A method of operating a vehicle including an engine, a transmission, an exhaust gas heat recovery (EGHR) heat exchanger, and an oil-to-water heat exchanger providing selective heat-exchange communication between the engine and transmission. The method includes controlling a two-way valve, which is configured to be set to one of an engine position and a transmission position. The engine position allows heat-exchange communication between the EGHR heat exchanger and the engine, but does not allow heat-exchange communication between the EGHR heat exchanger and the oil-to-water heat exchanger. The transmission position allows heat-exchange communication between the EGHR heat exchanger, the oil-to-water heat exchanger, and the engine. The method also includes monitoring an ambient air temperature and comparing the monitored ambient air temperature to a predetermined cold ambient temperature. If the monitored ambient air temperature is greater than the predetermined cold ambient temperature, the two-way valve is set to the transmission position.