WYNDHAM HOTELS & RESORTS REPORTS THIRD QUARTER 2022 RESULTS

Rhea-AI Summary

Wyndham Hotels & Resorts (WH) has reported strong third-quarter results for 2022, raising its full-year outlook. Global RevPAR increased by 12% year-over-year, with U.S. RevPAR at 110% of 2019 levels. The company grew system-wide rooms by 4% and expanded its development pipeline by 10% to 212,000 rooms. Adjusted EBITDA reached $191 million, reflecting a 4% increase. Despite a decline in hotel management revenues, net income was $101 million. The board authorized an additional $400 million for share repurchases, showing confidence in future growth and shareholder returns.

Positive

• Global RevPAR increased by 12% compared to third quarter 2021.
• U.S. RevPAR reached 110% of 2019 levels.
• System-wide rooms grew by 4% year-over-year.
• Development pipeline expanded by 10% to 212,000 rooms.
• Adjusted EBITDA increased by 4% year-over-year to $191 million.
• Board increased share repurchase authorization by $400 million.

Negative

• Net income declined to $101 million from $103 million year-over-year.
• Hotel management revenues dropped by 68% year-over-year.

Company Raises Full-Year 2022 Outlook
Board Increases Share Repurchase Authorization by $400 Million
Company Grows System-Wide Rooms by 4% and Development Pipeline by 10%

PARSIPPANY, N.J., Oct. 25, 2022 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended September 30, 2022. Highlights include:

• Global RevPAR grew 12% compared to third quarter 2021 in constant currency.
• U.S. RevPAR grew 2% compared to third quarter 2021 and represents 110% of 2019 levels.
• System-wide rooms grew 4% year-over-year, including 1% of growth in the U.S. and 9% of growth internationally.
• Development pipeline grew 10% year-over-year to 212,000 rooms and U.S. development signings increased 82%, including 48 new construction projects for the Company's new extended-stay brand, bringing the total number to 120 since launch in March.
• Hotel Franchising segment revenues grew 9% year-over-year.
• Diluted earnings per share of $1.13 and adjusted diluted earnings per share of $1.21; net income of $101 million and adjusted net income of $108 million.
• Adjusted EBITDA of $191 million.
• Year-to-date net cash provided by operating activities of $349 million and free cash flow of $321 million.
• Returned $161 million to shareholders through $132 million of share repurchases and a quarterly cash dividend of $0.32 per share.

"With our brands delivering record U.S. RevPAR and our global development teams driving net unit growth towards the top end of our initial guidance, we are raising our full-year 2022 outlook. Despite the broader macro-economic climate, we are confident in the continued resiliency of our franchise model as we continue to invest in the business and generate substantial shareholder returns," said Geoffrey A. Ballotti, president and chief executive officer. "This quarter, we grew our development pipeline by 10%, surpassed our full-year development goal for our new extended-stay brand and completed the acquisition of our 23^rd brand - Vienna House. We remain committed to a disciplined capital allocation strategy that will deliver outstanding value to our shareholders, guests, franchisees and team members in any environment."

Fee-related and other revenues was $375 million compared to $377 million in third quarter 2021, which included $34 million from the Company's select-service management business and owned hotels - both of which were exited in the first half of this year. On a comparable basis, fee-related and other revenues increased 9% year-over-year reflecting global constant currency RevPAR growth of 12% and higher license fees.

The Company generated net income of $101 million, or $1.13 per diluted share, compared to $103 million, or $1.09 per diluted share, in third quarter 2021. The decline in net income was primarily due to the exit of the

Company's select-service management business and owned hotels, partially offset by higher adjusted EBITDA in the Company's hotel franchising segment. Adjusted EBITDA was $191 million compared to $194 million in third quarter 2021, which included a $10 million contribution from the Company's select-service management business and owned hotels - both of which were exited in the first half of this year. On a comparable basis, adjusted EBITDA increased 4% year-over-year reflecting higher fee-related and other revenues, partially offset by a 600 basis point unfavorable timing impact from the marketing fund.

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
						September 30, 2022						September 30, 2021						YOY Change (bps)
United States						492,900						486,800						130
International						343,100						315,800						860
Global						836,000						802,600						420

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 6% and 8%, respectively, as well as 80 basis points of growth globally and 200 basis points internationally from the acquisition of the Vienna House brand.

RevPAR

						Third Quarter 2022						YOY Constant Currency % Change						Constant Currency % Change vs. 2019
United States						$	59.15					2		%				10		%
International						34.79						46						17
Global						49.17						12						11

Third quarter global RevPAR grew by 12% in constant currency compared to 2021 as the U.S. grew 2% and international grew 46%. Global RevPAR was 111% of 2019 levels in constant currency, with the U.S. at 110% and international at 117%. The increases compared to both 2021 and 2019 were driven primarily by stronger pricing power.

Business Segment Discussion

			Revenue																		Adjusted EBITDA
			Third Quarter 2022						Third Quarter 2021						% Change						Third Quarter 2022						Third Quarter 2021						% Change
Hotel Franchising			$	367					$	337					9		%				$	201					$	193					4		%
Hotel Management			40						126						(68)						7						16						(56)
Corporate and Other			—						—						—						(17)						(15)						(13)
Total Company			$	407					$	463					(12)						$	191					$	194					(2)

Hotel Franchising revenues increased 9% year-over-year to $367 million primarily due to the global RevPAR increase and higher license fees. Hotel Franchising adjusted EBITDA of $201 million increased 4% reflecting the growth in revenues, partially offset by an unfavorable timing impact from the marketing fund, excluding which Hotel Franchising adjusted EBITDA would have increased 12%.

Hotel Management revenues decreased 68% year-over-year to $40 million, including a $54 million decrease in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues decreased $32 million, or 80%, and adjusted EBITDA decreased $9 million reflecting the exit of the Company's select-service management business and owned hotels.

During the third quarter 2022, the Company's marketing fund revenues exceeded expenses by $12 million; while in third quarter 2021, the Company's marketing fund revenues exceeded expenses by $19 million.

Development

The Company awarded 214 new contracts this quarter compared to 151 in the third quarter 2021. On September 30, 2022, the Company's global development pipeline consisted of over 1,600 hotels and over 212,000 rooms, of which approximately 76% is in the midscale and above segments (61% in the U.S.). The pipeline grew 10% year-over-year - 24% in the U.S. and 2% internationally. Approximately 60% of the Company's development pipeline is international and 80% is new construction, of which approximately 36% has broken ground. The pipeline includes 120 new contracts awarded for the Company's new extended-stay brand since its launch in March 2022.

Acquisition of Vienna House

On September 8, 2022, the Company completed the acquisition of the Vienna House brand, adding an upscale and midscale portfolio of over 40 hotels and more than 6,400 rooms to the Company's existing footprint in the EMEA region. The purchase price was $44 million.

Cash and Liquidity

The Company generated year-to-date net cash provided by operating activities of $349 million and free cash flow of $321 million. The Company ended the quarter with a cash balance of $286 million and approximately $1.0 billion in total liquidity.

Share Repurchases and Dividends

During the third quarter, the Company repurchased approximately 2.0 million shares of its common stock for $132 million. In October 2022, the Company's Board of Directors increased the Company's share repurchase authorization by $400 million.

The Company paid common stock dividends of $29 million, or $0.32 per share.

Full-Year 2022 Outlook

The Company is updating its outlook as follows:

Updated Outlook

Prior Outlook

Year-over-year rooms growth

~4%

2% - 4%

Year-over-year global RevPAR growth

14 - 16%

12% - 16%

Fee-related and other revenues

$1.33 - $1.34 billion

$1.29 - $1.32 billion

Adjusted EBITDA

$636 - $644 million

$611 - $631 million

Adjusted net income

$349 - $354 million

$323 - $334 million

Adjusted diluted EPS

$3.84 - $3.89

$3.51 - $3.63

Free cash flow conversion rate (a)

~55%

~55%

____________________
(a)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

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 Wednesday, October 26, 2022 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 800 225-9448 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 October 26, 2022. A telephone replay will be available for approximately ten days beginning at noon ET on October 26, 2022 at 800 839-4197.

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 836,000 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 23 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 over 97 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, restructuring charges and statements related to the coronavirus pandemic ("COVID-19"). 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; the continuation or worsening of the effects from COVID-19, its 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 and property owners, guests and team members, the hospitality industry and overall demand for travel; the success of the Company's mitigation efforts in response to COVID-19; the Company's performance during the recovery from COVID-19 and any resurgence or mutations of the virus; various actions governments, businesses and individuals continue to take in response to the pandemic, including stay-in-place directives (including, for instance, quarantine and isolation guidelines and mandates), safety mitigation guidance, as well as the timing, availability and adoption rates of vaccinations, booster shots and other treatments for COVID-19; 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 and management businesses; the Company's relationships with franchisees and property owners; the impact of war, terrorist activity, political instability or political strife; risks related to restructuring or strategic initiatives; 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.

Contacts Investors: Matt Capuzzi Senior Vice President, Investor Relations 973 753-6453 ir@wyndham.com

Media:  Maire Griffin Senior Vice President, Global Communications   973 753-6590  WyndhamHotelsNews@wyndham.com

 

Table 1
WYNDHAM HOTELS & RESORTS
INCOME STATEMENT
(In millions, except per share data)
(Unaudited)
			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Net revenues
Royalties and franchise fees			$	152					$	144					$	394					$	344
Marketing, reservation and loyalty			159						149						416						353
Management and other fees			3						32						54						82
License and other fees			28						20						74						60
Other			33						32						107						92
Fee-related and other revenues			375						377						1,045						931
Cost reimbursements			32						86						119						242
Net revenues			407						463						1,164						1,173
Expenses
Marketing, reservation and loyalty			147						130						384						327
Operating			20						33						85						92
General and administrative			29						30						88						81
Cost reimbursements			32						86						119						242
Depreciation and amortization			18						23						58						70
Gain on asset sale, net			—						—						(35)						—
Separation-related			1						—						—						3
Total expenses			247						302						699						815
Operating income			160						161						465						358
Interest expense, net			21						22						60						73
Early extinguishment of debt			—						—						2						18
Income before income taxes			139						139						403						267
Provision for income taxes			38						36						104						72
Net income			$	101					$	103					$	299					$	195
Earnings per share
Basic			$	1.13					$	1.10					$	3.28					$	2.09
Diluted			1.13						1.09						3.26						2.08
Weighted average shares outstanding
Basic			89.5						93.6						91.2						93.5
Diluted			89.9						94.1						91.7						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					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			2021			94						123						126						$	122					$	466
			2020			167						76						101						94						437
			2019			197						201						180						190						768
			Adjusted EBITDA
			2022			$	20					$	6					$	7					n/a						n/a
			2021			5						16						16						$	19					$	57
			2020			17						(4)						2						(1)						13
			2019			16						16						13						21						66
Corporate and Other
			Net revenues
			2022			$	—					$	—					$	—					n/a						n/a
			2021			—						—						—						$	—					$	—
			2020			—						—						—						—						—
			2019			2						1						1						2						6
			Adjusted EBITDA
			2022			$	(16)					$	(16)					$	(17)					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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)
			Nine Months Ended September 30,
			2022						2021
Operating activities
Net income			$	299					$	195
Depreciation and amortization			58						70
Gain on asset sale, net			(35)						—
Loss on early extinguishment of debt			2						18
Trade receivables			(1)						(10)
Accounts payable, accrued expenses and other current liabilities			4						18
Deferred revenues			20						14
Payments of development advance notes, net			(36)						(25)
Other, net			38						47
Net cash provided by operating activities			349						327
Investing activities
Property and equipment additions			(28)						(23)
Proceeds from asset sales, net (a)			263						—
Acquisition of hotel brand			(44)						—
Other, net			(1)						2
Net cash provided by/(used in) investing activities			190						(21)
Financing activities
Proceeds from long-term debt			400						45
Payments of long-term debt			(404)						(570)
Dividends to shareholders			(88)						(53)
Repurchases of common stock			(313)						(26)
Other, net			(15)						(2)
Net cash used in financing activities			(420)						(606)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash			(4)						—
Net increase/(decrease) in cash, cash equivalents and restricted cash			115						(300)
Cash, cash equivalents and restricted cash, beginning of period			171						493
Cash, cash equivalents and restricted cash, end of period			$	286					$	193

 

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 September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Net cash provided by operating activities (b)			$	107					$	147					$	349					$	327
Less: Property and equipment additions			(10)						(6)						(28)						(23)
Free cash flow			$	97					$	141					$	321					$	304

____________________
(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)	Third quarter year-over-year decline primarily relates to higher payments of development advance notes and the timing of working capital.

 

Table 4
WYNDHAM HOTELS & RESORTS
BALANCE SHEET SUMMARY AND DEBT
(In millions)
(Unaudited)
			As of September 30, 2022						As of December 31, 2021
Assets
Cash and cash equivalents			$	286					$	171
Trade receivables, net			253						246
Assets held for sale			—						154
Property and equipment, net			102						106
Goodwill and intangible assets, net			3,135						3,200
Other current and non-current assets			434						392
Total assets			$	4,210					$	4,269
Liabilities and stockholders' equity
Total debt			$	2,078					$	2,084
Other current liabilities			385						376
Deferred income tax liabilities			347						366
Other non-current liabilities			344						354
Total liabilities			3,154						3,180
Total stockholders' equity			1,056						1,089
Total liabilities and stockholders' equity			$	4,210					$	4,269
Our outstanding debt was as follows:
			As of September 30, 2022						As of December 31, 2021
$750 million revolving credit facility (due April 2027)			$	—					$	—
Term loan A (due April 2027)			399						—
Term loan B (due May 2025)			1,139						1,541
4.375% senior unsecured notes (due August 2028)			494						493
Finance leases			46						50
Total debt			2,078						2,084
Cash and cash equivalents			286						171
Net debt			$	1,792					$	1,913

 

Our outstanding debt as of September 30, 2022 matures as follows:
						Amount
Within 1 year						$	15
Between 1 and 2 years						26
Between 2 and 3 years						1,170
Between 3 and 4 years						37
Between 4 and 5 years						321
Thereafter						509
Total						$	2,078

 

Table 5
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
			Nine Months Ended September 30,
			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			19,600						16,000						3,600						23
International (a)			32,500						16,500						16,000						97
Global			52,100						32,500						19,600						60
Deletions
United States			(17,300)						(16,500)						(800)						(5)
International			(8,900)						(9,300)						400						4
Global			(26,200)						(25,800)						(400)						(2)
Ending Room Count (September 30)
United States			492,900						486,800						6,100						1
International			343,100						315,800						27,300						9
Global			836,000						802,600						33,400						4 %
			As of September 30,																								FY 2019 Royalty Contribution (b)
			2022						2021						Change						% Change
System Size
United States
Economy			237,400						244,600						(7,200)						(3 %)
Midscale and Upper Midscale			236,300						223,900						12,400						6
Upscale and Above			19,200						18,300						900						5
Total United States			492,900						486,800						6,100						1 %						86 %
International
Greater China			158,500						151,100						7,400						5 %						3
Rest of Asia Pacific			29,500						29,000						500						2						1
Europe, the Middle East and    Africa (a)			77,900						65,700						12,200						19						4
Canada			39,100						39,700						(600)						(2)						5
Latin America			38,100						30,300						7,800						26						1
Total International			343,100						315,800						27,300						9 %						14
Global			836,000						802,600						33,400						4 %						100 %

____________________
(a)	Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.
(b)	FY 2019 provided to illustrate pre-pandemic results.

 

Table 5 (continued)
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
						Three Months Ended September 30, 2022						Constant Currency % Change (a)						Three-Year Basis % Change (b)
Regional RevPAR Growth
United States
Economy						$	51.16					— %						14 %
Midscale and Upper Midscale						64.90						4						8
Upscale and Above						101.21						8						(7)
Total United States						$	59.15					2 %						10 %
International
Greater China						$	14.97					(5 %)						(21 %)
Rest of Asia Pacific						33.34						89						(11)
Europe, the Middle East and Africa						54.93						76						42
Canada						72.55						38						15
Latin America						42.52						143						66
Total International						$	34.79					46 %						17 %
Global						$	49.17					12 %						11 %
						Three Months Ended September 30,
						2022						2021						% Change
Average Royalty Rate
United States						4.6 %						4.6 %						—
International						2.1 %						2.2 %						(10 bps)
Global						3.9 %						4.1 %						(20 bps)
						Nine Months Ended September 30, 2022						Constant Currency % Change (a)						Three-Year Basis % Change (b)
Regional RevPAR Growth
United States
Economy						$	44.31					9 %						13 %
Midscale and Upper Midscale						58.03						17						5
Upscale and Above						96.36						34						(7)
Total United States						$	52.32					15 %						8 %
International
Greater China						$	13.84					(13 %)						(27 %)
Rest of Asia Pacific						27.46						43						(23)
Europe, the Middle East and Africa						43.58						121						13
Canada						52.41						60						6
Latin America						36.85						150						45
Total International						$	28.19					50 %						— %
Global						$	42.58					22 %						4 %
						Nine Months Ended September 30,
						2022						2021						% Change
Average Royalty Rate
United States						4.6 %						4.6 %						—
International						2.1 %						2.2 %						(10 bps)
Global						4.0 %						4.1 %						(10 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					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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					n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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						n/a						n/a
			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
Provision for income taxes			34						31						38
Depreciation and amortization			24						17						18
Interest expense, net			20						20						21
Early extinguishment of debt (a)			—						2						—
Stock-based compensation expense			8						9						8
Development advance notes amortization (b)			3						3						3
Separation-related (income)/expenses (c)			—						(1)						1
Gain on asset sale, net (d)			(36)						1						—
Foreign currency impact of highly inflationary countries (e)			—						1						1
Adjusted EBITDA			$	159					$	175					$	191
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 (c)			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 (c)			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 (c)			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 costs associated with the Company's spin-off from Wyndham Worldwide.
(d)	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.
(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 September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Diluted earnings per share			$	1.13					$	1.09					$	3.26					$	2.08
Net income			$	101					$	103					$	299					$	195
Adjustments:
Acquisition-related amortization expense (a)			7						9						25						27
Early extinguishment of debt (b)			—						—						2						18
Foreign currency impact of highly inflationary countries			1						—						2						1
Gain on asset sale, net (c)			—						—						(35)						—
Separation-related expenses			1						—						—						3
Total adjustments before tax			9						9						(6)						49
Income tax provision/(benefit) (d)			2						3						(3)						12
Total adjustments after tax			7						6						(3)						37
Adjusted net income			$	108					$	109					$	296					$	232
Adjustments - EPS impact			0.08						0.07						(0.04)						0.39
Adjusted diluted EPS			$	1.21					$	1.16					$	3.22					$	2.47
Diluted weighted average shares outstanding			89.9						94.1						91.7						93.9

___________________
(a)	Reflected in depreciation and amortization on the income statement.
(b)	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.
(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)	Reflects the estimated tax effects of the adjustments.

 

Table 8
WYNDHAM HOTELS & RESORTS
2022 OUTLOOK
As of October 25, 2022
(In millions, except per share data)
			2022 Outlook
Fee-related and other revenues			$			1,327 - 1,343
Adjusted EBITDA (a)						636 - 644
Depreciation and amortization expense (b)						44 - 46
Development advance notes amortization expense						12
Stock-based compensation expense						32 - 34
Interest expense, net						81 - 83
Adjusted income before income taxes						464 - 472
Income tax expense (c)						115 - 118
Adjusted net income (a)			$			349 - 354
Adjusted diluted EPS			$			3.84 - 3.89
Diluted shares (d)						91.0
Marketing, reservation and loyalty funds (e)						Approx. $20
Capital expenditures						Approx. $40
Development advance notes						Approx. $55
Free cash flow conversion rate (f)						Approx. 55%
Year-over-Year Growth
Global RevPAR (g)						14% - 16%
Number of rooms						~4%

____________________
(a)	Includes $18 million from 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. Net income for full-year 2021 was $244 million. Please see Table 7 for reconciliation.
(b)	Excludes amortization of acquisition-related intangible assets of ~$32 million.
(c)	Outlook assumes an effective tax rate of approximately 25%.
(d)	Excludes the impact of any share repurchases after September 30, 2022.
(e)	Represents recovery of $49 million investment made by the Company in 2020. Combined with $18 million recovered in 2021, the Company expects to have recaptured $38 million of the $49 million investment, with the remaining $11 million expected to be recaptured in future years.
(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. Net cash provided by operating activities was $426 million during 2021.
(g)	Outlook represents global RevPAR growth of 0% to 2% 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 Hotels & Resorts' Q3 2022 earnings results?

Wyndham's Q3 2022 net income was $101 million, with diluted earnings per share of $1.13.

How did Wyndham's RevPAR perform in Q3 2022?

Global RevPAR grew by 12% year-over-year, with U.S. RevPAR increasing by 2%.

What is the updated full-year outlook for Wyndham Hotels & Resorts?

Wyndham raised its full-year outlook to 14-16% global RevPAR growth and adjusted EBITDA of $636-$644 million.

How much did Wyndham repurchase in shares during Q3 2022?

Wyndham repurchased approximately 2.0 million shares for $132 million in Q3 2022.

What is Wyndham's development pipeline status as of Q3 2022?

Wyndham's development pipeline grew by 10% to 212,000 rooms, with 76% of it in midscale and above segments.