WYNDHAM HOTELS & RESORTS REPORTS STRONG FOURTH QUARTER AND FULL-YEAR 2022 RESULTS

Rhea-AI Summary

Wyndham Hotels & Resorts (NYSE: WH) reported robust financial results for Q4 and full-year 2022, exceeding its expectations. Key highlights include a 15% increase in global RevPAR year-over-year and a 20% increase for the full year in constant currency. The company expanded its development pipeline by 12%, adding 170 new construction projects for its ECHO Suites brand. Full-year net income reached $355 million, with diluted EPS of $3.91. The Board authorized a 9% increase in the quarterly dividend to $0.35 per share. Looking ahead, the company anticipates 2-4% growth in room supply and 4-6% growth in global RevPAR for 2023.

Positive

• Global RevPAR increased 15% in Q4 and 20% for full-year 2022.
• Development pipeline grew by 12%, including 170 new ECHO Suites projects.
• Full-year net income reached $355 million with diluted EPS of $3.91.
• Authorized a quarterly dividend increase of 9% to $0.35 per share.

Negative

• Fee-related and other revenues were $310 million in Q4, down from $314 million in Q4 2021.
• Hotel Management revenues decreased 75% year-over-year in Q4.

Company Exceeds Top End of Full-Year Outlook
Grows Development Pipeline by 12%
Increases Quarterly Dividend by 9% and Provides Full-Year 2023 Outlook

PARSIPPANY, N.J., Feb. 15, 2023 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months and year ended December 31, 2022.  Highlights include:

• Global RevPAR grew 15% compared to fourth quarter 2021 in constant currency, a 300 basis point improvement sequentially, representing 116% of 2019 levels; full-year global RevPAR grew 20% year-over-year in constant currency.
• U.S. RevPAR grew 5% compared to fourth quarter 2021, a 300 basis point improvement sequentially, representing 115% of 2019 levels; full-year U.S. RevPAR grew 12%.
• System-wide rooms grew 4% year-over-year, including 1% in the U.S. and 9% internationally.
• Development pipeline grew 12% year-over-year, including 170 new construction projects added for the Company's ECHO Suites Extended Stay by Wyndham brand since launch in March.
• Hotel Franchising segment revenues grew 12% compared to fourth quarter 2021 and 16% for the full-year.
• Diluted earnings per share of $0.63 and net income of $56 million for the quarter; full-year diluted earnings per share of $3.91 and net income of $355 million.
• Adjusted diluted earnings per share of $0.72 and adjusted net income of $64 million for the quarter; full-year adjusted diluted earnings per share of $3.96 and adjusted net income of $360 million.
• Adjusted EBITDA of $126 million for the quarter and $650 million for the full-year, which exceeded our full-year outlook of $636 million to $644 million.
• Net cash provided by operating activities of $399 million and free cash flow of $360 million for the full-year.
• Returned $561 million to shareholders for the full-year through $445 million of share repurchases and quarterly cash dividends of $0.32 per share.
• Board of Directors recently authorized a 9% increase in the quarterly cash dividend to $0.35 per share beginning with the dividend expected to be declared in first quarter 2023.

"We are incredibly proud of our team's ability to close out 2022 with RevPAR and adjusted EBITDA results that exceeded our outlook. Our development pipeline increased sequentially for the 10^th consecutive quarter reflecting robust developer interest in our brands for both conversion and new construction opportunities despite the broader macro-economic climate," said Geoffrey A. Ballotti, president and chief executive officer. "Given the continued occupancy recovery across the globe and infrastructure business growth in 2023, we are enthusiastic about the opportunities that lie ahead and our ability to deliver outstanding value to our shareholders, guests, franchisees and team members."

Fourth Quarter 2022 Operating Results

Fee-related and other revenues was $310 million compared to $314 million in fourth quarter 2021, which included $38 million from the Company's select-service management business and owned hotels - both of which were exited in the first half of 2022.  On a comparable basis, fee-related and other revenues increased 12% year-over-year primarily reflecting global RevPAR growth and higher license fees.

The Company generated net income of $56 million, or $0.63 per diluted share, compared to $48 million, or $0.52 per diluted share, in fourth quarter 2021. The increase in net income was primarily due to higher adjusted EBITDA in the Company's hotel franchising segment, partially offset by the impact from the exit of the Company's select-service management business and owned hotels.  Adjusted EBITDA was $126 million compared to $131 million in fourth quarter 2021, which included a $12 million contribution from the Company's select-service management business and owned hotels - both of which were exited in the first half of 2022.  On a comparable basis, adjusted EBITDA increased 6% year-over-year reflecting higher fee-related and other revenues, partially offset by an unfavorable timing impact from the marketing fund and the inflationary impact on expenses, both of which were anticipated.

Full reconciliations of GAAP results to the Company's non-GAAP adjusted measures for all reported periods appear in the tables to this press release.

System Size

		Rooms
		December 31, 2022		December 30, 2021		YOY Change (bps)
United States		493,800		490,600		70
International		348,700		319,500		910
Global		842,500		810,100		400

The Company's global system grew 4%, reflecting 1% growth in the U.S. and 9% growth internationally.  As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 4% and 10%, respectively, as well as 80 basis points of growth globally and 200 basis points internationally from the acquisition of the Vienna House brand in September 2022.  The Company also achieved its goal of a retention rate above 95% for the full-year 2022. 

RevPAR

		Fourth Quarter 2022		YOY Constant Currency % Change		Constant Currency % Change vs. 2019
United States		$           45.96		5 %		15 %
International		31.44		46		23
Global		39.86		15		16

Fourth quarter global RevPAR grew by 15% in constant currency compared to 2021 reflecting 5% growth in the U.S. and 46% internationally.  Global RevPAR was 116% of 2019 levels in constant currency, with the U.S. at 115% and international at 123%.  The increases compared to both 2021 and 2019 were driven primarily by stronger pricing power.

Fourth Quarter 2022 Business Segment Discussion

	Revenue						Adjusted EBITDA
	Fourth Quarter 2022		Fourth Quarter 2021		% Change		Fourth Quarter 2022		Fourth Quarter 2021		% Change
Hotel Franchising	$       303		$       270		12 %		$       138		$       128		8 %
Hotel Management	31		122		(75)		4		19		(79)
Corporate and Other	—		—		—		(16)		(16)		—
Total Company	$       334		$       392		(15)		$       126		$       131		(4)

Hotel Franchising revenues increased 12% year-over-year to $303 million primarily due to the global RevPAR increase and higher license fees.  Hotel Franchising adjusted EBITDA of $138 million increased 8% reflecting the growth in revenues, partially offset by the expected unfavorable timing impact from the marketing fund, excluding which Hotel Franchising adjusted EBITDA would have increased 13%.

Hotel Management revenues decreased 75% year-over-year to $31 million, including a $54 million decrease in cost-reimbursement revenues, which have no impact on adjusted EBITDA.  Absent cost-reimbursements, Hotel Management revenues decreased $37 million, or 84%, and adjusted EBITDA decreased $15 million, or 79%, reflecting the exit of the Company's select-service management business and owned hotels. 

Full-Year 2022 Operating Results

Fee-related and other revenues was $1,354 million compared to $1,245 million in full-year 2021.  The Company's select-service management business and owned hotels - both of which were exited in the first half of 2022 - contributed $50 million and $125 million during 2022 and 2021, respectively.  On a comparable basis, fee-related and other revenues increased 16% year-over-year primarily reflecting global RevPAR growth and higher license fees.

The Company generated net income of $355 million, or $3.91 per diluted share, compared to $244 million, or $2.60 per diluted share, in full-year 2021. The increase in net income was primarily due to higher adjusted EBITDA in the Company's hotel franchising segment and lower net interest expense, partially offset by the impact from the exit of the Company's select-service management business and owned hotels.  Adjusted EBITDA was $650 million compared to $590 million in full-year 2021.  The Company's select-service management business and owned hotels - both of which were exited in the first half of 2022 - contributed $18 million and $37 million during 2022 and 2021, respectively.  On a comparable basis, adjusted EBITDA increased 14% year-over-year reflecting higher fee-related and other revenues, partially offset by the inflationary impact on expenses.

During full-year 2020, the Company's marketing fund expenses exceeded revenues by $49 million in order to support its owners during COVID.  During the full-year 2022, the Company's marketing fund revenues exceeded expenses by $20 million; while in full-year 2021, the Company's marketing fund revenues exceeded expenses by $18 million.  As such, the Company has now recovered $38 million of the $49 million of support provided during 2020.

Development

The Company awarded 882 new contracts this year, a 35% increase compared to the 655 contracts awarded during 2021. 

On December 31, 2022, the Company's global development pipeline consisted of over 1,700 hotels and approximately 219,000 rooms, of which approximately 73% is in the midscale and above segments (56% in the U.S.).  The pipeline grew 12% year-over-year, including 34% growth in the U.S.  Approximately 60% of the Company's development pipeline is international and over 80% is new construction, of which approximately 36% has broken ground.  The pipeline includes 170 new contracts awarded for the Company's ECHO Suites Extended Stay by Wyndham brand since its launch in March 2022.  In line with development expectations, the first three ECHO Suites hotels broke ground in 2022 and are anticipated to open in the second half of 2023.

Cash and Liquidity

The Company generated $399 million of net cash provided by operating activities and free cash flow of $360 million in the full-year 2022.  The Company ended the quarter with a cash balance of $161 million and approximately $900 million in total liquidity. The Company's net debt leverage ratio was 2.9 times at December 31, 2022, just below the Company's 3 to 4 times stated target range.

Share Repurchases and Dividends

During the fourth quarter of 2022, the Company repurchased approximately 1.9 million shares of its common stock for $133 million.  For the full-year 2022, the Company repurchased approximately 6.2 million shares of its common stock for $445 million.  Since the Company's spin-off in June 2018, it has repurchased 15% of its outstanding common stock.

The Company paid common stock dividends of $28 million, or $0.32 per share, in the fourth quarter of 2022 for a total of $116 million, or $1.28 per share, for the full-year 2022.

For the full-year 2022, the Company returned $561 million to shareholders through share repurchases and quarterly cash dividends.

The Company's Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.35 per share, beginning with the dividend expected to be declared in first quarter 2023.

Full-Year 2023 Outlook

The Company provided the following outlook for full-year 2023:

		2023 Outlook
Year-over-year rooms growth		2 - 4%
Year-over-year global RevPAR growth (a)		4 - 6%
Fee-related and other revenues		$1.38 - $1.41 billion
Adjusted EBITDA		$650 - $660 million
Adjusted net income		$337 - $349 million
Adjusted diluted EPS		$3.84 - $3.98
Free cash flow conversion rate (b)		50 - 55%

(a)	Outlook represents global RevPAR growth of 6% to 8% compared to 2019.
(b)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

Year-over-year growth rates are not comparable due to the exit of the Company's select-service management business, the sale of its two owned hotels during 2022 and the variability in its marketing funds due to the support that the Company provided to its owners during 2020.

More detailed projections are available in Table 8 of this press release.  The Company is providing certain financial metrics only on a non-GAAP basis because, without unreasonable efforts, it is unable to predict with reasonable certainty the occurrence or amount of all of the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

Conference Call Information

Wyndham Hotels will hold a conference call with investors to discuss the Company's results and outlook on Thursday, February 16, 2023 at 8:00 a.m. ET.  Listeners can access the webcast live through the Company's website at https://investor.wyndhamhotels.com.  The conference call may also be accessed by dialing 800 245-3047 and providing the passcode "Wyndham".  Listeners are urged to call at least five minutes prior to the scheduled start time.  An archive of this webcast will be available on the website beginning at noon ET on February 16, 2023.  A telephone replay will be available for approximately ten days beginning at noon ET on February 16, 2023 at 800 839-9815.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing operating performance.  The Company uses these measures internally to assess its operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Exclusion of items in the Company's non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of this press release.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents.  Through its network of approximately 843,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry.  The Company operates a portfolio of 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®.  The Company's award-winning Wyndham Rewards loyalty program offers approximately 99 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally.  For more information, visit www.wyndhamhotels.com.  The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.  Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at www.investor.wyndhamhotels.com.  Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the federal securities laws, including statements related to the Company's current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures, share repurchases and dividends and restructuring charges. Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions, including inflation, higher interest rates and potential recessionary pressures; the worsening of the effects from the coronavirus pandemic ("COVID-19"); COVID-19's scope, duration, resurgence and impact on the Company's business operations, financial results, cash flows and liquidity, as well as the impact on the Company's franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel the Company's continued performance during the recovery from COVID-19 and any resurgence or mutations of the virus concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising businesses; the Company's relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflict between Russia and Ukraine; the Company's ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to the Company's ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company's ability to make or pay, plans for and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

   

Table 1
WYNDHAM HOTELS & RESORTS
INCOME STATEMENT
(In millions, except per share data)
(Unaudited)
	Three Months Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
Net revenues
Royalties and franchise fees	$                       118		$                       117		$                       512		$                       461
Marketing, reservation and loyalty	128		115		544		468
Management and other fees	3		35		57		117
License and other fees	26		19		100		79
Other	35		28		141		120
Fee-related and other revenues	310		314		1,354		1,245
Cost reimbursements	24		78		144		320
Net revenues	334		392		1,498		1,565
Expenses
Marketing, reservation and loyalty	140		123		524		450
Operating	22		39		106		132
General and administrative	35		32		123		113
Cost reimbursements	24		78		144		320
Depreciation and amortization	19		25		77		95
Gain on asset sale, net	—		—		(35)		—
Separation-related	1		—		1		3
Impairments, net	—		6		—		6
Total expenses	241		303		940		1,119
Operating income	93		89		558		446
Interest expense, net	21		22		80		93
Early extinguishment of debt	—		—		2		18
Income before income taxes	72		67		476		335
Provision for income taxes	16		19		121		91
Net income	$                         56		$                         48		$                       355		$                       244
Earnings per share
Basic	$                      0.64		$                      0.52		$                      3.93		$                      2.61
Diluted	0.63		0.52		3.91		2.60
Weighted average shares outstanding
Basic	87.8		93.0		90.3		93.4
Diluted	88.3		93.7		90.8		93.9

 

Table 2
WYNDHAM HOTELS & RESORTS
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT
The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized on a regular basis by our chief operating decision maker to assess performance and allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA. We believe that adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, allows a more complete understanding of our operating performance. We use this measure internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. During the first quarter of 2021, we modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how our chief operating decision maker reviews operating performance beginning in 2021. We have applied the modified definition of adjusted EBITDA to all periods presented.
		First Quarter		Second Quarter		Third   Quarter		Fourth Quarter		Full Year
Hotel Franchising
	Net revenues
	2022	$            272		$            335		$            367		$            303		$         1,277
	2021	209		283		337		270		1,099
	2020	243		182		236		202		863
	2019	269		331		379		300		1,279
	Adjusted EBITDA (a)
	2022	$            155		$            185		$            201		$            138		$            679
	2021	105		166		193		128		592
	2020	110		86		119		77		392
	2019	115		164		197		153		629
Hotel Management
	Net revenues
	2022	$              99		$              51		$              40		$              31		$            221
	2021	94		123		126		122		466
	2020	167		76		101		94		437
	2019	197		201		180		190		768
	Adjusted EBITDA
	2022	$              20		$                6		$                7		$                4		$              37
	2021	5		16		16		19		57
	2020	17		(4)		2		(1)		13
	2019	16		16		13		21		66
Corporate and Other
	Net revenues
	2022	$               —		$               —		$               —		$               —		$               —
	2021	—		—		—		—		—
	2020	—		—		—		—		—
	2019	2		1		1		2		6
	Adjusted EBITDA
	2022	$            (16)		$            (16)		$            (17)		$            (16)		$            (66)
	2021	(13)		(14)		(15)		(16)		(59)
	2020	(18)		(16)		(18)		(18)		(69)
	2019	(18)		(19)		(18)		(19)		(74)
Table 2 (continued)
WYNDHAM HOTELS & RESORTS
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT
		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Total Company
	Net revenues
	2022	$            371		$            386		$            407		$            334		$         1,498
	2021	303		406		463		392		1,565
	2020	410		258		337		296		1,300
	2019	468		533		560		492		2,053
	Net income/(loss)
	2022	$            106		$              92		$            101		$              56		$            355
	2021	24		68		103		48		244
	2020	22		(174)		27		(7)		(132)
	2019	21		26		45		64		157
	Adjusted EBITDA (a)
	2022	$            159		$            175		$            191		$            126		$            650
	2021	97		168		194		131		590
	2020	109		66		103		58		336
	2019	113		161		192		155		621

NOTE: Amounts include the results of the Company's Wyndham Grand Bonnet Creek Resort and Wyndham Grand Rio Mar Resort, which were sold in March 2022 and May 2022, respectively, and its select-service management business, which was exited in March 2022, through their sale/exit dates.  Amounts may not add across due to rounding. See Table 7 for reconciliations of Total Company non-GAAP measures and Table 9 for definitions.
(a)	Adjusted EBITDA for 2019 and 2020 has been recast to exclude the amortization of development advance notes to be consistent with the presentation adopted in 2021.

 

Table 3
WYNDHAM HOTELS & RESORTS
CONDENSED CASH FLOWS
(In millions)
(Unaudited)
	Year Ended December 31,
	2022		2021
Operating activities
Net income	$                       355		$                       244
Depreciation and amortization	77		95
Gain on asset sale, net	(35)		—
Loss on early extinguishment of debt	2		18
Impairments	—		6
Trade receivables	16		25
Accounts payable, accrued expenses and other current liabilities	14		39
Deferred revenues	22		16
Payments of development advance notes, net	(48)		(30)
Other, net	(4)		13
Net cash provided by operating activities	399		426
Investing activities
Property and equipment additions	(39)		(37)
Proceeds from asset sales, net (a)	263		—
Acquisition of hotel brand	(44)		—
Other, net	(1)		3
Net cash provided by/(used in) investing activities	179		(34)
Financing activities
Proceeds from long-term debt	400		45
Payments of long-term debt	(404)		(574)
Dividends to shareholders	(116)		(82)
Repurchases of common stock	(448)		(107)
Other, net	(16)		5
Net cash used in financing activities	(584)		(713)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(4)		(1)
Net decrease in cash, cash equivalents and restricted cash	(10)		(322)
Cash, cash equivalents and restricted cash, beginning of period	171		493
Cash, cash equivalents and restricted cash, end of period	$                       161		$                       171

 

Free Cash Flow:
We define free cash flow to be net cash provided by operating activities less property and equipment additions, which we also refer to as capital expenditures. We believe free cash flow to be a useful operating performance measure to us and investors to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions and investments, as well as our ability to return cash to shareholders through dividends and share repurchases. Free cash flow is not necessarily a representation of how we will use excess cash. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Hotels is that free cash flow does not represent the total cash movement for the period as detailed in the condensed consolidated statement of cash flows.
	Three Months Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
Net cash provided by operating activities (b)	$                       50		$                       99		$                     399		$                     426
Less: Property and equipment additions	(11)		(14)		(39)		(37)
Free cash flow	$                       39		$                       85		$                     360		$                     389

(a)	Includes proceeds of $179 million, net of transaction costs, received from the Company's sales of the Wyndham Grand Bonnet Creek Resort and the Wyndham Grand Rio Mar Resort and $84 million of proceeds from CorePoint Lodging related to the Company's exit of its select-service management business.
(b)	Fourth quarter year-over-year decline primarily relates to the timing of working capital, the absence of one-time benefits realized in 2021 associated with COVID-19 fee deferrals and higher payments of development advance notes.

 

Table 4
WYNDHAM HOTELS & RESORTS
BALANCE SHEET SUMMARY AND DEBT
(In millions)
(Unaudited)
	As of December 31, 2022		As of December 31, 2021
Assets
Cash and cash equivalents	$                               161		$                               171
Trade receivables, net	234		246
Assets held for sale	—		154
Property and equipment, net	99		106
Goodwill and intangible assets, net	3,131		3,200
Other current and non-current assets	498		392
Total assets	$                           4,123		$                           4,269
Liabilities and stockholders' equity
Total debt	$                           2,077		$                           2,084
Other current liabilities	386		376
Deferred income tax liabilities	345		366
Other non-current liabilities	353		354
Total liabilities	3,161		3,180
Total stockholders' equity	962		1,089
Total liabilities and stockholders' equity	$                           4,123		$                           4,269
Our outstanding debt was as follows:
	As of December 31, 2022		As of December 31, 2021
$750 million revolving credit facility (due April 2027)	$                                 —		$                                 —
$400 million term loan A (due April 2027)	399		—
$1.6 billion term loan B (due May 2025)	1,139		1,541
4.375% senior unsecured notes (due August 2028)	494		493
Finance leases	45		50
Total debt	2,077		2,084
Cash and cash equivalents	161		171
Net debt	$                           1,916		$                           1,913
Our outstanding debt as of December 31, 2022 matures as follows:
			Amount
Within 1 year			$                                 20
Between 1 and 2 years			26
Between 2 and 3 years			1,173
Between 3 and 4 years			37
Between 4 and 5 years			313
Thereafter			508
Total			$                           2,077

 

Table 5
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
	Year Ended December 31,
	2022		2021		Change		% Change
Beginning Room Count (January 1)
United States	490,600		487,300		3,300		1 %
International	319,500		308,600		10,900		4
Global	810,100		795,900		14,200		2
Additions
United States	26,700		25,900		800		3
International (a)	43,700		27,200		16,500		61
Global	70,400		53,100		17,300		33
Deletions
United States	(23,500)		(22,600)		(900)		(4)
International	(14,500)		(16,300)		1,800		11
Global	(38,000)		(38,900)		900		2
Ending Room Count (December 31)
United States	493,800		490,600		3,200		1
International	348,700		319,500		29,200		9
Global	842,500		810,100		32,400		4 %
	As of December 31,								FY 2022 Royalty Contribution
	2022		2021		Change		% Change
System Size
United States
Economy	235,800		243,100		(7,300)		(3 %)
Midscale and Upper Midscale	239,000		228,900		10,100		4
Upscale and Above	19,000		18,600		400		2
Total United States	493,800		490,600		3,200		1 %		85 %
International
Greater China	161,100		153,800		7,300		5 %		2
Rest of Asia Pacific	30,400		29,000		1,400		5		1
Europe, the Middle East and Africa (a)	79,200		66,100		13,100		20		5
Canada	39,500		39,200		300		1		5
Latin America	38,500		31,400		7,100		23		2
Total International	348,700		319,500		29,200		9 %		15
Global	842,500		810,100		32,400		4 %		100 %

(a)	Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.

 

Table 5 (continued)
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
	Three Months Ended December 31, 2022		Constant Currency % Change (a)		Three-Year Basis % Change (b)
Regional RevPAR Growth
United States
Economy	$                           38.36		2 %		21 %
Midscale and Upper Midscale	51.27		6		12
Upscale and Above	85.40		7		(10)
Total United States	$                           45.96		5 %		15 %
International
Greater China	$                           11.71		(15 %)		(35 %)
Rest of Asia Pacific	32.51		60		(9)
Europe, the Middle East and Africa	52.31		68		44
Canada	43.36		31		20
Latin America	59.23		130		116
Total International	$                           31.44		46 %		23 %
Global	$                           39.86		15 %		16 %
	Three Months Ended December 31,
	2022		2021		% Change
Average Royalty Rate
United States	4.6 %		4.6 %		—
International	2.0 %		2.1 %		(10) bps
Global	3.8 %		4.0 %		(20) bps
	Year Ended December 31, 2022		Constant Currency % Change (a)		Three-Year Basis % Change (b)
Regional RevPAR Growth
United States
Economy	$                           42.82		8 %		15 %
Midscale and Upper Midscale	56.33		14		6
Upscale and Above	93.46		26		(8)
Total United States	$                           50.72		12 %		9 %
International
Greater China	$                           13.30		(14 %)		(29 %)
Rest of Asia Pacific	28.74		48		(19)
Europe, the Middle East and Africa	46.02		104		21
Canada	50.11		52		9
Latin America	43.36		146		65
Total International	$                           29.05		49 %		5 %
Global	$                           41.88		20 %		7 %
	Year Ended December 31,
	2022		2021		% Change
Average Royalty Rate
United States	4.6 %		4.6 %		—
International	2.1 %		2.1 %		—
Global	3.9 %		4.1 %		(20) bps

(a)	International excludes the impact of currency exchange movements.
(b)	Compares 2022 to 2019; international excludes the impact of currency exchange movements.

 

Table 6 WYNDHAM HOTELS & RESORTS HISTORICAL REVPAR AND ROOMS
			First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Hotel Franchising
	Global RevPAR
	2022		$         33.08		$         43.74		$         48.61		$         39.18		$         41.23
	2021		$         24.02		$         35.69		$         44.67		$         34.77		$         34.85
	2020		$         25.90		$         17.05		$         28.83		$         23.19		$         23.74
	2019		$         33.76		$         42.04		$         45.23		$         34.51		$         38.91
	U.S. RevPAR
	2022		$         41.01		$         54.70		$         58.45		$         45.49		$         50.00
	2021		$         29.68		$         46.99		$         56.38		$         42.45		$         43.95
	2020		$         31.43		$         23.19		$         36.06		$         27.28		$         29.50
	2019		$         37.69		$         48.65		$         51.93		$         37.96		$         44.09
	International RevPAR
	2022		$         21.05		$         26.80		$         33.90		$         30.16		$         28.11
	2021		$         15.26		$         18.21		$         26.62		$         23.13		$         20.86
	2020		$         17.39		$           7.66		$         17.39		$         16.71		$         14.75
	2019		$         27.56		$         31.59		$         34.79		$         29.15		$         30.80
	Global Rooms (a)
	2022		793,200		799,200		816,300		827,100		827,100
	2021		748,700		752,500		758,600		769,400		769,400
	2020		769,000		754,700		748,200		746,500		746,500
	2019		745,300		751,300		758,400		770,200		770,200
	U.S. Rooms
	2022		486,600		487,600		488,100		493,500		493,500
	2021		452,500		454,200		458,000		465,100		465,100
	2020		463,900		460,200		459,600		452,600		452,600
	2019		454,900		457,600		460,100		464,600		464,600
	International Rooms (a)
	2022		306,600		311,600		328,200		333,600		333,600
	2021		296,200		298,300		300,600		304,300		304,300
	2020		305,100		294,500		288,600		293,900		293,900
	2019		290,400		293,700		298,300		305,600		305,600
Hotel Management
	Global RevPAR
	2022		$         56.55		$         65.13		$         71.54		$         68.04		$         64.07
	2021		$         38.17		$         56.08		$         64.63		$         57.57		$         53.81
	2020		$         50.00		$         20.67		$         34.34		$         32.91		$         34.67
	2019		$         63.25		$         66.67		$         66.65		$         59.19		$         64.01
	U.S. RevPAR
	2022		$         69.92		$       135.35		$       126.34		$         98.28		$         92.66
	2021		$         42.89		$         67.42		$         78.27		$         66.77		$         63.20
	2020		$         54.35		$         23.21		$         39.12		$         34.14		$         37.97
	2019		$         65.58		$         71.61		$         70.75		$         60.89		$         67.32
	International RevPAR
	2022		$         40.26		$         40.89		$         53.57		$         59.49		$         48.61
	2021		$         27.12		$         31.20		$         37.53		$         40.96		$         34.31
	2020		$         38.07		$         13.78		$         23.16		$         29.86		$         26.21
	2019		$         55.12		$         49.53		$         52.49		$         53.67		$         52.69
	Global Rooms
	2022		20,100		19,700		19,700		15,400		15,400
	2021		48,500		45,500		44,000		40,700		40,700
	2020		59,300		58,200		55,800		49,400		49,400
	2019		66,800		65,200		63,400		60,800		60,800
	U.S. Rooms
	2022		5,300		4,800		4,800		300		300
	2021		33,500		30,600		28,800		25,500		25,500
	2020		42,900		41,800		38,100		34,700		34,700
	2019		51,700		50,700		49,100		45,600		45,600
	International Rooms
	2022		14,800		14,900		14,900		15,100		15,100
	2021		15,000		14,900		15,200		15,200		15,200
	2020		16,400		16,400		17,700		14,700		14,700
	2019		15,100		14,500		14,300		15,200		15,200
Table 6 (continued)
WYNDHAM HOTELS & RESORTS
HISTORICAL REVPAR AND ROOMS
			First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Total System
	Global RevPAR
	2022		$         34.06		$         44.28		$         49.17		$         39.86		$         41.88
	2021		$         24.90		$         36.92		$         45.80		$         35.99		$         35.95
	2020		$         27.68		$         17.31		$         29.23		$         23.84		$         24.51
	2019		$         36.21		$         44.06		$         46.94		$         36.36		$         40.92
	U.S. RevPAR
	2022		$         42.11		$         55.57		$         59.15		$         45.96		$         50.72
	2021		$         30.62		$         48.37		$         57.73		$         43.84		$         45.19
	2020		$         33.45		$         23.19		$         36.31		$         27.80		$         30.20
	2019		$         40.56		$         50.98		$         53.79		$         40.09		$         46.39
	International RevPAR
	2022		$         21.95		$         27.46		$         34.79		$         31.44		$         29.05
	2021		$         15.83		$         18.84		$         27.15		$         23.99		$         21.52
	2020		$         18.45		$           7.96		$         17.72		$         17.37		$         15.35
	2019		$         28.92		$         32.47		$         35.63		$         30.29		$         31.85
	Global Rooms (a)
	2022		813,300		818,900		836,000		842,500		842,500
	2021		797,200		798,000		802,600		810,100		810,100
	2020		828,300		812,900		804,000		795,900		795,900
	2019		812,100		816,600		821,800		831,000		831,000
	U.S. Rooms
	2022		491,900		492,400		492,900		493,800		493,800
	2021		486,000		484,800		486,800		490,600		490,600
	2020		506,800		502,000		497,700		487,300		487,300
	2019		506,600		508,300		509,200		510,200		510,200
	International Rooms (a)
	2022		321,400		326,500		343,100		348,700		348,700
	2021		311,200		313,200		315,800		319,500		319,500
	2020		321,500		310,900		306,300		308,600		308,600
	2019		305,500		308,300		312,600		320,800		320,800

 

NOTE: Amounts may not foot due to rounding. Results reflect the reclassification of rooms from the Hotel Management segment to the Hotel Franchising segment related to the CorePoint Lodging asset sales, including approximately 19,000 rooms in first quarter 2022.
(a)  Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.

 

Table 7
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions)
The tables below reconcile certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors' understanding of the overall impact of such adjustments. We believe that adjusted EBITDA, adjusted net income and adjusted EPS financial measures provide useful information to investors about us and our financial condition and results of operations because these measures are used by our management team to evaluate our operating performance and make day-to-day operating decisions and adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. These measures also assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. These non-GAAP reconciliation tables should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
Reconciliation of Net Income/(Loss) to Adjusted EBITDA:
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
2022
Net income	$           106		$             92		$           101		$             56		$           355
Provision for income taxes	34		31		38		16		121
Depreciation and amortization	24		17		18		19		77
Interest expense, net	20		20		21		21		80
Early extinguishment of debt (a)	—		2		—		—		2
Stock-based compensation expense	8		9		8		8		33
Development advance notes amortization (b)	3		3		3		3		12
Gain on asset sale, net (c)	(36)		1		—		—		(35)
Separation-related (income)/expenses (d)	—		(1)		1		1		1
Foreign currency impact of highly inflationary countries (e)	—		1		1		2		4
Adjusted EBITDA	$           159		$           175		$           191		$           126		$           650
2021
Net income	$             24		$             68		$           103		$             48		$           244
Provision for income taxes	11		25		36		19		91
Depreciation and amortization	24		24		23		25		95
Interest expense, net	28		22		22		22		93
Early extinguishment of debt (a)	—		18		—		—		18
Stock-based compensation expense	5		8		7		8		28
Development advance notes amortization (b)	2		2		3		3		11
Impairments, net (f)	—		—		—		6		6
Separation-related expenses (d)	2		1		—		—		3
Foreign currency impact of highly inflationary countries (e)	1		—		—		—		1
Adjusted EBITDA	$             97		$           168		$           194		$           131		$           590
2020
Net income/(loss)	$             22		$         (174)		$             27		$              (7)		$         (132)
Provision for/(benefit from) income taxes	9		(48)		15		(2)		(26)
Depreciation and amortization	25		25		24		24		98
Interest expense, net	25		28		29		30		112
Stock-based compensation expense	4		5		5		5		19
Development advance notes amortization (b)	2		2		2		2		9
Impairments, net (f)	—		206		—		—		206
Restructuring costs (g)	13		16		—		5		34
Transaction-related expenses, net (h)	8		5		—		—		12
Separation-related expenses (d)	1		—		—		1		2
Foreign currency impact of highly inflationary countries (e)	—		—		1		—		2
Adjusted EBITDA	$           109		$             66		$           103		$             58		$           336
Table 7 (continued)
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions)
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
2019
Net income	$             21		$             26		$             45		$             64		$           157
Provision for income taxes	5		10		21		14		50
Depreciation and amortization	29		27		26		28		109
Interest expense, net	24		26		25		25		100
Stock-based compensation expense	3		4		4		4		15
Development advance notes amortization (b)	2		2		2		2		8
Impairment, net (i)	—		45		—		—		45
Contract termination costs (j)	—		9		34		(1)		42
Restructuring costs (k)	—		—		—		8		8
Transaction-related expenses, net (h)	7		11		12		10		40
Separation-related expenses (d)	21		1		—		—		22
Transaction-related item (l)	—		—		20		—		20
Foreign currency impact of highly inflationary countries (e)	1		—		3		1		5
Adjusted EBITDA	$           113		$           161		$           192		$           155		$           621

NOTE: Amounts may not add due to rounding.
(a)	Amount in 2022 relates to non-cash charges associated with the Company's extension of its revolving credit facility and the prepayment of $400 million of its term loan B. Amount in 2021 relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes.
(b)	Represents the non-cash amortization of development advance notes, which is now excluded from adjusted EBITDA to reflect how the Company's chief operating decision maker reviews operating performance.
(c)	Represents net gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort.  There was no gain or loss on sale of the Company's Wyndham Grand Rio Mar Resort as the proceeds received approximated adjusted net book value.
(d)	Represents costs associated with the Company's spin-off from Wyndham Worldwide.
(e)	Relates to the foreign currency impact from hyper-inflation, primarily in Argentina, which is reflected in operating expenses on the income statement.
(f)	2021 represents a non-cash charge to reduce the carrying values of the Company's owned hotels long-lived assets to their fair value in connection with the Company's Board approval of a plan to sell these assets in 2022. 2020 represents a non-cash charge to reduce the carrying values of certain intangible assets to their fair values principally attributable to higher discount rates primarily resulting from increased share price volatility, partially offset by $3 million of cash proceeds from a previously impaired asset.
(g)	Represents charges associated with restructuring initiatives implemented in response to the effects on travel demand as a result of COVID-19.
(h)	Primarily relates to integration costs incurred in connection with the Company's acquisition of La Quinta.
(i)	Represents a non-cash charge associated with the termination of certain hotel-management arrangements.
(j)	Represents costs associated with the termination of certain hotel-management arrangements.
(k)	Represents a charge related to enhancing the Company's organizational efficiency and rationalizing our operations.
(l)	Represents the one-time fee credit related to the Company's agreement with CorePoint Lodging, which is reflected as a reduction to hotel management revenues on the income statement.

 

Table 7 (continued)
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS:
	Three Months Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
Diluted earnings per share	$        0.63		$        0.52		$        3.91		$        2.60
Net income	$           56		$           48		$         355		$         244
Adjustments:
Gain on asset sale, net (a)	—		—		(35)		—
Acquisition-related amortization expense (b)	6		11		31		38
Foreign currency impact of highly inflationary countries	2		—		4		1
Early extinguishment of debt (c)	—		—		2		18
Separation-related expenses	1		—		1		3
Impairments, net	—		6		—		6
Total adjustments before tax	9		17		3		66
Income tax provision/(benefit) (d)	1		1		(2)		13
Total adjustments after tax	8		16		5		53
Adjusted net income	$           64		$           64		$         360		$         297
Adjustments - EPS impact	0.09		0.17		0.05		0.56
Adjusted diluted EPS	$        0.72		$        0.69		$        3.96		$        3.16
Diluted weighted average shares outstanding	88.3		93.7		90.8		93.9

(a)	Represents net gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort.  There was no gain or loss on sale of the Company's Wyndham Grand Rio Mar Resort as the proceeds received approximated adjusted net book value.
(b)	Reflected in depreciation and amortization on the income statement.
(c)	Amount in 2022 relates to non-cash charges associated with the Company's extension of its revolving credit facility and the prepayment of $400 million of its term loan B. Amount in 2021 relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes.
(d)	Reflects the estimated tax effects of the adjustments. Fourth quarter 2021 amount was reduced by $3 million primarily due to the lack of a tax benefit on the Company's non-cash impairment charge.

 

Table 8
WYNDHAM HOTELS & RESORTS
2023 OUTLOOK
As of February 15, 2023
(In millions, except per share data)
	2023 Outlook
Fee-related and other revenues	$	1,375 - 1,405
Adjusted EBITDA (a)		650 - 660
Depreciation and amortization expense (b)		48 - 50
Development advance notes amortization expense		13 - 15
Stock-based compensation expense		37 - 39
Interest expense, net		93 - 97
Adjusted income before income taxes		450 - 464
Income tax expense (c)		113 - 115
Adjusted net income	$	337 - 349
Adjusted diluted EPS	$	3.84 - 3.98
Diluted shares (d)		87.7
Marketing, reservation and loyalty funds (e)		Approx. $10
Capital expenditures		Approx. $35
Development advance notes		Approx. $60
Free cash flow conversion rate (f)		50% - 55%
Year-over-Year Growth
Global RevPAR (g)		4% - 6%
Number of rooms		2% - 4%

(a)	Year-over-year growth rates are not comparable due to the exit of the Company's select-service management business, the sale of its two owned hotels during 2022 and the variability in its marketing funds due to the recovery of the COVID support that the Company provided to its owners during 2020.
(b)	Excludes amortization of acquisition-related intangible assets of ~$27 million.
(c)	Outlook assumes an effective tax rate of approximately 25%.
(d)	Excludes the impact of any share repurchases after December 31, 2022.
(e)	Represents the recovery of $49 million COVID support that the Company provided to its owners during 2020. The Company recovered $38 million of the $49 million support during 2021 and 2022 combined.
(f)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow. Free cash flow plus capital expenditures equals net cash from operating activities.
(g)	Outlook represents global RevPAR growth of 6% - 8% compared to 2019.
In determining adjusted EBITDA, interest expense, net, adjusted income before income taxes, adjusted net income, adjusted diluted EPS and free cash flow conversion rate, we exclude certain items which are otherwise included in determining the comparable GAAP financial measures. We are providing these measures on a non-GAAP basis only because, without unreasonable efforts, we are unable to predict with reasonable certainty the occurrence or amount of all the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

 

Table 9 WYNDHAM HOTELS & RESORTS DEFINITIONS

Adjusted Net Income and Adjusted Diluted EPS: Represents net income/(loss) and diluted earnings/(loss) per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), (gain)/loss on asset sales and foreign currency impacts of highly inflationary countries. The Company calculates the income tax effect of the adjustments using an estimated effective tax rate applicable to each adjustment.

Adjusted EBITDA: Represents net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization. Adjusted EBITDA is a financial measure that is not recognized under U.S. GAAP and should not be considered as an alternative to net income/(loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company's definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company's chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation) and the impact caused by any foreign exchange related activities (i.e., hedges, balance sheet remeasurements and/or adjustments).

Free Cash Flow: See Table 3 for definition.

Net Debt Leverage Ratio: Calculated by dividing total debt less cash and cash equivalents by trailing twelve months adjusted EBITDA.

Number of Rooms: Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements or Company-owned and (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR.

Royalty Rate: Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.

 

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SOURCE Wyndham Hotels & Resorts

FAQ

What were Wyndham's fourth quarter 2022 financial results?

Wyndham reported a global RevPAR increase of 15% and net income of $56 million, or $0.63 per diluted share.

How much did Wyndham's development pipeline grow in 2022?

The development pipeline grew by 12% year-over-year, with 170 new ECHO Suites projects added.

What is Wyndham's outlook for 2023?

Wyndham anticipates 2-4% growth in rooms and 4-6% growth in global RevPAR for 2023.

What is Wyndham's dividend increase for 2023?

The Board authorized a 9% increase in the quarterly dividend to $0.35 per share.

What was Wyndham's full-year 2022 net income?

Wyndham's full-year net income reached $355 million, or $3.91 per diluted share.