WYNDHAM HOTELS & RESORTS REPORTS STRONG SECOND QUARTER RESULTS
Wyndham Hotels & Resorts (NYSE: WH) reported strong Q2 2024 results, with global RevPAR growing 2% and system-wide rooms increasing 4% year-over-year. The company raised its full-year 2024 EPS outlook and grew its development pipeline by 7% to a record 245,000 rooms. Key highlights include:
- Diluted EPS increased 30% to $1.07, adjusted diluted EPS grew 22% to $1.13
- Net income rose 23% to $86 million
- Adjusted EBITDA increased 13% to $178 million
- Returned $162 million to shareholders through share repurchases and dividends
- Awarded 33% more hotel contracts domestically
- Successfully repriced Term Loan B, reducing interest rate by 60 basis points
The company refined its 2024 outlook, projecting 3-4% room growth and approximately flat global RevPAR growth.
Wyndham Hotels & Resorts (NYSE: WH) ha riportato risultati solidi per il secondo trimestre del 2024, con un aumento del 2% del RevPAR globale e un incremento del 4% delle camere a livello di sistema rispetto all'anno precedente. L'azienda ha alzato le sue previsioni per l'EPS annuale 2024 e ha ampliato il suo portafoglio di sviluppo del 7%, raggiungendo un record di 245.000 camere. I punti salienti includono:
- L'EPS diluito è aumentato del 30% a $1.07, l'EPS diluito rettificato è cresciuto del 22% a $1.13
- L'utile netto è aumentato del 23% a $86 milioni
- L'EBITDA rettificato è cresciuto del 13% a $178 milioni
- Sono stati restituiti $162 milioni agli azionisti tramite riacquisti di azioni e dividendi
- Aggiudicati il 33% di contratti alberghieri in più a livello nazionale
- Riutilizzato con successo il Term Loan B, riducendo il tasso di interesse di 60 punti base
L'azienda ha affinato la sua previsione per il 2024, proiettando una crescita delle camere del 3-4% e una crescita del RevPAR globale pressoché stabile.
Wyndham Hotels & Resorts (NYSE: WH) reportó resultados sólidos para el segundo trimestre de 2024, con un aumento del 2% en el RevPAR global y un incremento del 4% en las habitaciones a nivel del sistema en comparación con el año anterior. La compañía ha elevado su pronóstico de EPS para todo el año 2024 y ha ampliado su cartera de desarrollo en un 7%, alcanzando un récord de 245,000 habitaciones. Los aspectos destacados incluyen:
- El EPS diluido aumentó un 30% a $1.07, el EPS diluido ajustado creció un 22% a $1.13
- El ingreso neto aumentó un 23% a $86 millones
- El EBITDA ajustado creció un 13% a $178 millones
- Se devolvieron $162 millones a los accionistas mediante recompra de acciones y dividendos
- Se otorgaron un 33% más de contratos hoteleros a nivel nacional
- Se repriced con éxito el Term Loan B, reduciendo la tasa de interés en 60 puntos básicos
La compañía refinó su pronóstico para 2024, proyectando un crecimiento de habitaciones del 3-4% y un crecimiento del RevPAR global aproximadamente estable.
윈덤 호텔 앤 리조트(Wyndham Hotels & Resorts, NYSE: WH)는 2024년 2분기 강력한 실적을 보고했으며, 전 세계 RevPAR가 2% 증가하고 시스템 전반의 객실 수가 작년 대비 4% 증가했습니다. 회사는 2024년 연간 EPS 전망을 상향 조정하였고, 개발 파이프라인을 7% 증가시켜 245,000개 객실의 기록을 세웠습니다. 주요 하이라이트는 다음과 같습니다:
- 희석 EPS는 30% 증가하여 $1.07에 도달했고, 조정된 희석 EPS는 22% 증가하여 $1.13에 도달했습니다.
- 순이익은 23% 증가하여 $8600만에 도달했습니다.
- 조정된 EBITDA는 13% 증가하여 $1억 7800만에 도달했습니다.
- 주주들에게 주식 매입과 배당금을 통해 $1억 6200만을 반환했습니다.
- 국내에서 33% 더 많은 호텔 계약을 수여했습니다.
- Term Loan B의 가격을 성공적으로 재조정하여 이자율을 60bp 낮추었습니다.
회사는 2024년 전망을 수정하여 객실 성장률이 3-4%이고 글로벌 RevPAR 성장률은 대체로 안정적일 것으로 예상하고 있습니다.
Wyndham Hotels & Resorts (NYSE: WH) a annoncé de solides résultats pour le deuxième trimestre 2024, avec une croissance de 2% du RevPAR global et une augmentation de 4% du nombre de chambres à l’échelle du système par rapport à l'année précédente. L'entreprise a relevé ses prévisions de BPA pour l'année 2024 et a augmenté son pipeline de développement de 7% pour atteindre un record de 245 000 chambres. Les points forts incluent :
- Le BPA dilué a augmenté de 30% pour atteindre 1,07 $, le BPA dilué ajusté a augmenté de 22% pour atteindre 1,13 $
- Le revenu net a augmenté de 23% pour atteindre 86 millions de dollars
- L'EBITDA ajusté a augmenté de 13% pour atteindre 178 millions de dollars
- 162 millions de dollars ont été retournés aux actionnaires par le biais de rachats d'actions et de dividendes
- 33% de contrats d'hôtels en plus ont été attribués au niveau national
- Réduction réussie du taux d'intérêt du Term Loan B de 60 points de base
L'entreprise a affiné ses prévisions pour 2024, prévoyant une croissance des chambres de 3 à 4% et une croissance du RevPAR global relativement stable.
Wyndham Hotels & Resorts (NYSE: WH) hat starke Ergebnisse für das zweite Quartal 2024 berichtet, mit einem Wachstum des globalen RevPAR um 2% und einem Anstieg der Zimmeranzahl um 4% im Jahresvergleich. Das Unternehmen hat seine EPS-Prognose für das gesamte Jahr 2024 angehoben und seine Entwicklungspipeline um 7% auf einen Rekord von 245.000 Zimmern ausgebaut. Wichtige Höhepunkte sind:
- Der verwässerte EPS stieg um 30% auf $1,07, der bereinigte verwässerte EPS wuchs um 22% auf $1,13
- Der Nettogewinn stieg um 23% auf $86 Millionen
- Das bereinigte EBITDA erhöhte sich um 13% auf $178 Millionen
- Es wurden $162 Millionen an die Aktionäre durch Aktienrückkäufe und Dividenden zurückgegeben
- Es wurden 33% mehr Hotelverträge im Inland vergeben
- Erfolgreiche Neuerpreisung des Term Loan B, wodurch der Zinssatz um 60 Basispunkte gesenkt wurde
Das Unternehmen hat seine Prognose für 2024 verfeinert und rechnet mit einem Wachstum der Zimmeranzahl von 3-4% sowie einem weitgehend stabilen globalen RevPAR.
- Global RevPAR grew 2% in constant currency
- System-wide rooms increased 4% year-over-year
- Development pipeline grew 7% to a record 245,000 rooms
- Diluted EPS increased 30% to $1.07
- Adjusted EBITDA rose 13% to $178 million
- Awarded 33% more hotel contracts domestically
- Successfully repriced Term Loan B, reducing interest rate by 60 basis points
- Returned $162 million to shareholders through share repurchases and dividends
- U.S. RevPAR growth was flat compared to 2023
- RevPAR for upscale and above brands lagged 2019 by 2%
- APAC region RevPAR declined 12% due to difficult year-over-year comparison
- Company reduced its full-year 2024 global RevPAR growth outlook from 2-3% to approximately flat
Wyndham Hotels & Resorts' Q2 2024 results demonstrate resilience in a normalizing RevPAR environment. The company reported solid growth across key metrics:
- Global RevPAR grew
2% in constant currency - System-wide rooms increased by
4% year-over-year - Development pipeline expanded by
7% to a record 245,000 rooms - Adjusted EBITDA rose
13% to$178 million - Adjusted diluted EPS grew
22% to$1.13
The company's focus on midscale and above segments is paying off, with
However, the company has revised its full-year 2024 outlook, reducing global RevPAR growth expectations from 2-3% to approximately flat. This adjustment, along with a decrease in fee-related and other revenues forecast, suggests some caution about the near-term economic environment.
The successful repricing and upsizing of the Term Loan B Facility is a positive development, reducing interest costs and improving financial flexibility. The company's continued share repurchases and dividend payments underscore confidence in its cash generation capabilities.
Overall, while facing some headwinds, Wyndham's diversified portfolio, strong development pipeline and cost management strategies position it well to navigate the current hospitality landscape.
Wyndham's Q2 results offer intriguing insights into current hospitality trends:
- The
33% year-over-year increase in U.S. development contracts signals strong interest from hotel owners and developers, despite economic uncertainties. - The growth in ancillary revenues (
6% ) highlights the importance of diversified income streams in the hotel industry. - The disparity between U.S. and international RevPAR growth (flat vs.
7% ) suggests varying recovery rates and market dynamics across regions. - The acceleration of U.S. RevPAR growth during Q2, especially in economy brands, indicates potential stabilization in the domestic market.
The company's focus on the ECHO Suites Extended Stay brand (
The revised outlook for flat global RevPAR growth in 2024 warrants attention. It may indicate broader industry challenges, potentially linked to inflationary pressures, travel patterns, or economic uncertainties. This conservative projection could be a prudent move in an unpredictable market.
Wyndham's strong performance in midscale and above segments, coupled with its economy brand presence, positions it well to capture diverse market segments. However, the continued lag in upscale and above brands compared to 2019 levels suggests ongoing recovery challenges in the luxury travel sector.
The company's robust international growth, particularly in Latin America, EMEA and Canada, underscores the importance of geographic diversification in the current global travel landscape.
Company Raises Full-Year 2024 EPS Outlook
Company Grows Development Pipeline by
- Global RevPAR grew
2% in constant currency. - System-wide rooms grew
4% year-over-year. - Opened over 18,000 rooms globally, including over 7,000 in the
U.S. , which represented a year-over-year increase of16% , and the first ECHO Suites Extended Stay by Wyndham. - Awarded 180 development contracts globally, including 96 contracts in the
U.S. , which represented an increase of33% year-over-year. - Development pipeline grew
1% sequentially and7% year-over-year to a record 245,000 rooms. - Ancillary revenues increased
6% compared to second quarter 2023. - Diluted earnings per share increased
30% , to , and adjusted diluted EPS grew$1.07 22% , to , or$1.13 12% on a comparable basis. - Net income was
for the second quarter, a$86 million 23% increase over the prior-year quarter; adjusted net income was , a$91 million 14% increase over the prior-year quarter. - Adjusted EBITDA increased
13% compared with the prior-year quarter, to , or$178 million 6% on a comparable basis. - Returned
to shareholders through$162 million of share repurchases and quarterly cash dividends of$131 million per share.$0.38 - Successfully completed the repricing of its Term Loan B Facility, reducing its interest rate by 60 basis points to SOFR plus
1.75% , and upsizing the facility by .$400 million
"The resilience and highly cash generative nature of our business model was once again on full display this quarter," said Geoff Ballotti, president and chief executive officer. "Amid a normalizing domestic RevPAR environment, we delivered strong adjusted EBITDA driven by net room and ancillary fee growth. We awarded
System Size and Development
Rooms | ||||||
June 30, 2024 | June 30, 2023 | YOY | ||||
499,400 | 495,100 | 90 | ||||
International | 385,500 | 356,400 | 820 | |||
Global | 884,900 | 851,500 | 390 |
The Company's global system grew
On June 30, 2024, the Company's global development pipeline consisted of approximately 2,000 hotels and 245,000 rooms, representing another record-high level and a
5% growth in theU.S. and9% internationally- 16th consecutive quarter of sequential pipeline growth
- Approximately
70% of the pipeline is in the midscale and above segments, which grew4% year-over-year - Approximately
14% of the pipeline represents ECHO Suites Extended Stay by Wyndham. - Approximately
58% of the pipeline is international - Approximately
79% of the pipeline is new construction, of which approximately35% has broken ground - During the second quarter of 2024, the Company awarded 180 new contracts, including 96 contracts in the
U.S. , which represented an increase of33% year-over-year.
RevPAR
Second | YOY | |||
$ 55.44 | — % | |||
International | 34.11 | 7 | ||
Global | 45.99 | 2 |
Second quarter global RevPAR increased
In the
Compared to 2019, which neutralizes the impact of COVID recovery timing, the Company grew RevPAR for its economy and midscale brands by
Internationally, RevPAR for the Company's
Compared to 2019, which neutralizes the impact of COVID recovery timing, the Company more than doubled the RevPAR for its
Second Quarter Operating Results
- Fee-related and other revenues were
compared to$366 million in second quarter 2023, reflecting global net room growth of$358 million 4% and a6% increase in ancillary revenue streams, partially offset by a decline in management fees, in part due to the exit of the Company's$3 million U.S. management business. - The Company generated net income of
compared to$86 million in second quarter 2023. The increase was primarily reflective of higher adjusted EBITDA, a benefit in connection with the reversal of a spin-off related matter and a lower effective tax rate, partially offset by higher interest expense and restructuring costs.$70 million - Adjusted EBITDA grew
13% to compared to$178 million in second quarter 2023. This increase included a$158 million favorable impact from marketing fund variability, excluding which adjusted EBITDA grew$10 million 6% primarily reflecting higher fee-related and other revenues, disciplined cost management given the recent RevPAR environment as well as a benefit from insurance recoveries. - Diluted earnings per share was
compared to$1.07 in second quarter 2023. This increase reflects higher net income and the benefit of a lower share count due to share repurchase activity.$0.82 - Adjusted diluted EPS grew
22% to compared to$1.13 in second quarter 2023. This increase included$0.93 per share related to expected marketing fund variability (after estimated taxes). On a comparable basis, adjusted diluted EPS increased$0.09 12% year-over-year reflecting comparable adjusted EBITDA growth and the benefit of share repurchase activity partially offset by higher interest expense. - During second quarter 2024, the Company's marketing fund expenses exceeded revenues by
, in line with expectations; while in second quarter 2023, the Company's marketing fund expenses exceeded revenues by$5 million , resulting in$15 million of marketing fund variability. The Company continues to expect marketing fund revenues to equal expenses during full-year 2024.$10 million
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.
Balance Sheet and Liquidity
The Company generated
The Company's net debt leverage ratio was 3.5 times at June 30, 2024, the midpoint of the Company's 3 to 4 times stated target range.
In May 2024, the Company successfully repriced and upsized its outstanding Senior Secured Term Loan B Facility ("Prior Term Loan B"). The new Senior Secured Term Loan B Facility ("New Term Loan B") has an outstanding principal balance of
Share Repurchases and Dividends
During the second quarter, the Company repurchased approximately 1.8 million shares of its common stock for
The Company paid common stock dividends of
Full-Year 2024 Outlook
The Company is refining its outlook as follows:
Updated Outlook | Prior Outlook | |||
Year-over-year rooms growth | 3 - | 3 - | ||
Year-over-year global RevPAR growth | Approx. flat | 2 - | ||
Fee-related and other revenues | ||||
Adjusted EBITDA | ||||
Adjusted net income | ||||
Adjusted diluted EPS | ||||
Adjusted free cash flow conversion rate | ~ | ~ |
NOTE: | Outlook for adjusted EBITDA, adjusted net income, adjusted diluted EPS and adjusted free cash flow conversion rate excludes all previous 2024 expenses and cash outlays associated with the Company's defense of an unsuccessful hostile takeover attempt. |
The reduction in RevPAR and fee-related and other revenues reflects a more moderated RevPAR acceleration than previously anticipated. The reduction in adjusted net income represents an increase in interest expense due to the upsizing of the Company's term loan B. This impact was more than offset in adjusted diluted EPS by second quarter share repurchase activity.
Year-over-year growth rates for adjusted EBITDA, adjusted net income and adjusted diluted EPS are not comparable due to full-year 2023 marketing fund revenues exceeding expenses by
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, July 25, 2024 at 8:30 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 July 25, 2024. A telephone replay will be available for approximately ten days beginning at noon ET on July 25, 2024 at 800 757-4764.
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 9,200 hotels across over 95 countries on six continents. Through its network of nearly 885,000 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 25 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 110 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit https://investor.wyndhamhotels.com. The Company may use its website and social media channels as 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 https://investor.wyndhamhotels.com or on the Company's social media channels, including the Company's LinkedIn account which can currently be accessed at https://www.linkedin.com/company/wyndhamhotels. Accordingly, investors should monitor this section of the Company's website and the Company's social media channels 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 Wyndham'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 are any statements other than statements of historical fact, including those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "predict," "intend," "goal," "future," "forward," "remain," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Wyndham 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; global or regional health crises or pandemics (such as the COVID-19 pandemic) including the resulting impact on Wyndham's business, operations, financial results, cash flows and liquidity, as well as the impact on its franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; Wyndham's relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between
Table 1 | |||||||
WYNDHAM HOTELS & RESORTS | |||||||
INCOME STATEMENT | |||||||
(In millions, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net revenues | |||||||
Royalties and franchise fees | $ 144 | $ 142 | $ 260 | $ 263 | |||
Marketing, reservation and loyalty | 150 | 145 | 267 | 265 | |||
Management and other fees | 2 | 5 | 5 | 8 | |||
License and other fees | 31 | 29 | 57 | 53 | |||
Other | 39 | 37 | 80 | 76 | |||
Fee-related and other revenues | 366 | 358 | 669 | 665 | |||
Cost reimbursements | 1 | 4 | 2 | 9 | |||
Net revenues | 367 | 362 | 671 | 674 | |||
Expenses | |||||||
Marketing, reservation and loyalty | 155 | 160 | 285 | 284 | |||
Operating | 17 | 23 | 36 | 43 | |||
General and administrative | 32 | 31 | 60 | 61 | |||
Cost reimbursements | 1 | 4 | 2 | 9 | |||
Depreciation and amortization | 17 | 19 | 37 | 37 | |||
Transaction-related | 5 | 4 | 46 | 4 | |||
Impairment | — | — | 12 | — | |||
Restructuring | 7 | — | 9 | — | |||
Separation-related | (12) | (2) | (11) | — | |||
Total expenses | 222 | 239 | 476 | 438 | |||
Operating income | 145 | 123 | 195 | 236 | |||
Interest expense, net | 30 | 24 | 59 | 46 | |||
Early extinguishment of debt | 3 | 3 | 3 | 3 | |||
Income before income taxes | 112 | 96 | 133 | 187 | |||
Provision for income taxes | 26 | 26 | 31 | 50 | |||
Net income | $ 86 | $ 70 | $ 102 | $ 137 | |||
Earnings per share | |||||||
Basic | $ 1.07 | $ 0.82 | $ 1.27 | $ 1.59 | |||
Diluted | 1.07 | 0.82 | 1.26 | 1.59 | |||
Weighted average shares outstanding | |||||||
Basic | 80.4 | 85.3 | 80.7 | 85.9 | |||
Diluted | 80.7 | 85.7 | 81.2 | 86.4 |
Table 2 | ||||||||||
WYNDHAM HOTELS & RESORTS | ||||||||||
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT | ||||||||||
The reportable segment presented below represents our operating segment for which separate financial information is available and is utilized on a | ||||||||||
First | Second | Third | Fourth | Full Year | ||||||
Hotel Franchising | ||||||||||
Net revenues | ||||||||||
2024 | $ 305 | $ 367 | n/a | n/a | n/a | |||||
2023 | 313 | 362 | $ 402 | $ 321 | $ 1,397 | |||||
Adjusted EBITDA | ||||||||||
2024 | $ 158 | $ 195 | n/a | n/a | n/a | |||||
2023 | 164 | 175 | $ 215 | $ 173 | $ 727 | |||||
Corporate and Other | ||||||||||
Net revenues | ||||||||||
2024 | $ — | $ — | n/a | n/a | n/a | |||||
2023 | — | — | $ — | $ — | $ — | |||||
Adjusted EBITDA | ||||||||||
2024 | $ (17) | $ (17) | n/a | n/a | n/a | |||||
2023 | (17) | (17) | $ (15) | $ (19) | $ (68) | |||||
Total Company | ||||||||||
Net revenues | ||||||||||
2024 | $ 305 | $ 367 | n/a | n/a | n/a | |||||
2023 | 313 | 362 | $ 402 | $ 321 | $ 1,397 | |||||
Net income | ||||||||||
2024 | $ 16 | $ 86 | n/a | n/a | n/a | |||||
2023 | 67 | 70 | $ 103 | $ 50 | $ 289 | |||||
Adjusted EBITDA | ||||||||||
2024 | $ 141 | $ 178 | n/a | n/a | n/a | |||||
2023 | 147 | 158 | $ 200 | $ 154 | $ 659 |
NOTE: | Amounts may not add across due to rounding. See Table 7 for reconciliations of Total Company non-GAAP measures and Table 9 for definitions. |
Table 3 | |||
WYNDHAM HOTELS & RESORTS | |||
CONDENSED CASH FLOWS | |||
(In millions) | |||
(Unaudited) | |||
Six Months Ended June 30, | |||
2024 | 2023 | ||
Operating activities | |||
Net income | $ 102 | $ 137 | |
Depreciation and amortization | 37 | 37 | |
Payments related to hostile takeover defense | (46) | — | |
Payments of development advance notes, net | (64) | (31) | |
Working capital and other, net | 48 | 33 | |
Net cash provided by operating activities | 77 | 176 | |
Investing activities | |||
Property and equipment additions | (16) | (18) | |
Loan advances, net | (15) | (1) | |
Net cash used in investing activities | (31) | (19) | |
Financing activities | |||
Proceeds from long-term debt | 1,703 | 1,138 | |
Payments of long-term debt | (1,477) | (1,149) | |
Dividends to shareholders | (63) | (61) | |
Repurchases of common stock | (186) | (164) | |
Other, net | (9) | (18) | |
Net cash used in financing activities | (32) | (254) | |
Effect of changes in exchange rates on cash, cash equivalents and restricted cash | (1) | (1) | |
Net increase/(decrease) in cash, cash equivalents and restricted cash | 13 | (98) | |
Cash, cash equivalents and restricted cash, beginning of period | 66 | 161 | |
Cash, cash equivalents and restricted cash, end of period | $ 79 | $ 63 |
Free Cash Flow: | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net cash provided by operating activities | $ 1 | $ 83 | $ 77 | $ 176 | |||
Less: Property and equipment additions | (7) | (9) | (16) | (18) | |||
Plus: Payments of development advance notes, net | 33 | 18 | 64 | 31 | |||
Free cash flow | 27 | 92 | 125 | 189 | |||
Plus: Adjusting items (a) | 42 | — | 46 | — | |||
Adjusted free cash flow | $ 69 | $ 92 | $ 171 | $ 189 |
(a) | Represents payments related to the Company's defense of an unsuccessful hostile takeover attempt. |
Table 4 | |||||
WYNDHAM HOTELS & RESORTS | |||||
BALANCE SHEET SUMMARY AND DEBT | |||||
(In millions) | |||||
(Unaudited) | |||||
As of June 30, 2024 | As of December 31, 2023 | ||||
Assets | |||||
Cash and cash equivalents | $ 70 | $ 66 | |||
Trade receivables, net | 275 | 241 | |||
Property and equipment, net | 81 | 88 | |||
Goodwill and intangible assets, net | 3,089 | 3,104 | |||
Other current and non-current assets | 636 | 534 | |||
Total assets | $ 4,151 | $ 4,033 | |||
Liabilities and stockholders' equity | |||||
Total debt | $ 2,427 | $ 2,201 | |||
Other current liabilities | 437 | 422 | |||
Deferred income tax liabilities | 326 | 325 | |||
Other non-current liabilities | 338 | 339 | |||
Total liabilities | 3,528 | 3,287 | |||
Total stockholders' equity | 623 | 746 | |||
Total liabilities and stockholders' equity | $ 4,151 | $ 4,033 | |||
Our outstanding debt was as follows: | |||||
Weighted Average | As of June 30, 2024 | As of December 31, 2023 | |||
7.2 % | $ — | $ 160 | |||
7.2 % | 374 | 384 | |||
4.3 % | 1,521 | 1,123 | |||
4.4 % | 496 | 495 | |||
Finance leases | 4.5 % | 36 | 39 | ||
Total debt | 5.0 % | 2,427 | 2,201 | ||
Cash and cash equivalents | 70 | 66 | |||
Net debt | $ 2,357 | $ 2,135 | |||
Net debt leverage ratio | 3.5x | 3.2x |
(a) | Represents weighted average interest rates for the second quarter 2024, including the effects of hedging. |
Our outstanding debt as of June 30, 2024 matures as follows: | |
Amount | |
Within 1 year | $ 44 |
Between 1 and 2 years | 52 |
Between 2 and 3 years | 344 |
Between 3 and 4 years | 23 |
Between 4 and 5 years | 519 |
Thereafter | 1,445 |
Total | $ 2,427 |
Table 5 | |||||||||
WYNDHAM HOTELS & RESORTS | |||||||||
REVENUE DRIVERS | |||||||||
Six Months Ended June 30, | |||||||||
2024 | 2023 | Change | % Change | ||||||
Beginning Room Count (January 1) | |||||||||
497,600 | 493,800 | 3,800 | 1 % | ||||||
International | 374,200 | 348,700 | 25,500 | 7 | |||||
Global | 871,800 | 842,500 | 29,300 | 3 | |||||
Additions | |||||||||
14,400 | 12,500 | 1,900 | 15 | ||||||
International | 16,800 | 15,500 | 1,300 | 8 | |||||
Global | 31,200 | 28,000 | 3,200 | 11 | |||||
Deletions | |||||||||
(12,600) | (11,200) | (1,400) | (13) | ||||||
International | (5,500) | (7,800) | 2,300 | 29 | |||||
Global | (18,100) | (19,000) | 900 | 5 | |||||
Ending Room Count (June 30) | |||||||||
499,400 | 495,100 | 4,300 | 1 | ||||||
International | 385,500 | 356,400 | 29,100 | 8 | |||||
Global | 884,900 | 851,500 | 33,400 | 4 % | |||||
As of June 30, | FY 2023 | ||||||||
2024 | 2023 | Change | % Change | ||||||
System Size | |||||||||
Economy | 227,800 | 231,600 | (3,800) | (2 %) | |||||
Midscale and Above | 271,600 | 263,500 | 8,100 | 3 | |||||
Total | 499,400 | 495,100 | 4,300 | 1 % | 80 % | ||||
International | |||||||||
Greater China | 175,900 | 164,600 | 11,300 | 7 % | 3 | ||||
Rest of | 36,400 | 32,600 | 3,800 | 12 | 2 | ||||
90,100 | 80,600 | 9,500 | 12 | 7 | |||||
39,800 | 39,500 | 300 | 1 | 5 | |||||
43,300 | 39,100 | 4,200 | 11 | 3 | |||||
Total International | 385,500 | 356,400 | 29,100 | 8 % | 20 | ||||
Global | 884,900 | 851,500 | 33,400 | 4 % | 100 % |
Table 5 (continued) | |||||
WYNDHAM HOTELS & RESORTS | |||||
REVENUE DRIVERS | |||||
Three Months | Constant Currency | ||||
Regional RevPAR Growth | |||||
Economy | $ 44.76 | (2 %) | |||
Midscale and Upper Midscale | 62.64 | 2 | |||
Upscale and Above | 108.70 | — | |||
Total | $ 55.44 | — % | |||
International | |||||
$ 14.51 | (17 %) | ||||
Rest of | 30.43 | 3 | |||
57.48 | 15 | ||||
57.29 | 3 | ||||
48.42 | 37 | ||||
Total International | $ 34.11 | 7 % | |||
Global | $ 45.99 | 2 % | |||
Three Months Ended June 30, | |||||
2024 | 2023 | % Change (b) | |||
Average Royalty Rate | |||||
4.7 % | 4.6 % | 9 bps | |||
International | 2.4 % | 2.4 % | 6 bps | ||
Global | 4.0 % | 3.9 % | 4 bps | ||
Six Months | Constant Currency % Change (a) | ||||
Regional RevPAR Growth | |||||
Economy | $ 38.84 | (5 %) | |||
Midscale and Upper Midscale | 55.04 | (1) | |||
Upscale and Above | 98.40 | 1 | |||
Total | $ 48.54 | (2 %) | |||
International | |||||
$ 14.67 | (5 %) | ||||
Rest of | 31.00 | 4 | |||
49.92 | 13 | ||||
49.34 | 2 | ||||
50.41 | 39 | ||||
Total International | $ 31.76 | 10 % | |||
Global | $ 41.14 | 1 % | |||
Six Months Ended June 30, | |||||
2024 | 2023 | % Change (b) | |||
Average Royalty Rate | |||||
4.6 % | 4.6 % | 7 bps | |||
International | 2.4 % | 2.3 % | 8 bps | ||
Global | 3.9 % | 3.9 % | 1 bp |
(a) | International and global exclude the impact of currency exchange movements. | ||||
(b) | Amounts may not recalculate due to rounding. |
Table 6 | ||||||||||||
WYNDHAM HOTELS & RESORTS | ||||||||||||
HISTORICAL REVPAR AND ROOMS | ||||||||||||
First | Second | Third | Fourth | Full | ||||||||
Total System | ||||||||||||
Global RevPAR | ||||||||||||
2024 | $ 36.28 | $ 45.99 | n/a | n/a | n/a | |||||||
2023 | $ 37.20 | 46.47 | $ 49.71 | $ 38.90 | $ 43.10 | |||||||
2024 | $ 41.68 | $ 55.44 | n/a | n/a | n/a | |||||||
2023 | $ 43.84 | 55.26 | $ 58.46 | $ 44.06 | $ 50.42 | |||||||
International RevPAR | ||||||||||||
2024 | $ 29.38 | $ 34.11 | n/a | n/a | n/a | |||||||
2023 | $ 27.99 | 34.44 | $ 38.05 | $ 32.12 | $ 33.21 | |||||||
Global Rooms | ||||||||||||
2024 | 876,300 | 884,900 | n/a | n/a | n/a | |||||||
2023 | 844,800 | 851,500 | 858,000 | 871,800 | 871,800 | |||||||
2024 | 499,100 | 499,400 | n/a | n/a | n/a | |||||||
2023 | 494,400 | 495,100 | 495,700 | 497,600 | 497,600 | |||||||
International Rooms | ||||||||||||
2024 | 377,200 | 385,500 | n/a | n/a | n/a | |||||||
2023 | 350,400 | 356,400 | 362,300 | 374,200 | 374,200 |
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 | |||||||||
Reconciliation of Net Income to Adjusted EBITDA: | |||||||||
First | Second | Third | Fourth | Full | |||||
2024 | |||||||||
Net income | $ 16 | $ 86 | |||||||
Provision for income taxes | 6 | 26 | |||||||
Depreciation and amortization | 20 | 17 | |||||||
Interest expense, net | 28 | 30 | |||||||
Early extinguishment of debt (a) | — | 3 | |||||||
Stock-based compensation | 10 | 10 | |||||||
Development advance notes amortization | 5 | 6 | |||||||
Restructuring costs (b) | 3 | 7 | |||||||
Transaction-related (c) | 41 | 5 | |||||||
Separation-related (d) | — | (12) | |||||||
Impairment (e) | 12 | — | |||||||
Adjusted EBITDA | $ 141 | $ 178 | |||||||
2023 | |||||||||
Net income | $ 67 | $ 70 | $ 103 | $ 50 | $ 289 | ||||
Provision for income taxes | 24 | 26 | 33 | 25 | 109 | ||||
Depreciation and amortization | 19 | 19 | 19 | 20 | 76 | ||||
Interest expense, net | 22 | 24 | 27 | 29 | 102 | ||||
Early extinguishment of debt (a) | — | 3 | — | — | 3 | ||||
Stock-based compensation | 9 | 9 | 10 | 11 | 39 | ||||
Development advance notes amortization | 3 | 4 | 4 | 5 | 15 | ||||
Transaction-related (c) | — | 4 | 1 | 5 | 11 | ||||
Separation-related (d) | 2 | (2) | — | — | 1 | ||||
Foreign currency impact of highly inflationary countries (f) | 1 | 1 | 3 | 9 | 14 | ||||
Adjusted EBITDA | $ 147 | $ 158 | $ 200 | $ 154 | $ 659 |
NOTE: | Amounts may not add due to rounding. | ||||
(a) | Amount in 2024 and 2023 relates to non-cash charges associated with the Company's refinancing of its term loan B. | ||||
(b) | Represents charges associated with the Company's 2024 restructuring plan consisting primarily of employee related costs. | ||||
(c) | Represents costs related to corporate transactions, including the Company's defense of an unsuccessful hostile takeover attempt and the Company's repricing and upsizing of its term loan B. | ||||
(d) | Represents costs (income) associated with the Company's spin-off from Wyndham Worldwide. | ||||
(e) | Primarily represents an impairment of development advance notes as a result of the Company's evaluation of the recoverability of their carrying value. | ||||
(f) | Relates to the foreign currency impact from hyper-inflation, primarily in |
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 | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Diluted EPS | $ 1.07 | $ 0.82 | $ 1.26 | $ 1.59 | |||
Net income | $ 86 | $ 70 | $ 102 | $ 137 | |||
Adjustments: | |||||||
Transaction-related | 5 | 4 | 46 | 4 | |||
Acquisition-related amortization expense (a) | 6 | 7 | 13 | 14 | |||
Impairment | — | — | 12 | — | |||
Restructuring costs | 7 | — | 9 | — | |||
Early extinguishment of debt | 3 | 3 | 3 | 3 | |||
Separation-related | (12) | (2) | (11) | — | |||
Foreign currency impact of highly inflationary countries | — | 1 | — | 3 | |||
Total adjustments before tax | 9 | 13 | 72 | 24 | |||
Income tax provision (b) | 4 | 3 | 19 | 6 | |||
Total adjustments after tax | 5 | 10 | 53 | 18 | |||
Adjusted net income | $ 91 | $ 80 | $ 155 | $ 155 | |||
Adjustments - EPS impact | 0.06 | 0.11 | 0.65 | 0.20 | |||
Adjusted diluted EPS | $ 1.13 | $ 0.93 | $ 1.91 | $ 1.79 | |||
Diluted weighted average shares outstanding | 80.7 | 85.7 | 81.2 | 86.4 |
(a) | Reflected in depreciation and amortization on the income statement. | ||||
(b) | Reflects the estimated tax effects of the adjustments. |
Table 8 | ||
WYNDHAM HOTELS & RESORTS | ||
2024 OUTLOOK | ||
As of July 24, 2024 | ||
(In millions, except per share data) | ||
2024 Outlook (a) | ||
Fee-related and other revenues | $ | 1,410 – 1,430 |
Adjusted EBITDA | 690 – 700 | |
Depreciation and amortization expense (b) | 45 – 47 | |
Development advance notes amortization expense | 23 – 25 | |
Stock-based compensation expense | 41 – 43 | |
Interest expense, net | 125 – 127 | |
Adjusted income before income taxes | 450 – 464 | |
Income tax expense (c) | 113 – 116 | |
Adjusted net income | $ | 338 – 348 |
Adjusted diluted EPS | $ | 4.20 – 4.32 |
Diluted shares (d) | 80.6 | |
Capital expenditures | Approx. | |
Development advance notes | Approx. | |
Adjusted free cash flow conversion rate | ~ | |
Year-over-Year Growth | ||
Global RevPAR | Approx. flat | |
Number of rooms |
NOTE: | Outlook for adjusted EBITDA, adjusted net income, adjusted diluted EPS and adjusted free cash flow conversion rate excludes all previous 2024 expenses and cash outlays associated with the Company's defense of an unsuccessful hostile takeover attempt. | ||||
(a) | Year-over-year growth rates for adjusted EBITDA, adjusted net income and adjusted diluted EPS are not comparable due to full-year 2023 marketing fund revenues exceeding expenses by | ||||
(b) | Excludes amortization of acquisition-related intangible assets of approximately | ||||
(c) | Outlook assumes an effective tax rate of approximately | ||||
(d) | Excludes the impact of any share repurchases after June 30, 2024. |
In determining adjusted EBITDA, interest expense, net, adjusted income before income taxes, adjusted net income, adjusted diluted EPS and adjusted 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 and diluted earnings per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, separation-related items, transaction-related items (acquisition-, disposition-, or debt-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 excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, separation-related items, transaction-related items (acquisition-, disposition-, or debt-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
Ancillary Revenues: Represents the summation of the license and other fees line item and other revenues line item per the income statement.
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.
Comparable Basis: Represents a comparison eliminating the year-over-year variability of the Company's marketing funds.
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: Reflects net cash provided by operating activities excluding development advances, less capital expenditures. The Company believes free cash flow to be a useful operating performance measure to it and investors. This measure helps the Company and investors evaluate its ability to generate cash beyond what is needed to fund capital expenditures, debt service and other obligations. Notwithstanding cash on hand and incremental borrowing capacity, free cash flow reflects the Company's ability to grow its business through investments and acquisitions, as well as its ability to return cash to shareholders through dividends and share repurchases or even to delever. Free cash flow is not a representation of how the Company 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.
Adjusted Free Cash Flow: Represents free cash flow excluding payments related to the Company's defense of an unsuccessful hostile takeover attempt.
Adjusted Free Cash Flow Conversion Rate: Represents the percentage of adjusted EBITDA that is converted to adjusted free cash flow and provides insights into how efficiently the Company is able to turn profits into cash available for use, such as for investments (including development advance notes), debt reduction, dividends or share repurchases.
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 the Company receives 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 the Company's franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.
View original content to download multimedia:https://www.prnewswire.com/news-releases/wyndham-hotels--resorts-reports-strong-second-quarter-results-302205630.html
SOURCE Wyndham Hotels & Resorts
FAQ
What was Wyndham Hotels & Resorts' (WH) RevPAR growth in Q2 2024?
How much did Wyndham Hotels & Resorts' (WH) system-wide rooms grow in Q2 2024?
What was Wyndham Hotels & Resorts' (WH) adjusted EBITDA for Q2 2024?
How much did Wyndham Hotels & Resorts (WH) return to shareholders in Q2 2024?