subject to such conditions as the Compensation Committee may determine.



The Amended Plan also (i) deleted certain provisions that by their terms are no longer applicable to the Company following the restructuring in June 1999,
(ii) added a provision requiring that the Compensation Committee, which administers the Amended Plan, have at least two members, and (iii) made certain other minor provisions to the Amended Plan.



Stock Grant Awards



During 2003, 2002 and 2001 pursuant to the Amended Plan, the Board of
Directors awarded 450,000, 3,351,250 and 10,837,476 (including those amounts awarded through the tender offer, discussed below) restricted awards, respectively, to certain officers and employees of the Company. The Company has recorded $2,480,
$3,365 and $2,104 in 2003, 2002 and 2001, respectively, related to the restricted awards and such amount is included in general and administrative expense in the accompanying consolidated financial statements. The restricted stock grants do not
carry voting or dividend rights until vested. Subject to continued employment, vesting is 33% per year in years three, four and five and compensation expense is amortized ratably over five years.



Tender Offer



In November 2001, the Company offered a voluntary exchange program for
certain eligible employees of the Company. Eligible employees holding options granted on or after January 1, 2000 under the Amended Plan were able to exchange those options for restricted unit awards. One restricted unit was granted for each share
of class A common stock underlying the eligible options held by eligible employees. All tendered eligible options were cancelled upon the expiration of the offer on December 18, 2001. The restricted units were granted under the Amended Plan and will
vest on the third, fourth and fifth anniversaries of the date of grant. The total number of eligible options to be tendered was 5,598,326, of which 5,324,976 were tendered. Compensation expense of $2,342,989 was calculated as the product of the
number of restricted stock grants and the stock price on the date of grant. This amount is being amortized ratably over 5 years. The remaining 273,350 options that were not tendered are treated as variable awards following the accounting guidance
provided by Emerging Issues Task Force 00-23 paragraph 167. Variable accounting commences for all existing awards when the offer is made and, for those awards that are retained by employees because the offer is declined, variable accounting
continues until the award is exercised, is forfeited, or expires unexercised. The Company has recorded $192, $519 and $21 in 2003, 2002 and 2001, respectively, related to the restricted awards and such amount is included in general and
administrative expense in the accompanying consolidated financial statements.



Stock Option Awards



As
of December 31, 2003, pursuant to the incentive plans, the Company has authorized the grant of options for up to 14,531,549 shares. As of December 31, 2003, 12,626,227 options were exercisable at exercise prices of $0.61 to $30.40 per share; a total
of 26,950 shares were issued pursuant to exercise of options at exercise prices of $0.48 and $0.29, resulting in net proceeds of $12. As of December 31, 2002, 11,331,429 options were exercisable at exercise prices of $0.61 to $30.40 per share; no
options were exercised during 2002.



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 stock options under the fair value
method. The fair value for these options was estimated at the date of grant



F-33



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



using a Black-Scholes option pricing model with the following weighted average assumptions for 2003, 2002 and 2001, respectively: risk-free interest rates of
3.53%, 4.30% and 4.84%; dividend yields of 0%; volatility factors of the expected market price of the Companys common stock of $1.232, $1.239 and $1.084, 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.



A summary of the Companys stock option activity, and related information for the years ended December 31, 2003, 2002
and 2001 is as follows:



|                               |  |                |   |      |                              |      |                |        |   |                              |   |                |  |        |                              |  |   |     
|------------------------------ |  | -------------- | - | ---- | ---------------------------- | ---- | -------------- | ------ | - | ---------------------------- | - | -------------- |  | ------ | ---------------------------- |  | - | ----
|                               |  | 2003           |   | 2002 |                              | 2001
|                               |  | Options(000s) |   |      | WeightedAverageExercisePrice |      | Options(000s) |        |   | WeightedAverageExercisePrice |   | Options(000s) |  |        | WeightedAverageExercisePrice
|Outstanding, beginning of year |  | 14,175         |   |      | $                            | 5.94 |                | 14,224 |   |                              | $ | 6.07           |  | 20,116 |                              |  | $ | 8.23
|Granted                        |  | 475            |   |      |                              | 0.33 |                | 1,079  |   |                              |   | 0.35           |  | 365    |                              |  |   | 2.01
|Exercised                      |  | (27            | ) |      |                              | 0.47 |                |       |   |                              |   |               |  | (11    | )                            |  |   | 2.00
|Forfeited                      |  | (91            | ) |      |                              | 2.97 |                | (1,128 | ) |                              |   | 2.13           |  | (6,246 | )                            |  |   | 2.33
|                               |  |                |   |      |                              |      |                |        |   |                              |   |                |  |        |                              |  |   |     
|Outstanding, end of year       |  | 14,532         |   |      | $                            | 5.75 |                | 14,175 |   |                              | $ | 5.94           |  | 14,224 |                              |  | $ | 6.07
|                               |  |                |   |      |                              |      |                |        |   |                              |   |                |  |        |                              |  |   |     
|Exercisable at end of year     |  | 12,626         |   |      | $                            | 6.39 |                | 11,331 |   |                              | $ | 6.83           |  | 9,621  |                              |  | $ | 7.35
|                               |  |                |   |      |                              |      |                |        |   |                              |   |                |  |        |                              |  |   |     



Exercise prices for
options outstanding as of December 31, 2003, 2002 and 2001 ranged from $0.61 to $30.40. The weighted average remaining contractual life of those options was 3.2, 3.9 and 4.7 years, respectively.



The following table summarizes information about fixed stock options
outstanding at December 31, 2003:



|                         |  |                          |  |                                           |  |                              |       |                          |        |                              |   |      
|------------------------ |  | ------------------------ |  | ----------------------------------------- |  | ---------------------------- | ----- | ------------------------ | ------ | ---------------------------- | - | -----
|                         |  | Options Outstanding      |  | Options Exercisable                      
|Range of exercise prices |  | NumberOutstanding(000s) |  | Weighted AverageRemainingContractual Life |  | WeightedAverageExercisePrice |       | NumberExercisable(000s) |        | WeightedAverageExercisePrice
|$0.00  $3.04            |  | 3,716                    |  | 5.9                                       |  | $                            | 1.27  |                          | 2,334  |                              | $ | 1.76 
|$3.04  $6.08            |  | 6,634                    |  | 2.6                                       |  |                              | 4.66  |                          | 6,110  |                              |   | 4.69 
|$6.08  $9.12            |  | 1,644                    |  | 2.6                                       |  |                              | 6.58  |                          | 1,644  |                              |   | 6.58 
|$9.12  $12.16           |  | 1,177                    |  | 0.6                                       |  |                              | 10.83 |                          | 1,177  |                              |   | 10.83
|$12.16  15.20           |  | 278                      |  | 0.9                                       |  |                              | 12.77 |                          | 278    |                              |   | 12.77
|$15.20  $18.24          |  | 780                      |  | 1.8                                       |  |                              | 16.93 |                          | 780    |                              |   | 16.93
|$18.24  $21.28          |  | 41                       |  | 0.8                                       |  |                              | 20.43 |                          | 41     |                              |   | 20.43
|$21.28  $24.32          |  | 155                      |  | 3.4                                       |  |                              | 22.69 |                          | 155    |                              |   | 22.69
|$24.32  $27.36          |  |                         |  |                                          |  |                              |      |                          |       |                              |   |     
|$27.36  $30.40          |  | 107                      |  | 3.8                                       |  |                              | 30.40 |                          | 107    |                              |   | 30.40
|                         |  |                          |  |                                           |  |                              |       |                          |        |                              |   |      
|                         |  | 14,532                   |  | 3.2                                       |  | $                            | 5.75  |                          | 12,626 |                              | $ | 6.39 
|                         |  |                          |  |                                           |  |                              |       |                          |        |                              |   |      



F-34



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Weighted average fair values were calculated based on a theoretical pricing model. As our options are
not traded on any exchange, employees receive no value from holding them without an increase in the stock price of the attached shares.



11. Income Taxes:



The income tax provision for the years ended December 31, 2003, 2002 and 2001, respectively, is as follows:



|                         |  |      |          |   |      |   |          |      |  |   |          |  
|------------------------ |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                         |  | 2003 |          |   | 2002 |   |          | 2001 | 
|Current:                 |  |      |          |   |      |   |          |      |  |   |          |  
|Federal                  |  | $    | 2,271    |   |      | $ | 2,910    |      |  | $ | 2,916    |  
|State                    |  |      | 10,370   |   |      |   | 10,049   |      |  |   | 10,691   |  
|                         |  |      |          |   |      |   |          |      |  |   |          |  
|Total current            |  |      | 12,641   |   |      |   | 12,959   |      |  |   | 13,607   |  
|                         |  |      |          |   |      |   |          |      |  |   |          |  
|Deferred:                |  |      |          |   |      |   |          |      |  |   |          |  
|Federal                  |  |      | (125,444 | ) |      |   | (122,483 | )    |  |   | (90,645  | )
|State                    |  |      | (3,237   | ) |      |   | (19,623  | )    |  |   | (19,400  | )
|                         |  |      |          |   |      |   |          |      |  |   |          |  
|Total deferred           |  |      | (128,681 | ) |      |   | (142,106 | )    |  |   | (110,045 | )
|                         |  |      |          |   |      |   |          |      |  |   |          |  
|Total income tax benefit |  | $    | (116,040 | ) |      | $ | (129,147 | )    |  | $ | (96,438  | )
|                         |  |      |          |   |      |   |          |      |  |   |          |  



|                                                            |  |      |          |   |      |   |          |      |  |   |          |  
|----------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                            |  | 2003 |          |   | 2002 |   |          | 2001 | 
|Income tax (benefit) provision reconciliation:              |  |      |          |   |      |   |          |      |  |   |          |  
|Income tax benefit provision from continuing operations     |  | $    | (41,098  | ) |      | $ | (97,560  | )    |  | $ | (110,460 | )
|Income tax (benefit) provision from discontinued operations |  |      | (74,942  | ) |      |   | (31,587  | )    |  |   | 14,022   |  
|                                                            |  |      |          |   |      |   |          |      |  |   |          |  
|Total income tax benefit                                    |  | $    | (116,040 | ) |      | $ | (129,147 | )    |  | $ | (96,438  | )
|                                                            |  |      |          |   |      |   |          |      |  |   |          |  



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:



|                            |  |      |          |   |      |   |          |      |  |   |         |  
|--------------------------- |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                            |  | 2003 |          |   | 2002 |   |          | 2001 | 
|Tax at statutory rate       |  | $    | (175,914 | ) |      | $ | (114,281 | )    |  | $ | (74,590 | )
|State income taxes          |  |      | (17,537  | ) |      |   | (9,574   | )    |  |   | (8,709  | )
|Valuation allowance         |  |      | 81,132   |   |      |   | 6,935    |      |  |   |        |  
|Goodwill                    |  |      |         |   |      |   |         |      |  |   | 3,724   |  
|Minority interest and other |  |      | (3,721   | ) |      |   | (12,227  | )    |  |   | (16,863 | )
|                            |  |      |          |   |      |   |          |      |  |   |         |  
|Total income tax benefit    |  | $    | (116,040 | ) |      | $ | (129,147 | )    |  | $ | (96,438 | )
|                            |  |      |          |   |      |   |          |      |  |   |         |  



F-35



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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. Significant components of the Companys deferred tax assets and liabilities for the years ended December 31, 2003 and 2002,
respectively, are as follows:



|                                     |  |      |          |   |      |   |          |  
|------------------------------------ |  | ---- | -------- | - | ---- | - | -------- | -
|                                     |  | 2003 |          |   | 2002 |  
|Deferred tax assets:                 |  |      |          |   |      |   |          |  
|Net operating losses                 |  | $    | 323,337  |   |      | $ | 210,007  |  
|Hedging instruments                  |  |      | 23,734   |   |      |   | 38,254   |  
|Other non-current assets             |  |      | 31,906   |   |      |   | 31,621   |  
|                                     |  |      |          |   |      |   |          |  
|Total deferred tax assets            |  |      | 378,977  |   |      |   | 279,882  |  
|Valuation allowance                  |  |      | (105,449 | ) |      |   | (24,317  | )
|                                     |  |      |          |   |      |   |          |  
|Net deferred asset                   |  | $    | 273,528  |   |      | $ | 255,565  |  
|                                     |  |      |          |   |      |   |          |  
|Deferred tax liabilities:            |  |      |          |   |      |   |          |  
|Depreciation                         |  |      | (230,783 | ) |      |   | (318,222 | )
|Management contracts and trade names |  |      | (32,899  | ) |      |   | (34,931  | )
|Other non-current liabilities        |  |      | (49,845  | ) |      |   | (58,482  | )
|                                     |  |      |          |   |      |   |          |  
|Total deferred tax liabilities       |  |      | (313,527 | ) |      |   | (411,635 | )
|                                     |  |      |          |   |      |   |          |  
|Net deferred income tax liability    |  | $    | (39,999  | ) |      | $ | (156,070 | )
|                                     |  |      |          |   |      |   |          |  



As of December 31,
2003, the Company and certain affiliated subsidiaries have net operating loss carryforwards for Federal income tax purposes of approximately $785,000 which are available to offset future taxable income, if any, through 2023.



SFAS 109 requires that deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowance relates to net operating losses for which the Company believes that realization is uncertain. The valuation
allowance increased $81,132 and $6,935 for the years ended December 31, 2003 and 2002, respectively.



12. 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 aggregate expense under the plans totaled $258, $216 and $978
for the years ended December 31, 2003, 2002 and 2001, respectively.



The Company maintains a self-insured group health plan through a Voluntary Employee Benefit Association. 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 $5,921, $6,226 and $6,133 for the years ended December 31, 2003, 2002 and 2001,
respectively.



13. Segment Reporting:



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



F-36



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



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s three reportable segments are: Wyndham branded properties, non-proprietary branded hotel properties and other.



| |  | The Wyndham branded properties are: Wyndham Hotels & Resorts®, Wyndham Luxury Resorts®, Wyndham Garden Hotels®, and Summerfield Suites by Wyndham. Wyndham Hotels & Resorts® are upper upscale, full-service hotel properties that contain an average of 300 hotel rooms, generally between 15,000 and 315,000 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 Garden Hotels® 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 Hotels® libraries and laundry and room service. Summerfield Suites by Wyndham offers guests the highest quality lodging in the upper 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.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Non-proprietary branded properties include all properties which are not Wyndham branded hotel properties. The properties consist of non-Wyndham branded assets, such as
Doubletree®, Hilton®, Holiday Inn®, Ramada®, Crowne Plaza®, Hyatt®, Marriott®, Sheraton® and
independents.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Other includes management fee and service fee income, 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.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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.



|                             |  |                |           |                       |   |          |  |   |          |   |  |   |           |  
|---------------------------- |  | -------------- | --------- | --------------------- | - | -------- |  | - | -------- | - |  | - | --------- | -
|Year ended December 31,
2003 |  | Wyndhambranded |           | Nonproprietarybranded |   | Other(1) |  |   | Total    |  
|Total revenue                |  | $              | 1,107,695 |                       | $ | 146,041  |  | $ | 23,814   |   |  | $ | 1,277,550 |  
|Operating income (loss)      |  |                | 260,835   |                       |   | 26,536   |  |   | (480,966 | ) |  |   | (193,595  | )
|Segment assets               |  |                | 2,643,692 |                       |   | 341,490  |  |   | 797,945  |   |  |   | 3,783,127 |  
|Capital additions            |  |                | 52,609    |                       |   | 6,717    |  |   | 265      |   |  |   | 59,591    |  

---

|(1) | Operating income (loss) for 2003 includes $27,784 of impairment charges related to certain assets and $15,832 of charges related to losses on derivative instruments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-37



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



|                             |  |                |           |                       |   |           |  |   |          |   |  |   |           |  
|---------------------------- |  | -------------- | --------- | --------------------- | - | --------- |  | - | -------- | - |  | - | --------- | -
|Year ended December 31,
2002 |  | Wyndhambranded |           | Nonproprietarybranded |   | Other(1)  |  |   | Total    |  
|Total revenue                |  | $              | 1,133,426 |                       | $ | 193,679   |  | $ | 24,695   |   |  | $ | 1,351,800 |  
|Operating income (loss)      |  |                | 276,829   |                       |   | 38,664    |  |   | (557,675 | ) |  |   | (242,182  | )
|Segment assets               |  |                | 2,615,480 |                       |   | 1,054,631 |  |   | 803,347  |   |  |   | 4,473,458 |  
|Capital additions            |  |                | 46,762    |                       |   | 28,633    |  |   | 4,521    |   |  |   | 79,916    |  

---

|(1) | Operating income (loss) for 2002 includes $162 of impairment charges related to certain assets and $68,843 of charges related to losses on derivative instruments.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  |                |           |                       |   |           |  |   |          |   |  |   |           |  
|---------------------------- |  | -------------- | --------- | --------------------- | - | --------- |  | - | -------- | - |  | - | --------- | -
|Year ended December 31,
2001 |  | Wyndhambranded |           | Nonproprietarybranded |   | Other(1)  |  |   | Total    |  
|Total revenue                |  | $              | 1,176,353 |                       | $ | 274,297   |  | $ | 30,496   |   |  | $ | 1,481,146 |  
|Operating income (loss)      |  |                | 321,410   |                       |   | 66,287    |  |   | (647,763 | ) |  |   | (260,066  | )
|Segment assets               |  |                | 3,313,724 |                       |   | 1,544,836 |  |   | 911,393  |   |  |   | 5,769,953 |  
|Capital additions            |  |                | 148,599   |                       |   | 45,459    |  |   | 19,552   |   |  |   | 213,610   |  

---

|(1) | Operating income (loss) for 2001 includes $24,159 of impairment charges related to certain assets and $32,227 of charges related to losses on derivative instruments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table represents revenue and
long-lived asset information by geographic area for the years ended December 31, 2003, 2002 and 2001. Revenues are attributed to the United States and its territories and International based on the location of hotel properties.



|               |  |               |           |               |   |         |  |   |          
|-------------- |  | ------------- | --------- | ------------- | - | ------- |  | - | ---------
|2003           |  | United States |           | International |   | Total  
|Revenues       |  | $             | 1,251,002 |               | $ | 26,548  |  | $ | 1,277,550
|Segment assets |  |               | 3,668,814 |               |   | 114,313 |  |   | 3,783,127
|               |  |               |          
|2002           |  | United States |           | International |   | Total  
|Revenues       |  | $             | 1,326,504 |               | $ | 25,296  |  | $ | 1,351,800
|Segment assets |  |               | 4,357,442 |               |   | 116,016 |  |   | 4,473,458
|               |  |               |          
|2001           |  | United States |           | International |   | Total  
|Revenues       |  | $             | 1,455,372 |               | $ | 25,774  |  | $ | 1,481,146
|Segment assets |  |               | 5,638,619 |               |   | 131,334 |  |   | 5,769,953



14. Supplemental Cash Flow
Disclosure:



The Company adopted the provisions of SFAS
142 in the first quarter of 2002 and recorded an impairment charge of $324,102 as a cumulative effect of a change in accounting principle.



During 2003, 2002 and 2001, in connection with the termination of several contracts, the Company wrote-off the unamortized balance of management contract
costs of $306, $6,445 and $7,408, respectively, and in 2003 and 2001 wrote-off leasehold costs of $153,909 and $4,057. Also in 2003, the Company impaired and wrote-off $22,000 of the remaining book value of the lease on six Summerfield Suites by
Wyndham.



During 2003, 2002 and 2001, the Company issued stock dividends of 990,964,
900,529 and 817,828 shares of series A and series B preferred stock with a value of $99,096, $90,053 and $81,782, respectively. The



F-38



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



Company deferred payment of the cash portion of the 2003 and 2002 dividend, and the 2001 third and fourth quarter dividend totaling $73,100. In addition,
during 2003 and 2002, the Company issued an additional stock dividend of 272,592 and 365,059 shares of series A and series B preferred stock with a value of $27,259 and $36,506, respectively, in payment of additional dividends at a rate of 2.0% per
annum as cash dividends on the preferred stock were in arrears for at least 60 days as of December 31, 2003 and 2002.



For the year ended December 31, 2003, the Company recorded a reduction to the accrual of $36,054 for the change in the fair market value of the
ineffective derivatives with the offset recognized as a gain of $33,331. For the years ended December 31, 2002 and 2001, the Company recorded an accrual of $19,324 and $43,303, respectively, as a result of the change in the fair market value of the
ineffective derivatives with the offset recognized as a loss of $27,181 and $16,125, respectively. A charge to other comprehensive income of $1,220 (net of taxes of $1,077), $4,797 (net of taxes of $3,197) and $6,646 (net of taxes of $4,430), for
years ended December 31, 2003, 2002 and 2001, respectively, were recorded for the change in the fair market value of the effective derivatives. Also, in 2003, 2002 and 2001, the Company recorded amortization of $3,817 (net of taxes of $2,544),
$9,601 (net of taxes of $6,400) and $9,661 (net of taxes of $6,441), respectively, to earnings as a reduction of the transitional adjustment that was recorded in other comprehensive income in 2001. Additionally, the Company paid $49,163, $41,662 and
$15,373, in settlement payments for the ineffective hedges during the years ended December 31, 2003, 2002 and 2001, respectively.



During 2001, in connection with the redemption of the preferred stock in IH LLC, the Company received two promissory notes in the aggregate amount of
$4,432 as partial consideration for the redemption. The promissory notes were paid in May and June of 2002.



During 2001, the Company exchanged six assets with a net book value of $70,134 for the acquisition of one hotel with an estimated fair value of $61,308.



On August 15, 2003, the Company sold its 50 percent interest
in a hotel for $2,000 in a non-cash transaction for the release of a mortgage debt obligation.



F-39



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##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(dollars in thousands, except share amounts)



15. Quarterly Financial Information (unaudited):



|                                         |  |                    |          |   |         |   |         |              |  |   |             |   |  |   |          |  
|---------------------------------------- |  | ------------------ | -------- | - | ------- | - | ------- | ------------ |  | - | ----------- | - |  | - | -------- | -
|                                         |  | Three Months Ended |         
|                                         |  | March 31           |          |   | June 30 |   |         | September 30 |  |   | December 31 |  
|2003                                     |  |                    |          |   |         |   |         |              |  |   |             |   |  |   |          |  
|Total revenue                            |  | $                  | 419,439  |   |         | $ | 346,457 |              |  | $ | 300,894     |   |  | $ | 210,760  |  
|(Loss) income from continuing operations |  | $                  | (88,015  | ) |         | $ | (27,412 | )            |  | $ | (53,473     | ) |  | $ | 17,164   |  
|Loss from discontinued operations        |  | $                  | (19,398  | ) |         | $ | (64,101 | )            |  | $ | (35,624     | ) |  | $ | (118,753 | )
|Loss before accounting change            |  | $                  | (107,413 | ) |         | $ | (91,513 | )            |  | $ | (89,097     | ) |  | $ | (101,589 | )
|Net loss                                 |  | $                  | (107,413 | ) |         | $ | (91,513 | )            |  | $ | (89,097     | ) |  | $ | (101,589 | )
|Net loss per common share:               |  |                    |          |   |         |   |         |              |  |   |             |   |  |   |          |  
|Basic                                    |  | $                  | (0.87    | ) |         | $ | (0.77   | )            |  | $ | (0.76       | ) |  | $ | (0.84    | )
|Diluted                                  |  | $                  | (0.87    | ) |         | $ | (0.77   | )            |  | $ | (0.76       | ) |  | $ | (0.84    | )
|                                         |  |                    |          |  
|2002                                     |  |                    |          |   |         |   |         |              |  |   |             |   |  |   |          |  
|Total revenue                            |  | $                  | 442,038  |   |         | $ | 376,006 |              |  | $ | 311,524     |   |  | $ | 222,232  |  
|Loss from continuing operations          |  | $                  | (17,831  | ) |         | $ | (41,071 | )            |  | $ | (67,665     | ) |  | $ | (17,274  | )
|Loss from discontinued operations        |  | $                  | (1,244   | ) |         | $ | (294    | )            |  | $ | (10,529     | ) |  | $ | (42,416  | )
|Loss before accounting change            |  | $                  | (19,075  | ) |         | $ | (41,365 | )            |  | $ | (78,194     | ) |  | $ | (59,690  | )
|Net loss                                 |  | $                  | (343,177 | ) |         | $ | (41,365 | )            |  | $ | (78,194     | ) |  | $ | (59,690  | )
|Net loss per common share:               |  |                    |          |   |         |   |         |              |  |   |             |   |  |   |          |  
|Basic                                    |  | $                  | (2.25    | ) |         | $ | (0.46   | )            |  | $ | (0.68       | ) |  | $ | (0.58    | )
|Diluted                                  |  | $                  | (2.25    | ) |         | $ | (0.46   | )            |  | $ | (0.68       | ) |  | $ | (0.58    | )



16. Subsequent Event:



During January 2004, the Company sold its investments in
nine hotel entities for net proceeds of $45,625 after payment of mortgage debt of $96,518. The Company used $34,762 of the net cash proceeds to pay down a portion of the senior credit facility and increasing rate loans facility, and retained the
rest of the net cash proceeds in accordance with the terms of the senior credit facilities.



In March 2004, the leases on six Summerfield Suites by Wyndham properties were terminated and the properties were converted to long-term franchises. Assets of approximately $22,000, which represented the
leases remaining book value, were considered impaired and written-off as of December 31, 2003.



F-40



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

As of December 31, 2003, 2002 and 2001

(dollars in thousands)



|                                   |  |                              |        |                                           |   |                                  |  |            |   |                        |   |        |  |   |        
|---------------------------------- |  | ---------------------------- | ------ | ----------------------------------------- | - | -------------------------------- |  | ---------- | - | ---------------------- | - | ------ |  | - | -------
|                                   |  | Balance atBeginningof Period |        | AdditionsCharged toCost, Expenses,Revenue |   | AdditionsCharged toOtherAccounts |  | Deductions |   | Balance atEnd ofPeriod
|Allowance for doubtful accounts:   |  |                              |        |                                           |   |                                  |  |            |   |                        |   |        |  |   |        
|2003                               |  | $                            | 5,172  |                                           | $ | 15,625                           |  | $          |  |                        | $ | 16,308 |  | $ | 4,489  
|2002                               |  |                              | 11,188 |                                           |   | 11,161                           |  |            |  |                        |   | 17,177 |  |   | 5,172  
|2001                               |  |                              | 6,810  |                                           |   | 15,851                           |  |            |  |                        |   | 11,473 |  |   | 11,188 
|                                   |  |                              |        |                                           |  
|Allowance for deferred tax assets: |  |                              |        |                                           |   |                                  |  |            |   |                        |   |        |  |   |        
|2003                               |  | $                            | 24,317 |                                           | $ | 81,132                           |  | $          |  |                        | $ |       |  | $ | 105,449
|2002                               |  |                              | 17,382 |                                           |   | 6,935                            |  |            |  |                        |   |       |  |   | 24,317 
|2001                               |  |                              | 17,382 |                                           |   |                                 |  |            |  |                        |   |       |  |   | 17,382 



F-41



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION



As of December 31, 2003

(dollars in thousands)



|                                                    |  |              |        |                            |   |                                           |  |                           |                                                      |  |       |       |                                |   |         |           |  |                     |        |  |   |         |  |   |         |  |   |         |   |  |      |  |     
|--------------------------------------------------- |  | ------------ | ------ | -------------------------- | - | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- |  | ----- | ----- | ------------------------------ | - | ------- | --------- |  | ------------------- | ------ |  | - | ------- |  | - | ------- |  | - | ------- | - |  | ---- |  | ----
|Description                                         |  | Encumbrances |        | Initial Cost               |   | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |  | Total |       | AccumulatedDepreciation (b)(c) |   |         | YearBuilt |  | Date of Acquisition
|                                                    |  | Land         |        | Buildings and Improvements |   | Land                                      |  | Buildings andImprovements |                                                      |  | Land  |       | Buildings and Improvements     |   |         |           | 
|Wyndham Branded Hotels:                             |  |              |        |                            |   |                                           |  |                           |                                                      |  |       |       |                                |   |         |           |  |                     |        |  |   |         |  |   |         |  |   |         |   |  |      |  |     
|Wyndham AtlantaAtlanta, Georgia                     |  | $            | 24,479 |                            | $ | 3,303                                     |  | $                         | 12,712                                               |  | $     |      |                                | $ | 25,818  |           |  | $                   | 3,303  |  | $ | 38,530  |  | $ | 41,833  |  | $ | (4,742  | ) |  | 1999 |  | 1998
|Wyndham ArlingtonArlington, Texas                   |  |              |       |                            |   |                                          |  |                           | 63,045                                               |  |       |      |                                |   | 1,028   |           |  |                     |       |  |   | 64,073  |  |   | 64,073  |  |   | (10,024 | ) |  | 1985 |  | 1998
|Wyndham BaltimoreBaltimore, Maryland                |  |              | 34,328 |                            |   | 1,129                                     |  |                           | 49,491                                               |  |       |      |                                |   | (12,820 | )         |  |                     | 1,129  |  |   | 36,671  |  |   | 37,800  |  |   | (7,465  | ) |  | 1968 |  | 1997
|Wyndham Bel AgeHollywood, California                |  |              | 9,452  |                            |   | 5,653                                     |  |                           | 32,212                                               |  |       |      |                                |   | 3,569   |           |  |                     | 5,653  |  |   | 35,781  |  |   | 41,434  |  |   | (5,845  | ) |  | 1984 |  | 1997
|Wyndham Bristol Place Hotel Toronto, Canada         |  |              |       |                            |   | 3,048                                     |  |                           | 15,503                                               |  |       |      |                                |   | 463     |           |  |                     | 3,048  |  |   | 15,966  |  |   | 19,014  |  |   | (2,650  | ) |  | 1974 |  | 1998
|Wyndham BostonBoston, Massachusetts                 |  |              | 44,332 |                            |   |                                          |  |                           | 33,900                                               |  |       | 7,458 |                                |   | 40,823  |           |  |                     | 7,458  |  |   | 74,723  |  |   | 82,181  |  |   | (9,403  | ) |  | 1999 |  | 1998
|Wyndham AndoverAndover, Massachusetts               |  |              |       |                            |   | 2,318                                     |  |                           | 33,245                                               |  |       |      |                                |   | 12,190  |           |  |                     | 2,318  |  |   | 45,435  |  |   | 47,753  |  |   | (6,348  | ) |  | 1985 |  | 1998
|Wyndham Westborough Westborough, Massachusetts      |  |              |       |                            |   | 1,500                                     |  |                           | 41,968                                               |  |       |      |                                |   | 801     |           |  |                     | 1,500  |  |   | 42,769  |  |   | 44,269  |  |   | (6,557  | ) |  | 1985 |  | 1998
|Wyndham Palace Resort & Spa Orlando, Florida        |  |              | 42,413 |                            |   |                                          |  |                           | 144,264                                              |  |       |      |                                |   | 9,433   |           |  |                     |       |  |   | 153,697 |  |   | 153,697 |  |   | (24,969 | ) |  | 1977 |  | 1998
|Wyndham Buttes ResortTempe, Arizona                 |  |              | 37,918 |                            |   |                                          |  |                           | 55,297                                               |  |       |      |                                |   | 1,487   |           |  |                     |       |  |   | 56,784  |  |   | 56,784  |  |   | (9,926  | ) |  | 1986 |  | 1997
|Wyndham New OrleansNew Orleans, Louisiana           |  |              |       |                            |   | 12,750                                    |  |                           | 86,141                                               |  |       |      |                                |   | 2,728   |           |  |                     | 12,750 |  |   | 88,869  |  |   | 101,619 |  |   | (10,094 | ) |  | 1984 |  | 1999
|Wyndham ChicagoChicago, Illinois                    |  |              |       |                            |   | 4,963                                     |  |                           | 33,752                                               |  |       |      |                                |   | 31,788  |           |  |                     | 4,963  |  |   | 65,540  |  |   | 70,503  |  |   | (7,584  | ) |  | 1999 |  | 2000
|Wyndham City CenterWashington, District of Columbia |  |              |       |                            |   | 3,657                                     |  |                           | 30,569                                               |  |       |      |                                |   | 3,082   |           |  |                     | 3,657  |  |   | 33,651  |  |   | 37,308  |  |   | (5,694  | ) |  | 1969 |  | 1997



F-42



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                                                      |  |              |  |                            |  |                                           |  |                           |                                                      |        |       |  |                                |  |        |           |        |                     |         |   |  |      |  |     
|--------------------------------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- | ------ | ----- |  | ------------------------------ |  | ------ | --------- | ------ | ------------------- | ------- | - |  | ---- |  | ----
|Description                                                           |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |        | Total |  | AccumulatedDepreciation (b)(c) |  |        | YearBuilt |        | Date of Acquisition
|                                                                      |  | Land         |  | Buildings and Improvements |  | Land                                      |  | Buildings andImprovements |                                                      |        | Land  |  | Buildings and Improvements     |  |        |           |       
|Wyndham Colorado SpringsColorado Springs, Colorado                    |  |             |  | 1,783                      |  | 53,252                                    |  |                          |                                                      | 564    |       |  | 1,783                          |  | 53,816 |           | 55,599 |                     | (8,310  | ) |  | 1989 |  | 1998
|Wyndham Emerald PlazaSan Diego, California                            |  | 39,557       |  | 5,551                      |  | 60,462                                    |  | 17                        |                                                      | 1,488  |       |  | 5,568                          |  | 61,950 |           | 67,518 |                     | (10,450 | ) |  | 1991 |  | 1997
|Wyndham Philadelphia at Franklin Plaza Philadelphia, Pennsylvania     |  | 65,353       |  | 4,878                      |  | 62,793                                    |  |                          |                                                      | 5,580  |       |  | 4,878                          |  | 68,373 |           | 73,251 |                     | (11,334 | ) |  | 1979 |  | 1997
|Wyndham Harbour IslandTampa, Florida                                  |  |             |  |                           |  | 22,836                                    |  |                          |                                                      | 479    |       |  |                               |  | 23,315 |           | 23,315 |                     | (6,392  | ) |  | 1986 |  | 1998
|Wyndham Miami Beach ResortMiami, Florida                              |  |             |  | 13,000                     |  | 54,875                                    |  |                          |                                                      | 843    |       |  | 13,000                         |  | 55,718 |           | 68,718 |                     | (8,657  | ) |  | 1962 |  | 1998
|Wyndham Miami AirportMiami, Florida                                   |  |             |  | 2,561                      |  | 23,009                                    |  |                          |                                                      | 668    |       |  | 2,561                          |  | 23,677 |           | 26,238 |                     | (4,149  | ) |  | 1976 |  | 1997
|Wyndham NewarkNewark, New Jersey                                      |  |             |  | 10,000                     |  |                                          |  |                          |                                                      | 53,773 |       |  | 10,000                         |  | 53,773 |           | 63,773 |                     | (3,096  | ) |  | 2001 |  | 2001
|Wyndham Northwest ChicagoItasca, Illinois                             |  | 24,829       |  | 1,212                      |  | 52,025                                    |  |                          |                                                      | 3,498  |       |  | 1,212                          |  | 55,523 |           | 56,735 |                     | (9,193  | ) |  | 1983 |  | 1997
|Wyndham Peachtree Conference Center Peachtree City (Atlanta), Georgia |  | 16,731       |  | 3,059                      |  | 21,915                                    |  | 33                        |                                                      | 5,338  |       |  | 3,092                          |  | 27,253 |           | 30,345 |                     | (6,021  | ) |  | 1984 |  | 1995
|Wyndham Pittsburgh AirportCorapolis, Pennsylvania                     |  | 6,884        |  | 3,000                      |  | 54,780                                    |  |                          |                                                      | 390    |       |  | 3,000                          |  | 55,170 |           | 58,170 |                     | (8,691  | ) |  | 1987 |  | 1998
|Wyndham Richmond AirportRichmond, Virginia                            |  |             |  |                           |  | 4,262                                     |  |                          |                                                      | 3,523  |       |  |                               |  | 7,785  |           | 7,785  |                     | (2,078  | ) |  | 1997 |  | 1998
|Wyndham ToledoToledo, Ohio                                            |  |             |  |                           |  | 16,082                                    |  |                          |                                                      | (7,463 | )     |  |                               |  | 8,619  |           | 8,619  |                     | (1,854  | ) |  | 1985 |  | 1997
|Wyndham Riverfront HotelNew Orleans, Louisiana                        |  |             |  | 2,774                      |  | 28,023                                    |  |                          |                                                      | 10,637 |       |  | 2,774                          |  | 38,660 |           | 41,434 |                     | (5,987  | ) |  | 1996 |  | 1997
|Wyndham Roanoke AirportRoanoke, Virginia                              |  |             |  | 1,653                      |  | 27,693                                    |  |                          |                                                      | 402    |       |  | 1,653                          |  | 28,095 |           | 29,748 |                     | (4,329  | ) |  | 1983 |  | 1998



F-43



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                                         |  |              |  |                            |  |                                           |  |                                                      |                           |       |        |                                |                            |  |           |  |                     |  |         |   |  |      |  |     
|-------------------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ---------------------------------------------------- | ------------------------- | ----- | ------ | ------------------------------ | -------------------------- |  | --------- |  | ------------------- |  | ------- | - |  | ---- |  | ----
|Description                                              |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  | Gross Amounts atWhich Carried at Close of Period (a) |                           | Total |        | AccumulatedDepreciation (b)(c) |                            |  | YearBuilt |  | Date of Acquisition
|                                                         |  | Land         |  | Buildings and Improvements |  | Land                                      |  |                                                      | Buildings andImprovements |       | Land   |                                | Buildings and Improvements |  |           |  |                    
|Wyndham SyracuseSyracuse, New York                       |  | 12,785       |  | 1,150                      |  | 29,236                                    |  |                                                     |                           |       | 1,171  |                                | 1,150                      |  | 30,407    |  | 31,557              |  | (4,697  | ) |  | 1977 |  | 1998
|Wyndham Washington D.C. Washington, District of Columbia |  |             |  | 4,750                      |  | 40,439                                    |  |                                                     |                           |       | 407    |                                | 4,750                      |  | 40,846    |  | 45,596              |  | (6,358  | ) |  | 1983 |  | 1998
|Wyndham LisleLisle, Illinois                             |  | 9,351        |  | 1,995                      |  | 24,726                                    |  |                                                     |                           |       | 1,315  |                                | 1,995                      |  | 26,041    |  | 28,036              |  | (4,008  | ) |  | 1987 |  | 1998
|Wyndham Westshore HotelTampa, Florida                    |  |             |  | 1,448                      |  | 31,565                                    |  |                                                     |                           |       | 870    |                                | 1,448                      |  | 32,435    |  | 33,883              |  | (5,813  | ) |  | 1984 |  | 1997
|Wyndham Windwatch Haupauge, New York                     |  |             |  | 6,471                      |  | 21,831                                    |  | 270                                                  |                           |       | 646    |                                | 6,741                      |  | 22,477    |  | 29,218              |  | (4,478  | ) |  | 1989 |  | 1996
|Wyndham Rose Hall Montego Bay, Jamaica                   |  |             |  | 5,610                      |  | 55,467                                    |  |                                                     |                           |       | 3,676  |                                | 5,610                      |  | 59,143    |  | 64,753              |  | (9,582  | ) |  | 1972 |  | 1998
|Wyndham El San Juan San Juan, Puerto Rico                |  | 79,794       |  | 22,337                     |  | 34,244                                    |  |                                                     |                           |       | 23,944 |                                | 22,337                     |  | 58,188    |  | 80,525              |  | (10,773 | ) |  | 1983 |  | 1998
|Wyndham El ConquistadorFajardo, Puerto Rico              |  | 116,855      |  | 20,254                     |  | 190,607                                   |  | (529                                                 | )                         |       | 14,104 |                                | 19,725                     |  | 204,711   |  | 224,436             |  | (33,941 | ) |  | 1993 |  | 1998
|Wyndham Casa Marina Resort Key West, Florida             |  | 43,500       |  | 15,158                     |  | 85,078                                    |  |                                                     |                           |       | 3,180  |                                | 15,158                     |  | 88,258    |  | 103,416             |  | (13,709 | ) |  | 1980 |  | 1998
|Wyndham Reach ResortKey West, Florida                    |  | 13,965       |  | 10,029                     |  | 24,947                                    |  |                                                     |                           |       | 2,295  |                                | 10,029                     |  | 27,242    |  | 37,271              |  | (4,155  | ) |  | 1978 |  | 1998
|Wyndham Commerce Commerce, California                    |  |             |  | 2,116                      |  | 26,497                                    |  |                                                     |                           |       | 638    |                                | 2,116                      |  | 27,135    |  | 29,251              |  | (4,560  | ) |  | 1991 |  | 1998
|WyndhamIndianapolisIndianapolis, Indiana                |  | 5,203        |  | 513                        |  | 15,497                                    |  |                                                     |                           |       | 4,643  |                                | 513                        |  | 20,140    |  | 20,653              |  | (2,782  | ) |  | 1990 |  | 1998
|Wyndham GardenLaGuardia East Elmhurst, New York         |  |             |  | 1,800                      |  | 16,443                                    |  |                                                     |                           |       | 7,908  |                                | 1,800                      |  | 24,351    |  | 26,151              |  | (2,975  | ) |  | 1988 |  | 1997
|WyndhamMarket CenterDallas, Texas                       |  |             |  | 967                        |  | 12,796                                    |  |                                                     |                           |       | 683    |                                | 967                        |  | 13,479    |  | 14,446              |  | (2,227  | ) |  | 1968 |  | 1998



F-44



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##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                               |  |              |  |                            |  |                                           |  |                           |                                                      |        |       |  |                                |  |         |           |         |                     |         |   |  |      |  |     
|---------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- | ------ | ----- |  | ------------------------------ |  | ------- | --------- | ------- | ------------------- | ------- | - |  | ---- |  | ----
|Description                                    |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |        | Total |  | AccumulatedDepreciation (b)(c) |  |         | YearBuilt |         | Date of Acquisition
|                                               |  | Land         |  | Buildings and Improvements |  | Land                                      |  | Buildings andImprovements |                                                      |        | Land  |  | Buildings and Improvements     |  |         |           |        
|Wyndham ViningsAtlanta, Georgia                |  | 9,675        |  | 1,700                      |  | 22,853                                    |  | 14                        |                                                      | 1,017  |       |  | 1,714                          |  | 23,870  |           | 25,584  |                     | (3,962  | ) |  | 1985 |  | 1998
|Wyndham TutwilerBirmingham, Alabama            |  |             |  | 1,417                      |  | 8,124                                     |  |                          |                                                      | (483   | )     |  | 1,417                          |  | 7,641   |           | 9,058   |                     | (1,602  | ) |  | 1913 |  | 1996
|Wyndham TremontBoston, Massachusetts           |  |             |  | 1,776                      |  | 14,066                                    |  | 19                        |                                                      | 10,715 |       |  | 1,795                          |  | 24,781  |           | 26,576  |                     | (4,834  | ) |  | 1925 |  | 1996
|Wyndham Union StationNashville, Tennessee      |  |             |  |                           |  | 7,512                                     |  |                          |                                                      | 770    |       |  |                               |  | 8,282   |           | 8,282   |                     | (1,504  | ) |  | 1986 |  | 1997
|Wyndham Coconut GroveMiami, Florida            |  |             |  | 3,066                      |  | 28,442                                    |  | 1,235                     |                                                      | (3,868 | )     |  | 4,301                          |  | 24,574  |           | 28,875  |                     | (4,498  | ) |  | 1983 |  | 1997
|Wyndham Peaks Resort & Spa Telluride, Colorado |  |             |  | 2,452                      |  | 13,997                                    |  |                          |                                                      | 990    |       |  | 2,452                          |  | 14,987  |           | 17,439  |                     | (2,977  | ) |  | 1992 |  | 1997
|Wyndham Luxury Resorts:                        |  |              |  |                            |  |                                           |  |                           |                                                      |        |       |  |                                |  |         |           |         |                     |         |   |  |      |  |     
|Carmel Valley RanchCarmel, California          |  |             |  | 4,430                      |  | 14,704                                    |  | 334                       |                                                      | 11,049 |       |  | 4,764                          |  | 25,753  |           | 30,517  |                     | (4,647  | ) |  | 1987 |  | 1997
|The BouldersCarefree, Arizona                  |  |             |  | 12,825                     |  | 121,700                                   |  |                          |                                                      | 13,101 |       |  | 12,825                         |  | 134,801 |           | 147,626 |                     | (25,003 | ) |  | 1985 |  | 1997
|Summerfield Suites:                            |  |              |  |                            |  |                                           |  |                           |                                                      |        |       |  |                                |  |         |           |         |                     |         |   |  |      |  |     
|Summerfield Denver South Englewood, Colorado   |  |             |  | 1,072                      |  | 8,183                                     |  | 18                        |                                                      | 84     |       |  | 1,090                          |  | 8,267   |           | 9,357   |                     | (1,377  | ) |  | 1997 |  | 1998
|Summerfield HanoverWhippany, New Jersey        |  |             |  | 2,223                      |  | 18,585                                    |  |                          |                                                      | 182    |       |  | 2,223                          |  | 18,767  |           | 20,990  |                     | (2,936  | ) |  | 1997 |  | 1998
|Summerfield MorristownMorristown, New Jersey   |  |             |  | 3,050                      |  | 20,920                                    |  |                          |                                                      | 84     |       |  | 3,050                          |  | 21,004  |           | 24,054  |                     | (3,267  | ) |  | 1997 |  | 1998
|Summerfield SeattleSeattle, Washington         |  | 19,669       |  | 1,515                      |  | 24,276                                    |  | 16                        |                                                      | 2,918  |       |  | 1,531                          |  | 27,194  |           | 28,725  |                     | (5,642  | ) |  | 1985 |  | 1996
|Summerfield WalthamWaltham, Massachusetts      |  |             |  | 2,639                      |  | 16,351                                    |  |                          |                                                      | 145    |       |  | 2,639                          |  | 16,496  |           | 19,135  |                     | (2,631  | ) |  | 1997 |  | 1998



F-45



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                            |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |        |           |        |                     |         |   |  |      |  |     
|------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- | ------- | ----- |  | ------------------------------ |  | ------ | --------- | ------ | ------------------- | ------- | - |  | ---- |  | ----
|Description                                 |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |         | Total |  | AccumulatedDepreciation (b)(c) |  |        | YearBuilt |        | Date of Acquisition
|                                            |  | Land         |  | Buildings and Improvements |  | Land                                      |  | Buildings andImprovements |                                                      |         | Land  |  | Buildings and Improvements     |  |        |           |       
|Summerfield MiamiMiami, Florida             |  |             |  | 3,327                      |  | 10,913                                    |  |                          |                                                      | (56     | )     |  | 3,327                          |  | 10,857 |           | 14,184 |                     | (1,310  | ) |  | 1999 |  | 1999
|Non-Proprietary Brand Properties:           |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |        |           |        |                     |         |   |  |      |  |     
|Crowne Plaza RaviniaAtlanta, Georgia        |  | 43,546       |  | 2,996                      |  | 34,798                                    |  |                          |                                                      | 4,796   |       |  | 2,996                          |  | 39,594 |           | 42,590 |                     | (8,621  | ) |  | 1986 |  | 1995
|Doubletree TallahasseeTallahassee, Florida  |  | 17,118       |  | 2,127                      |  | 7,779                                     |  |                          |                                                      | 3,100   |       |  | 2,127                          |  | 10,879 |           | 13,006 |                     | (2,147  | ) |  | 1977 |  | 1996
|Doubletree Des PlainesDes Plaines, Illinois |  | 4,383        |  | 1,903                      |  | 5,555                                     |  |                          |                                                      | 3,614   |       |  | 1,903                          |  | 9,169  |           | 11,072 |                     | (1,783  | ) |  | 1969 |  | 1996
|Doubletree Park PlaceMinneapolis, Minnesota |  |             |  | 2,188                      |  | 13,531                                    |  |                          |                                                      | 3,961   |       |  | 2,188                          |  | 17,492 |           | 19,680 |                     | (3,205  | ) |  | 1981 |  | 1997
|Hyatt RegencyLexington, Kentucky            |  |             |  |                           |  | 11,958                                    |  |                          |                                                      | 1,358   |       |  |                               |  | 13,316 |           | 13,316 |                     | (2,791  | ) |  | 1977 |  | 1996
|Hilton ClevelandIndependence, Ohio          |  | 12,241       |  | 2,760                      |  | 12,264                                    |  | 29                        |                                                      | 1,180   |       |  | 2,789                          |  | 13,444 |           | 16,233 |                     | (3,108  | ) |  | 1980 |  | 1995
|Hilton NewarkNewark, New Jersey             |  | 16,812       |  | 1,740                      |  | 31,262                                    |  |                          |                                                      | (8,084  | )     |  | 1,740                          |  | 23,178 |           | 24,918 |                     | (4,299  | ) |  | 1971 |  | 1998
|Hilton DenverGreenwood Village, Colorado    |  |             |  | 1,800                      |  | 42,003                                    |  |                          |                                                      | (21,144 | )     |  | 1,800                          |  | 20,859 |           | 22,659 |                     | (4,679  | ) |  | 1982 |  | 1998
|Hilton Ft. LauderdaleDania, Florida         |  |             |  | 2,651                      |  | 24,748                                    |  |                          |                                                      | 11,021  |       |  | 2,651                          |  | 35,769 |           | 38,420 |                     | (4,840  | ) |  | 1988 |  | 1998
|Hilton ParsipannyParsipanny, New Jersey     |  | 53,873       |  | 5,350                      |  | 87,775                                    |  |                          |                                                      | 2,367   |       |  | 5,350                          |  | 90,142 |           | 95,492 |                     | (14,065 | ) |  | 1981 |  | 1998
|Holiday Inn San AngeloSan Angelo, Texas     |  |             |  | 428                        |  | 3,982                                     |  | 11                        |                                                      | 248     |       |  | 439                            |  | 4,230  |           | 4,669  |                     | (962    | ) |  | 1984 |  | 1995
|Holiday Inn HoustonHouston, Texas           |  |             |  | 333                        |  | 2,324                                     |  | 4                         |                                                      | 472     |       |  | 337                            |  | 2,796  |           | 3,133  |                     | (613    | ) |  | 1982 |  | 1995



F-46



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                               |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |           |           |           |                     |          |   |  |      |  |     
|---------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- | ------- | ----- |  | ------------------------------ |  | --------- | --------- | --------- | ------------------- | -------- | - |  | ---- |  | ----
|Description                                    |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |         | Total |  | AccumulatedDepreciation (b)(c) |  |           | YearBuilt |           | Date of Acquisition
|                                               |  | Land         |  | Buildings and Improvements |  | Land                                      |  | Buildings andImprovements |                                                      |         | Land  |  | Buildings and Improvements     |  |           |           |          
|Holiday Inn WestlakeWestlake, Ohio             |  |             |  | 2,843                      |  | 14,218                                    |  |                          |                                                      | (8,689  | )     |  | 2,843                          |  | 5,529     |           | 8,372     |                     | (1,814   | ) |  | 1980 |  | 1997
|Marriott Atlanta North CentralAtlanta, Georgia |  |             |  |                           |  | 36,462                                    |  |                          |                                                      | (23,751 | )     |  |                               |  | 12,711    |           | 12,711    |                     | (3,429   | ) |  | 1975 |  | 1998
|Marriott HarrisburgHarrisburg, Pennsylvania    |  | 14,038       |  | 3,400                      |  | 38,304                                    |  |                          |                                                      | (19,978 | )     |  | 3,400                          |  | 18,326    |           | 21,726    |                     | (3,802   | ) |  | 1980 |  | 1998
|Radisson BurlingtonBurlington, Vermont         |  | 30,143       |  | 935                        |  | 28,453                                    |  |                          |                                                      | (6,577  | )     |  | 935                            |  | 21,876    |           | 22,811    |                     | (3,195   | ) |  | 1975 |  | 1998
|Radisson New OrleansNew Orleans, Louisiana     |  |             |  | 2,463                      |  | 23,630                                    |  | 43                        |                                                      | 6,567   |       |  | 2,506                          |  | 30,197    |           | 32,703    |                     | (5,672   | ) |  | 1924 |  | 1995
|Radisson Town & Country Houston, Texas         |  | 7,893        |  | 655                        |  | 9,725                                     |  | 7                         |                                                      | 971     |       |  | 662                            |  | 10,696    |           | 11,358    |                     | (2,380   | ) |  | 1986 |  | 1995
|Park ShoreHonolulu, Hawaii                     |  |             |  |                           |  | 24,339                                    |  |                          |                                                      | 5,781   |       |  |                               |  | 30,120    |           | 30,120    |                     | (4,760   | ) |  | 1968 |  | 1997
|RegencySan Juan, Puerto Rico                   |  |             |  | 4,910                      |  | 4,208                                     |  |                          |                                                      | 1,025   |       |  | 4,910                          |  | 5,233     |           | 10,143    |                     | (1,235   | ) |  | 1963 |  | 1998
|Condado PlazaSan Juan, Puerto Rico             |  | 94,369       |  | 5,700                      |  | 72,982                                    |  | 4,263                     |                                                      | 19,241  |       |  | 9,963                          |  | 92,223    |           | 102,186   |                     | (13,573  | ) |  | 1959 |  | 1998
|Other:                                         |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |           |           |           |                     |          |   |  |      |  |     
|Golden Door SpaEscondido, California           |  |             |  | 5,800                      |  | 3,000                                     |  |                          |                                                      | 474     |       |  | 5,800                          |  | 3,474     |           | 9,274     |                     | (503     | ) |  | 1954 |  | 1998
|                                               |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |           |           |           |                     |          |   |  |      |  |     
|Assets Held for Use                            |  | 951,489      |  | 274,864                    |  | 2,587,405                                 |  | 13,242                    |                                                      | 280,191 |       |  | 288,106                        |  | 2,867,596 |           | 3,155,702 |                     | (469,566 | ) |  |      |  |     
|                                               |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |           |           |           |                     |          |   |  |      |  |     
|Wyndham FairmountSan Antonio, Texas            |  |             |  |                           |  | 2,957                                     |  |                          |                                                      | 398     |       |  |                               |  | 3,355     |           | 3,355     |                     | (700     | ) |  | 1906 |  | 1995
|Wyndham Resort & SpaFort Lauderdale, Florida   |  |              |  | 2,134                      |  | 16,448                                    |  | 23                        |                                                      | 1,159   |       |  | 2,157                          |  | 17,607    |           | 19,764    |                     | (4,964   | ) |  | 1961 |  | 1996



F-47



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                              |  |              |  |                            |  |                                           |  |                           |                                                      |         |       |  |                                |  |        |           |        |                     |        |   |  |      |  |     
|--------------------------------------------- |  | ------------ |  | -------------------------- |  | ----------------------------------------- |  | ------------------------- | ---------------------------------------------------- | ------- | ----- |  | ------------------------------ |  | ------ | --------- | ------ | ------------------- | ------ | - |  | ---- |  | ----
|Description                                   |  | Encumbrances |  | Initial Cost               |  | Costs CapitalizedSubsequent toAcquisition |  |                           | Gross Amounts atWhich Carried at Close of Period (a) |         | Total |  | AccumulatedDepreciation (b)(c) |  |        | YearBuilt |        | Date of Acquisition
|                                              |  | Land         |  | Buildings and Improvements |  | Land                                      |  | Buildings andImprovements |                                                      |         | Land  |  | Buildings and Improvements     |  |        |           |       
|Wyndham Garden Las ColinasIrving, Texas       |  | 8,771        |  | 1,884                      |  | 16,963                                    |  |                          |                                                      | (8,923  | )     |  | 1,884                          |  | 8,040  |           | 9,924  |                     | (1,988 | ) |  | 1986 |  | 1997
|Doubletree AnaheimOrange, California          |  | 12,732       |  | 2,464                      |  | 23,297                                    |  |                          |                                                      | 786     |       |  | 2,464                          |  | 24,083 |           | 26,547 |                     | (3,959 | ) |  | 1984 |  | 1997
|Doubletree Overland ParkOverland Park, Kansas |  | 20,713       |  | 3,317                      |  | 38,088                                    |  |                          |                                                      | 7,851   |       |  | 3,317                          |  | 45,939 |           | 49,256 |                     | (5,232 | ) |  | 1982 |  | 1997
|Doubletree Post OakHouston, Texas             |  | 28,124       |  | 4,441                      |  | 43,672                                    |  |                          |                                                      | (31,510 | )     |  | 4,441                          |  | 12,162 |           | 16,603 |                     | (7,461 | ) |  | 1982 |  | 1997
|Doubletree St LouisChesterfield, Missouri     |  | 12,637       |  | 2,160                      |  | 18,300                                    |  |                          |                                                      | (8,985  | )     |  | 2,160                          |  | 9,315  |           | 11,475 |                     | (3,152 | ) |  | 1984 |  | 1997
|Doubletree Allen CenterHouston, Texas         |  | 10,547       |  | 2,280                      |  | 24,707                                    |  |                          |                                                      | 13,379  |       |  | 2,280                          |  | 38,086 |           | 40,366 |                     | (4,992 | ) |  | 1978 |  | 1996
|Doubletree Guest SuitesGlenview, Illinois     |  | 8,183        |  | 3,237                      |  | 19,709                                    |  |                          |                                                      | (4,186  | )     |  | 3,237                          |  | 15,523 |           | 18,760 |                     | (3,360 | ) |  | 1988 |  | 1997
|Doubletree TulsaTulsa, Oklahoma               |  | 8,739        |  | 1,428                      |  | 18,596                                    |  |                          |                                                      | (6,531  | )     |  | 1,428                          |  | 12,065 |           | 13,493 |                     | (3,473 | ) |  | 1982 |  | 1996
|Doubletree MiamiMiami, Florida                |  | 2,727        |  | 3,808                      |  | 7,052                                     |  |                          |                                                      | (6,703  | )     |  | 3,808                          |  | 349    |           | 4,157  |                     | (1,496 | ) |  | 1975 |  | 1996
|Holiday Inn AristocratDallas, Texas           |  |             |  | 144                        |  | 7,806                                     |  | 2                         |                                                      | (1,661  | )     |  | 146                            |  | 6,145  |           | 6,291  |                     | (1,731 | ) |  | 1925 |  | 1995
|Holiday Inn DallasDallas, Texas               |  |             |  | 3,045                      |  | 15,786                                    |  | 33                        |                                                      | (7,455  | )     |  | 3,078                          |  | 8,331  |           | 11,409 |                     | (3,372 | ) |  | 1979 |  | 1995
|Radisson DallasDallas, Texas                  |  |             |  | 1,011                      |  | 8,276                                     |  | 10                        |                                                      | (3,216  | )     |  | 1,021                          |  | 5,060  |           | 6,081  |                     | (1,830 | ) |  | 1986 |  | 1995
|Radisson AkronAkron, Ohio                     |  |             |  | 1,136                      |  | 5,678                                     |  |                          |                                                      | (4,422  | )     |  | 1,136                          |  | 1,256  |           | 2,392  |                     | (681   | ) |  | 1989 |  | 1997
|Sheraton SaginawSaginaw, Michigan             |  |             |  | 773                        |  | 6,451                                     |  | 8                         |                                                      | (2,492  | )     |  | 781                            |  | 3,959  |           | 4,740  |                     | (1,404 | ) |  | 1984 |  | 1995



F-48



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION(Continued)



As of December 31, 2003

(dollars in thousands)



|                                                |  |              |           |                            |   |                                           |  |   |                                                      |  |       |        |                                |                            |   |           |   |                     |   |         |  |   |           |  |   |           |  |   |          |   |  |      |  |     
|----------------------------------------------- |  | ------------ | --------- | -------------------------- | - | ----------------------------------------- |  | - | ---------------------------------------------------- |  | ----- | ------ | ------------------------------ | -------------------------- | - | --------- | - | ------------------- | - | ------- |  | - | --------- |  | - | --------- |  | - | -------- | - |  | ---- |  | ----
|Description                                     |  | Encumbrances |           | Initial Cost               |   | Costs CapitalizedSubsequent toAcquisition |  |   | Gross Amounts atWhich Carried at Close of Period (a) |  | Total |        | AccumulatedDepreciation (b)(c) |                            |   | YearBuilt |   | Date of Acquisition
|                                                |  | Land         |           | Buildings and Improvements |   | Land                                      |  |   | Buildings andImprovements                            |  |       | Land   |                                | Buildings and Improvements |   |           |   |                    
|Ramada San FranciscoSan Francisco, California   |  |              |          |                            |   |                                          |  |   | 15,853                                               |  |       |       |                                |                            |   | (7,930    | ) |                     |   |        |  |   | 7,923     |  |   | 7,923     |  |   | (2,709   | ) |  | 1962 |  | 1997
|PickwickSan Francisco, California               |  |              |          |                            |   | 2,000                                     |  |   | 11,922                                               |  |       | 21     |                                |                            |   | 2,662     |   |                     |   | 2,021   |  |   | 14,584    |  |   | 16,605    |  |   | (3,292   | ) |  | 1928 |  | 1996
|Wyndham Hotel  Dublin Dublin, Ohio             |  |              | 4,960     |                            |   | 853                                       |  |   | 9,660                                                |  |       |       |                                |                            |   |          |   |                     |   | 853     |  |   | 9,660     |  |   | 10,513    |  |   | (6,732   | ) |  | 1980 |  | 2003
|Marriott Indian River PlantationStuart, Florida |  |              |          |                            |   | 2,309                                     |  |   | 926                                                  |  |       | (2,309 | )                              |                            |   | (926      | ) |                     |   |        |  |   |          |  |   |          |  |   | (197     | ) |  | 1987 |  | 1998
|                                                |  |              |           |                            |   |                                           |  |   |                                                      |  |       |        |                                |                            |   |           |   |                     |   |         |  |   |           |  |   |           |  |   |          |   |  |      |  |     
|                                                |  |              |           |                            |   |                                           |  |   |                                                      |  |      
|Assets Held for Sale                            |  |              | 118,133   |                            |   | 38,424                                    |  |   | 312,147                                              |  |       | (2,212 | )                              |                            |   | (68,705   | ) |                     |   | 36,212  |  |   | 243,442   |  |   | 279,654   |  |   | (62,725  | ) |  |      |  |     
|                                                |  |              |           |                            |   |                                           |  |   |                                                      |  |       |        |                                |                            |   |           |   |                     |   |         |  |   |           |  |   |           |  |   |          |   |  |      |  |     
|Total                                           |  | $            | 1,069,622 |                            | $ | 313,288                                   |  | $ | 2,899,552                                            |  | $     | 11,030 |                                |                            | $ | 211,486   |   |                     | $ | 324,318 |  | $ | 3,111,038 |  | $ | 3,435,356 |  | $ | (532,291 | ) |  |      |  |     
|                                                |  |              |           |                            |   |                                           |  |   |                                                      |  |       |        |                                |                            |   |           |   |                     |   |         |  |   |           |  |   |           |  |   |          |   |  |      |  |     



F-49



---

##### Table of Contents

##### Index to Financial Statements

WYNDHAM INTERNATIONAL, INC.



NOTES TO SCHEDULE III

(in thousands)



|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|----------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | ---------- | -------------------------- | --------- | - | -------------------------- | - | --------- | -------------------------- | --------- | - | --------- | -
|                                                                        |  |                                                                                             |            | Year EndedDecember 31,2003 |           |   | Year EndedDecember 31,2002 |   |           | Year EndedDecember 31,2001 |          
|(a)                                                                     |  | Reconciliation of Real Estate                                                               |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Balance at beginning of period                                                              |            | $                          | 3,739,606 |   |                            | $ | 4,639,384 |                            |           | $ | 4,868,216 |  
|                                                                        |  | Additions during period:                                                                    |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Acquisitions                                                                                |            |                            | 16,993    |   |                            |   |          |                            |           |   | 58,607    |  
|                                                                        |  | Improvements                                                                                |            |                            | 35,591    |   |                            |   | 31,195    |                            |           |   | 73,719    |  
|                                                                        |  | Deductions during period:                                                                   |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Sale of properties                                                                          |            |                            | (356,834  | ) |                            |   | (930,973  | )                          |           |   | (361,158  | )
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Balance at end of period                                                                    |            | $                          | 3,435,356 |   |                            | $ | 3,739,606 |                            |           | $ | 4,639,384 |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|(b)                                                                     |  | Reconciliation of Accumulated Depreciation:                                                 |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Balance at beginning of period                                                              |            | $                          | 474,737   |   |                            | $ | 444,322   |                            |           | $ | 377,945   |  
|                                                                        |  | Additions during period:                                                                    |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Depreciation for the period                                                                 |            |                            | 98,393    |   |                            |   | 107,154   |                            |           |   | 92,658    |  
|                                                                        |  | Deductions during period:                                                                   |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Sale of properties                                                                          |            |                            | (40,839   | ) |                            |   | (76,739   | )                          |           |   | (26,281   | )
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Balance at the end of period                                                                |            | $                          | 532,291   |   |                            | $ | 474,737   |                            |           | $ | 444,322   |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        | 
|(c)                                                                     |  | Depreciationis computed on buildings and improvements based upon a useful life of 35 years. |           
|                                                                        |  |                                                                                             |           
|Reconciliation to Balance Sheet:                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |  
|Investment in real estate per schedule III (Building & improvements)    |  | $                                                                                           | 3,435,356  |                            |           | $ | 3,739,606                  |   |           | $                          | 4,639,384 |  
|Furniture, fixture and equipment (A)                                    |  |                                                                                             | 719,071    |                            |           |   | 889,510                    |   |           |                            | 684,967   |  
|Renovation in progress (A)                                              |  |                                                                                             | 15,711     |                            |           |   | 29,543                     |   |           |                            | 25,093    |  
|Land held for development (A)                                           |  |                                                                                             | 28,647     |                            |           |   | 31,127                     |   |           |                            | 29,013    |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Fixed asset balance                                                                         |            |                            | 4,198,785 |   |                            |   | 4,689,786 |                            |           |   | 5,378,457 |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|Accumulated depreciation per schedule III (Building & improvements) (B) |  |                                                                                             | (532,291   | )                          |           |   | (474,737                   | ) |           |                            | (444,322  | )
|Accumulated depreciation (FF&E) (B)                                     |  |                                                                                             | (489,356   | )                          |           |   | (532,742                   | ) |           |                            | (438,095  | )
|Equity investment held for sale (A)                                     |  |                                                                                             |           |                            |           |   | 6,405                      |   |           |                            |          |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Total fixed assets                                                                          |            |                            | 3,177,138 |   |                            |   | 3,688,712 |                            |           |   | 4,496,040 |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|Less assets held for sale, net - per the balance sheet                  |  |                                                                                             | (238,330   | )                          |           |   | (77,256                    | ) |           |                            | (96,783   | )
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|                                                                        |  | Total investment in real estate, net - per the balance sheet                                |            | $                          | 2,938,808 |   |                            | $ | 3,611,456 |                            |           | $ | 4,399,257 |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  
|A - See schedule in footnote 3 on page F-18                             |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |  
|Sum of B - See schedule in footnote 3 on page F-18                      |  | $                                                                                           | (1,021,647 | )                          |           | $ | (1,007,479                 | ) |           |                            |           |  
|                                                                        |  |                                                                                             |            |                            |           |   |                            |   |           |                            |           |   |           |  



F-50