Company Raises Full-Year 2023 EPS
Outlook
Grows Development Pipeline by Another
12%
PARSIPPANY, N.J., Oct. 25,
2023 /PRNewswire/ -- Wyndham Hotels & Resorts
(NYSE: WH) today announced results for the three months ended
September 30, 2023. Highlights include:
- Global RevPAR grew 3% compared to third quarter 2022 in
constant currency.
- System-wide rooms grew 3% year-over-year.
- Development pipeline grew 4% sequentially and 12%
year-over-year to a record 237,000 rooms.
- Signed over 230 contracts, an increase of 8% year-over-year,
including 60 new construction projects for ECHO Suites Extended
Stay by Wyndham.
- Returned $134 million to
shareholders through $105 million of
share repurchases and a quarterly cash dividend of $0.35 per share.
"We recently announced our Board of Directors unanimously
rejected an unsolicited stock-and-cash proposal by Choice Hotels to
acquire our company. Our Board of Directors, together with
our financial and legal advisors, closely reviewed Choice's latest
proposal and determined, for multiple reasons, that it is not in
the best interest of our shareholders. They remain confident
that our standalone growth prospects offer superior, risk-adjusted
returns to Wyndham shareholders," said Geoff Ballotti, president and chief executive
officer. "Supporting that belief are our third quarter
results, which were highlighted by continued growth in global
RevPAR, ongoing domestic and international organic net room growth
and another 8% increase in hotel contracts awarded to franchisees
driving our development pipeline to a record 1,930 hotels.
Our economy brands gained market share domestically amidst a
backdrop of normalizing U.S. leisure demand, and international
occupancy continued to recover. Adjusted EBITDA grew in line
with our expectations, we generated strong free cash flow and we
returned significant capital to our shareholders. We remain focused
on our growth strategy, which includes continued system expansion
through our ECHO Suites by Wyndham brand and further improvements
in franchisee retention, as well as the multi-year benefit expected
from the U.S. infrastructure bill. We're enthusiastic about our
ability to deliver exceptional value to our shareholders, guests,
franchisees and team members in the months and years
ahead."
Third Quarter Financial Results
Fee-related and other revenues was $400
million compared to $375
million in third quarter 2022 reflecting global RevPAR and
net room growth, higher license and ancillary fees as well as the
pass-through revenues associated with the Company's global
franchisee conference in September, which was held for the first
time since 2019.
The Company generated net income of $103
million, or $1.21 per diluted
share, compared to $101 million, or
$1.13 per diluted share, in third
quarter 2022. The increase was reflective of higher adjusted
EBITDA in the Company's hotel franchising segment and a lower
effective tax rate, partially offset by higher interest
expense. Adjusted diluted EPS grew 8% reflecting higher net
income and a lower share count due to share repurchase
activity. Adjusted EBITDA increased 5% to $200 million primarily reflecting higher
fee-related and other revenues as well as marketing fund
variability. During third quarter 2023, the Company's
marketing fund revenues exceeded expenses by $17 million; while in third quarter 2022, the
Company's marketing fund revenues exceeded expenses by $12 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.
System Size
|
|
Rooms
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
YOY
Change (bps)
|
United
States
|
|
495,700
|
|
492,900
|
|
60
|
International
|
|
362,300
|
|
343,100
|
|
560
|
Global
|
|
858,000
|
|
836,000
|
|
260
|
The Company's global system grew 3%, reflecting 1% growth in the
U.S. and 6% growth internationally. As expected, these
increases included strong growth in both the higher RevPAR midscale
and above segments in the U.S. and the direct franchising business
in China, which grew 4% and 16%,
respectively.
RevPAR
|
|
Third
Quarter 2023
|
|
YOY
Constant
Currency
% Change
|
United
States
|
|
$
58.46
|
|
(1 %)
|
International
|
|
38.05
|
|
16
|
Global
|
|
49.71
|
|
3
|
Third quarter global RevPAR grew by 3% in constant currency
compared to 2022 reflecting a 1% decline in the U.S. and growth of
16% internationally. The Company had achieved record-breaking
RevPAR in the U.S. during the preceding year due to COVID-impacted
travel patterns. The Company's U.S. economy brands gained
market share of 100 basis points in the third quarter.
Comparing to 2019 to neutralize for COVID-impacted travel patterns,
U.S. RevPAR grew 9%, a 30 basis point acceleration from second
quarter 2023 growth. International RevPAR growth was driven
by higher occupancy levels and stronger pricing power in connection
with COVID recovery, and compared to 2019 grew 45% on a
constant-currency basis, a 120 basis point acceleration from second
quarter 2023 growth.
Development
- On September 30, 2023, the
Company's global development pipeline consisted of over 1,930
hotels and approximately 237,000 rooms, representing a 12%
year-over-year increase, including 16% growth in the U.S.
- Approximately 69% of the Company's pipeline is in the midscale
and above segments.
- Approximately 58% of the Company's development pipeline is
international.
- Approximately 80% of the Company's pipeline is new
construction, of which approximately 34% has broken ground.
- During third quarter 2023, the Company awarded 172 new
contracts for its legacy brands, an increase of 4% year-over-year.
Additionally, the Company awarded 60 additional new contracts for
its ECHO Suites Extended Stay by Wyndham brand and, as of
September 30, 2023, the total number
of contracts awarded for the brand was 265, or nearly 33,000
rooms.
Balance Sheet and Liquidity
As of September 30, 2023, the
Company had $2.2 billion of long-term
debt outstanding with a weighted average interest rate of
4.9%. The Company borrowed $110
million on its revolving credit facility during the third
quarter and had an available borrowing capacity of $631 million after considering $9 million of outstanding letters of credit as of
September 30, 2023. The Company
ended the quarter with a cash balance of $79
million and approximately $710
million in total liquidity.
The Company generated net cash provided by operating activities
of $77 million and free cash flow of
$67 million in third quarter
2023.
The Company has pay-fixed/receive-variable interest rate swaps
in place to hedge $600 million of the
Term Loan B Facility, set to expire in the second quarter of
2024. During the third quarter of 2023, the Company executed
$600 million of new forward starting
interest rate swaps on the Term Loan B Facility, which will begin
in second quarter 2024 and expire in 2028. The fixed rate of
the new swaps is 3.8%.
Share Repurchases and Dividends
During the third quarter, the Company repurchased approximately
1.4 million shares of its common stock for $105 million.
Year-to-date through September 30,
the Company repurchased approximately 3.8 million shares of its
common stock for $270 million.
The Company paid common stock dividends of $29 million, or
$0.35 per share.
Rejection of Unsolicited Offer
On October 17, 2023, the Company
announced that its Board of Directors unanimously rejected a highly
conditional, unsolicited stock-and-cash proposal by Choice Hotels
International, Inc. ("Choice") to acquire all outstanding shares of
Wyndham. Wyndham's Board of Directors, together with its financial
and legal advisors, closely reviewed Choice's latest proposal with
a nominal value of $90 per share,
comprised of 45% in stock and 55% in cash, and determined that it
is not in the best interest of Wyndham shareholders to accept the
proposal.
Full-Year 2023 Outlook
The Company is updating its outlook as follows to reflect the
impact of third quarter share repurchase activity:
|
|
Updated
Outlook
|
|
Prior
Outlook
|
Year-over-year rooms
growth
|
|
2 - 4%
|
|
2 - 4%
|
Year-over-year global
RevPAR growth (a)(b)
|
|
4 - 6%
|
|
4 - 6%
|
Fee-related and other
revenues (b)
|
|
$1.38 - $1.41
billion
|
|
$1.38 - $1.41
billion
|
Adjusted
EBITDA
|
|
$654 - $664
million
|
|
$654 - $664
million
|
Adjusted net
income
|
|
$336 - $348
million
|
|
$336 - $348
million
|
Adjusted diluted
EPS
|
|
$3.94 -
$4.08
|
|
$3.92 -
$4.06
|
Free cash flow
conversion rate (c)
|
|
50 - 55%
|
|
50 - 55%
|
_________________________
|
(a)
|
Outlook represents
global RevPAR growth of approximately 6% - 8% compared to
2019.
|
(b)
|
Lower end of the
range.
|
(c)
|
Represents the
percentage of adjusted EBITDA that is expected to produce free cash
flow.
|
Year-over-year growth rates are not comparable due to the sale
of the Company's owned hotels and the exit of its select-service
management business, both of which occurred during 2022, as well as
the variability in its marketing funds due to the support that the
Company provided to its owners during 2020.
The Company's expectations for full-year 2023 marketing funds
contribution to adjusted EBITDA is unchanged at $10 million. The Company expects fund
revenues will outpace fund expenses by approximately $11 million during the fourth quarter.
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, October 26, 2023 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, 2023. A telephone replay will be available for
approximately ten days beginning at noon
ET on October 26, 2023 at 800
839-6964.
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 858,000
rooms appealing to the everyday traveler, Wyndham commands a
leading presence in the economy and midscale segments of the
lodging industry. The Company operates a portfolio of 24
hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La
Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®,
Trademark Collection® and Wyndham®. The Company's
award-winning Wyndham Rewards loyalty program offers approximately
105 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 https://investor.wyndhamhotels.com. Accordingly,
investors should monitor this section of the Company's website in
addition to following the Company's press releases, filings
submitted with the Securities and Exchange Commission and any
public conference calls or webcasts.
Forward-Looking Statements
This press release contains "forward-looking statements"
within the meaning of the federal securities laws, including
statements related to the Company's current views and expectations
with respect to its future performance and operations, including
revenues, earnings, cash flow and other financial and operating
measures, share repurchases and dividends and restructuring
charges. The Company claims the protection of the Safe Harbor
contained in the Private Securities Litigation Reform Act of 1995
for forward-looking statements. Forward-looking statements include
those that convey management's expectations as to the future based
on plans, estimates and projections at the time the Company makes
the statements and may be identified by words such as "will,"
"expect," "believe," "plan," "anticipate," "intend," "goal,"
"future," "outlook," "guidance," "target," "objective," "estimate,"
"projection" and similar words or expressions, including the
negative version of such words and expressions. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, without
limitation, general economic conditions, including inflation,
higher interest rates and potential recessionary pressures; the
worsening of the effects from the coronavirus pandemic
("COVID-19"); COVID-19's scope, duration, resurgence and impact on
the Company's business operations, financial results, cash flows
and liquidity, as well as the impact on the Company's franchisees,
guests and team members, the hospitality industry and overall
demand for and restrictions on travel the Company's continued
performance during the recovery from COVID-19 and any resurgence or
mutations of the virus concerns with or threats of other pandemics,
contagious diseases or health epidemics, including the effects of
COVID-19; the performance of the financial and credit markets; the
economic environment for the hospitality industry; operating risks
associated with the hotel franchising businesses; the Company's
relationships with franchisees; the impact of war, terrorist
activity, political instability or political strife, including the
ongoing conflict between Russia
and Ukraine; the Company's ability
to satisfy obligations and agreements under its outstanding
indebtedness, including the payment of principal and interest and
compliance with the covenants thereunder; risks related to the
Company's ability to obtain financing and the terms of such
financing, including access to liquidity and capital; and the
Company's ability to make or pay, plans for and the timing and
amount of any future share repurchases and/or dividends, as well as
the risks described in the Company's most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission and any
subsequent reports filed with the Securities and Exchange
Commission. The Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, subsequent events or otherwise, except as required by
law.
Table
1
|
WYNDHAM HOTELS &
RESORTS
|
INCOME
STATEMENT
|
(In millions, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
revenues
|
|
|
|
|
|
|
|
Royalties and
franchise fees
|
$
152
|
|
$
152
|
|
$
415
|
|
$
394
|
Marketing, reservation
and loyalty
|
179
|
|
159
|
|
445
|
|
416
|
Management and other
fees
|
3
|
|
3
|
|
11
|
|
54
|
License and other
fees
|
30
|
|
28
|
|
83
|
|
74
|
Other
|
36
|
|
33
|
|
110
|
|
107
|
Fee-related and other
revenues
|
400
|
|
375
|
|
1,064
|
|
1,045
|
Cost
reimbursements
|
2
|
|
32
|
|
12
|
|
119
|
Net revenues
|
402
|
|
407
|
|
1,076
|
|
1,164
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Marketing, reservation
and loyalty
|
162
|
|
147
|
|
446
|
|
384
|
Operating
|
24
|
|
20
|
|
65
|
|
85
|
General and
administrative
|
31
|
|
29
|
|
93
|
|
88
|
Cost
reimbursements
|
2
|
|
32
|
|
12
|
|
119
|
Depreciation and
amortization
|
19
|
|
18
|
|
56
|
|
58
|
Transaction-related
|
1
|
|
—
|
|
5
|
|
—
|
Separation-related
|
—
|
|
1
|
|
—
|
|
—
|
Gain on asset sale,
net
|
—
|
|
—
|
|
—
|
|
(35)
|
Total
expenses
|
239
|
|
247
|
|
677
|
|
699
|
|
|
|
|
|
|
|
|
Operating
income
|
163
|
|
160
|
|
399
|
|
465
|
Interest expense,
net
|
27
|
|
21
|
|
73
|
|
60
|
Early extinguishment of
debt
|
—
|
|
—
|
|
3
|
|
2
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
136
|
|
139
|
|
323
|
|
403
|
Provision for income
taxes
|
33
|
|
38
|
|
83
|
|
104
|
Net
income
|
$
103
|
|
$
101
|
|
$
240
|
|
$
299
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
1.22
|
|
$
1.13
|
|
$
2.81
|
|
$
3.28
|
Diluted
|
1.21
|
|
1.13
|
|
2.79
|
|
3.26
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
84.0
|
|
89.5
|
|
85.2
|
|
91.2
|
Diluted
|
84.5
|
|
89.9
|
|
85.7
|
|
91.7
|
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. During the first quarter of 2023, we changed the
composition of our reportable segments to reflect the recent
changes in our Hotel Management segment, including the sale of our
owned assets, the exit of our select-service management business
and the exit from substantially all of our U.S. full-service
management business. The remaining hotel management business,
which is predominately the full-service international managed
business, has been aggregated, on a prospective basis, within our
Hotel Franchising segment. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full
Year
|
Hotel Franchising
(a)
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
313
|
|
$
362
|
|
$
402
|
|
n/a
|
|
n/a
|
|
2022
|
272
|
|
335
|
|
367
|
|
$
303
|
|
$
1,277
|
|
2021
|
209
|
|
283
|
|
337
|
|
270
|
|
1,099
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
164
|
|
$
175
|
|
$
215
|
|
n/a
|
|
n/a
|
|
2022
|
155
|
|
185
|
|
201
|
|
$
138
|
|
$
679
|
|
2021
|
105
|
|
166
|
|
193
|
|
128
|
|
592
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Management
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2023
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
$
99
|
|
$
51
|
|
$
40
|
|
$
31
|
|
$
221
|
|
2021
|
94
|
|
123
|
|
126
|
|
122
|
|
466
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
$
20
|
|
$
6
|
|
$
7
|
|
$
4
|
|
$
37
|
|
2021
|
5
|
|
16
|
|
16
|
|
19
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
—
|
|
$
—
|
|
$
—
|
|
n/a
|
|
n/a
|
|
2022
|
—
|
|
—
|
|
—
|
|
$
—
|
|
$
—
|
|
2021
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
(17)
|
|
$
(17)
|
|
$
(15)
|
|
n/a
|
|
n/a
|
|
2022
|
(16)
|
|
(16)
|
|
(17)
|
|
$
(16)
|
|
$
(66)
|
|
2021
|
(13)
|
|
(14)
|
|
(15)
|
|
(16)
|
|
(59)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
313
|
|
$
362
|
|
$
402
|
|
n/a
|
|
n/a
|
|
2022
|
371
|
|
386
|
|
407
|
|
$
334
|
|
$
1,498
|
|
2021
|
303
|
|
406
|
|
463
|
|
392
|
|
1,565
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
67
|
|
$
70
|
|
$
103
|
|
n/a
|
|
n/a
|
|
2022
|
106
|
|
92
|
|
101
|
|
$
56
|
|
$
355
|
|
2021
|
24
|
|
68
|
|
103
|
|
48
|
|
244
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
147
|
|
$
158
|
|
$
200
|
|
n/a
|
|
n/a
|
|
2022
|
159
|
|
175
|
|
191
|
|
$
126
|
|
$
650
|
|
2021
|
97
|
|
168
|
|
194
|
|
131
|
|
590
|
_____________________
|
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)
|
For 2023, the Hotel
Franchising segment includes the former Hotel Management segment,
which is primarily comprised of the Company's remaining
full-service management business.
|
Table
3
|
WYNDHAM HOTELS &
RESORTS
|
CONDENSED CASH
FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
Net income
|
$
240
|
|
$
299
|
Depreciation and
amortization
|
56
|
|
58
|
Gain on asset sale,
net
|
—
|
|
(35)
|
Trade
receivables
|
(40)
|
|
(1)
|
Accounts payable,
accrued expenses and other current liabilities
|
(15)
|
|
4
|
Deferred
revenues
|
10
|
|
20
|
Payments of
development advance notes, net
|
(47)
|
|
(36)
|
Other, net
|
49
|
|
40
|
Net cash provided by
operating activities
|
253
|
|
349
|
Investing
activities
|
|
|
|
Property and equipment
additions
|
(28)
|
|
(28)
|
Proceeds from asset
sales, net (a)
|
—
|
|
263
|
Acquisition of hotel
brand
|
—
|
|
(44)
|
Loan
advances
|
(22)
|
|
—
|
Other, net
|
—
|
|
(1)
|
Net cash (used
in)/provided by investing activities
|
(50)
|
|
190
|
Financing
activities
|
|
|
|
Proceeds from
long-term debt
|
1,308
|
|
400
|
Payments of long-term
debt
|
(1,217)
|
|
(404)
|
Debt issuance
costs
|
(10)
|
|
(4)
|
Dividends to
shareholders
|
(90)
|
|
(88)
|
Repurchases of common
stock
|
(261)
|
|
(313)
|
Other, net
|
(13)
|
|
(11)
|
Net cash used in
financing activities
|
(283)
|
|
(420)
|
Effect of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
(2)
|
|
(4)
|
Net (decrease)/increase
in cash, cash equivalents and restricted cash
|
(82)
|
|
115
|
Cash, cash equivalents
and restricted cash, beginning of period
|
161
|
|
171
|
Cash, cash equivalents
and restricted cash, end of period
|
$
79
|
|
$
286
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities (b)
|
$
|
77
|
|
$
|
107
|
|
$
|
253
|
|
$
|
349
|
Less: Property and
equipment additions
|
(10)
|
|
(10)
|
|
(28)
|
|
(28)
|
Free cash
flow
|
$
|
67
|
|
$
|
97
|
|
$
|
225
|
|
$
|
321
|
____________________
|
(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)
|
The year-over-year
comparability is impacted by higher interest expense and the timing
of working capital. The year-over-year comparability of the
nine months ended September 30th is also impacted by
incremental development advances and higher marketing spend, as
well as the absence of $13 million due to the exit of the
select-service management business and owned hotels. While
the Company has now lapped the sale of its owned hotels and the
exit of its select-service management business, the marketing fund
variability, higher interest expense and incremental development
advances will continue to impact the year-over-year comparisons
during the fourth quarter of 2023.
|
Table
4
|
WYNDHAM HOTELS &
RESORTS
|
BALANCE SHEET
SUMMARY AND DEBT
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
September 30,
2023
|
|
As of
December 31,
2022
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
79
|
|
$
161
|
Trade receivables,
net
|
|
|
272
|
|
234
|
Property and equipment,
net
|
|
|
91
|
|
99
|
Goodwill and intangible
assets, net
|
|
|
3,109
|
|
3,131
|
Other current and
non-current assets
|
|
|
549
|
|
498
|
Total assets
|
|
|
$
4,100
|
|
$
4,123
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Total debt
|
|
|
$
2,160
|
|
$
2,077
|
Other current
liabilities
|
|
|
397
|
|
386
|
Deferred income tax
liabilities
|
|
|
338
|
|
345
|
Other non-current
liabilities
|
|
|
349
|
|
353
|
Total
liabilities
|
|
|
3,244
|
|
3,161
|
Total stockholders'
equity
|
|
|
856
|
|
962
|
Total liabilities and
stockholders' equity
|
|
|
$
4,100
|
|
$
4,123
|
|
|
|
|
|
|
Our outstanding debt
was as follows:
|
|
|
|
|
|
|
Weighted Average
Interest Rate (a)
|
|
As of
September 30,
2023
|
|
As of
December 31,
2022
|
$750 million revolving
credit facility (due April 2027)
|
7.4 %
|
|
$
110
|
|
$
—
|
$400 million term loan
A (due April 2027)
|
7.1 %
|
|
389
|
|
399
|
$1.6 billion term loan
B (due May 2025)
|
|
|
—
|
|
1,139
|
$1.1 billion term loan
B (due May 2030)
|
4.2 %
|
|
1,125
|
|
—
|
4.375% senior unsecured
notes (due August 2028)
|
4.4 %
|
|
495
|
|
494
|
Finance
leases
|
4.5 %
|
|
41
|
|
45
|
Total debt
|
4.9 %
|
|
2,160
|
|
2,077
|
Cash and cash
equivalents
|
|
|
79
|
|
161
|
Net debt
|
|
|
$
2,081
|
|
$
1,916
|
____________________
|
(a)
Represents weighted average interest rates for the third quarter
2023, including the effects from hedging.
|
Our outstanding debt
as of September 30, 2023 matures as follows:
|
|
|
Amount
|
Within 1
year
|
$
37
|
Between 1 and 2
years
|
43
|
Between 2 and 3
years
|
48
|
Between 3 and 4
years
|
442
|
Between 4 and 5
years
|
514
|
Thereafter
|
1,076
|
Total
|
$
2,160
|
Table
5
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
%
Change
|
|
|
Beginning Room Count
(January 1)
|
|
|
|
|
|
|
|
|
|
United
States
|
493,800
|
|
490,600
|
|
3,200
|
|
1 %
|
|
|
International
|
348,700
|
|
319,500
|
|
29,200
|
|
9
|
|
|
Global
|
842,500
|
|
810,100
|
|
32,400
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
|
|
United
States
|
18,500
|
|
19,600
|
|
(1,100)
|
|
(6)
|
|
|
International
|
24,200
|
|
32,500
|
|
(8,300)
|
|
(26)
|
|
|
Global
|
42,700
|
|
52,100
|
|
(9,400)
|
|
(18)
|
|
|
|
|
|
|
|
|
|
|
|
|
Deletions
|
|
|
|
|
|
|
|
|
|
United
States
|
(16,600)
|
|
(17,300)
|
|
700
|
|
4
|
|
|
International
|
(10,600)
|
|
(8,900)
|
|
(1,700)
|
|
(19)
|
|
|
Global
|
(27,200)
|
|
(26,200)
|
|
(1,000)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Room Count
(September 30)
|
|
|
|
|
|
|
|
|
|
United
States
|
495,700
|
|
492,900
|
|
2,800
|
|
1
|
|
|
International
|
362,300
|
|
343,100
|
|
19,200
|
|
6
|
|
|
Global
|
858,000
|
|
836,000
|
|
22,000
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
|
FY 2022
Royalty
Distribution
|
|
2023
|
|
2022
|
|
Change
|
|
%
Change
|
|
System
Size
|
|
|
|
|
|
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
Economy
|
231,100
|
|
237,400
|
|
(6,300)
|
|
(3 %)
|
|
|
Midscale and Upper
Midscale
|
245,800
|
|
236,300
|
|
9,500
|
|
4
|
|
|
Upscale and
Above
|
18,800
|
|
19,200
|
|
(400)
|
|
(2)
|
|
|
Total United
States
|
495,700
|
|
492,900
|
|
2,800
|
|
1 %
|
|
85 %
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Greater
China
|
167,900
|
|
158,500
|
|
9,400
|
|
6 %
|
|
2
|
Rest of Asia
Pacific
|
34,000
|
|
29,500
|
|
4,500
|
|
15
|
|
1
|
Europe, the Middle
East and Africa
|
81,600
|
|
77,900
|
|
3,700
|
|
5
|
|
5
|
Canada
|
39,600
|
|
39,100
|
|
500
|
|
1
|
|
5
|
Latin
America
|
39,200
|
|
38,100
|
|
1,100
|
|
3
|
|
2
|
Total
International
|
362,300
|
|
343,100
|
|
19,200
|
|
6 %
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Global
|
858,000
|
|
836,000
|
|
22,000
|
|
3 %
|
|
100 %
|
Table 5
(continued)
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
Three Months
Ended
September 30, 2023
|
|
Constant
Currency
% Change
(a)
|
|
|
Regional RevPAR
Growth
|
|
|
|
|
|
United
States
|
|
|
|
|
|
Economy
|
$
49.85
|
|
(3 %)
|
|
|
Midscale and Upper
Midscale
|
64.34
|
|
(1)
|
|
|
Upscale and
Above
|
103.36
|
|
2
|
|
|
Total United
States
|
$
58.46
|
|
(1 %)
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
Greater
China
|
$
18.13
|
|
28 %
|
|
|
Rest of Asia
Pacific
|
34.64
|
|
4
|
|
|
Europe, the Middle
East and Africa
|
59.71
|
|
17
|
|
|
Canada
|
74.84
|
|
6
|
|
|
Latin
America
|
43.26
|
|
14
|
|
|
Total
International
|
$
38.05
|
|
16 %
|
|
|
|
|
|
|
|
|
Global
|
$
49.71
|
|
3 %
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Average Royalty
Rate
|
|
|
|
|
|
United
States
|
4.6 %
|
|
4.6 %
|
|
—
|
International
|
2.5 %
|
|
2.1 %
|
|
40 bps
|
Global
|
3.9 %
|
|
3.9 %
|
|
—
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30, 2023
|
|
Constant
Currency
% Change
(b)
|
|
|
Regional RevPAR
Growth
|
|
|
|
|
|
United
States
|
|
|
|
|
|
Economy
|
$
43.74
|
|
(1 %)
|
|
|
Midscale and Upper
Midscale
|
58.56
|
|
1
|
|
|
Upscale and
Above
|
99.58
|
|
3
|
|
|
Total United
States
|
$
52.56
|
|
— %
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
Greater
China
|
$
16.82
|
|
29 %
|
|
|
Rest of Asia
Pacific
|
32.33
|
|
20
|
|
|
Europe, the Middle
East and Africa
|
51.97
|
|
29
|
|
|
Canada
|
57.61
|
|
15
|
|
|
Latin
America
|
44.76
|
|
34
|
|
|
Total
International
|
$
33.59
|
|
27 %
|
|
|
|
|
|
|
|
|
Global
|
$
44.52
|
|
7 %
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Average Royalty
Rate
|
|
|
|
|
|
United
States
|
4.6 %
|
|
4.6 %
|
|
—
|
International
|
2.4 %
|
|
2.1 %
|
|
30 bps
|
Global
|
3.9 %
|
|
4.0 %
|
|
(10 bps)
|
_________________________
|
(a)
|
International and
global exclude 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
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Global
RevPAR
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
37.20
|
|
$
46.47
|
|
$
49.71
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
33.08
|
|
$
43.74
|
|
$
48.61
|
|
$
39.18
|
|
$
41.23
|
|
2021
|
|
$
24.02
|
|
$
35.69
|
|
$
44.67
|
|
$
34.77
|
|
$
34.85
|
|
U.S.
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
43.84
|
|
$
55.26
|
|
$
58.46
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
41.01
|
|
$
54.70
|
|
$
58.45
|
|
$
45.49
|
|
$
50.00
|
|
2021
|
|
$
29.68
|
|
$
46.99
|
|
$
56.38
|
|
$
42.45
|
|
$
43.95
|
|
International
RevPAR
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
27.99
|
|
$
34.44
|
|
$
38.05
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
21.05
|
|
$
26.80
|
|
$
33.90
|
|
$
30.16
|
|
$
28.11
|
|
2021
|
|
$
15.26
|
|
$
18.21
|
|
$
26.62
|
|
$
23.13
|
|
$
20.86
|
|
Global Rooms
(b)
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
844,800
|
|
851,500
|
|
858,000
|
|
n/a
|
|
n/a
|
|
2022
|
|
793,200
|
|
799,200
|
|
816,300
|
|
827,100
|
|
827,100
|
|
2021
|
|
748,700
|
|
752,500
|
|
758,600
|
|
769,400
|
|
769,400
|
|
U.S.
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
494,400
|
|
495,100
|
|
495,700
|
|
n/a
|
|
n/a
|
|
2022
|
|
486,600
|
|
487,600
|
|
488,100
|
|
493,500
|
|
493,500
|
|
2021
|
|
452,500
|
|
454,200
|
|
458,000
|
|
465,100
|
|
465,100
|
|
International Rooms
(b)
|
|
|
|
|
|
|
|
|
|
2023
|
|
350,400
|
|
356,400
|
|
362,300
|
|
n/a
|
|
n/a
|
|
2022
|
|
306,600
|
|
311,600
|
|
328,200
|
|
333,600
|
|
333,600
|
|
2021
|
|
296,200
|
|
298,300
|
|
300,600
|
|
304,300
|
|
304,300
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Management
|
|
|
|
|
|
|
|
|
|
|
Global
RevPAR
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
56.55
|
|
$
65.13
|
|
$
71.54
|
|
$
68.04
|
|
$
64.07
|
|
2021
|
|
$
38.17
|
|
$
56.08
|
|
$
64.63
|
|
$
57.57
|
|
$
53.81
|
|
U.S.
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
69.92
|
|
$
135.35
|
|
$
126.34
|
|
$
98.28
|
|
$
92.66
|
|
2021
|
|
$
42.89
|
|
$
67.42
|
|
$
78.27
|
|
$
66.77
|
|
$
63.20
|
|
International
RevPAR
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
40.26
|
|
$
40.89
|
|
$
53.57
|
|
$
59.49
|
|
$
48.61
|
|
2021
|
|
$
27.12
|
|
$
31.20
|
|
$
37.53
|
|
$
40.96
|
|
$
34.31
|
|
Global
Rooms
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
20,100
|
|
19,700
|
|
19,700
|
|
15,400
|
|
15,400
|
|
2021
|
|
48,500
|
|
45,500
|
|
44,000
|
|
40,700
|
|
40,700
|
|
U.S.
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
5,300
|
|
4,800
|
|
4,800
|
|
300
|
|
300
|
|
2021
|
|
33,500
|
|
30,600
|
|
28,800
|
|
25,500
|
|
25,500
|
|
International
Rooms
|
|
|
|
|
|
|
|
|
|
2023
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2022
|
|
14,800
|
|
14,900
|
|
14,900
|
|
15,100
|
|
15,100
|
|
2021
|
|
15,000
|
|
14,900
|
|
15,200
|
|
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
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
37.20
|
|
$
46.47
|
|
$
49.71
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
34.06
|
|
$
44.28
|
|
$
49.17
|
|
$
39.86
|
|
$
41.88
|
|
2021
|
|
$
24.90
|
|
$
36.92
|
|
$
45.80
|
|
$
35.99
|
|
$
35.95
|
|
U.S.
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
43.84
|
|
$
55.26
|
|
$
58.46
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
42.11
|
|
$
55.57
|
|
$
59.15
|
|
$
45.96
|
|
$
50.72
|
|
2021
|
|
$
30.62
|
|
$
48.37
|
|
$
57.73
|
|
$
43.84
|
|
$
45.19
|
|
International
RevPAR
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
27.99
|
|
$
34.44
|
|
$
38.05
|
|
n/a
|
|
n/a
|
|
2022
|
|
$
21.95
|
|
$
27.46
|
|
$
34.79
|
|
$
31.44
|
|
$
29.05
|
|
2021
|
|
$
15.83
|
|
$
18.84
|
|
$
27.15
|
|
$
23.99
|
|
$
21.52
|
|
Global Rooms
(b)
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
844,800
|
|
851,500
|
|
858,000
|
|
n/a
|
|
n/a
|
|
2022
|
|
813,300
|
|
818,900
|
|
836,000
|
|
842,500
|
|
842,500
|
|
2021
|
|
797,200
|
|
798,000
|
|
802,600
|
|
810,100
|
|
810,100
|
|
U.S.
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
494,400
|
|
495,100
|
|
495,700
|
|
n/a
|
|
n/a
|
|
2022
|
|
491,900
|
|
492,400
|
|
492,900
|
|
493,800
|
|
493,800
|
|
2021
|
|
486,000
|
|
484,800
|
|
486,800
|
|
490,600
|
|
490,600
|
|
International Rooms
(b)
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
350,400
|
|
356,400
|
|
362,300
|
|
n/a
|
|
n/a
|
|
2022
|
|
321,400
|
|
326,500
|
|
343,100
|
|
348,700
|
|
348,700
|
|
2021
|
|
311,200
|
|
313,200
|
|
315,800
|
|
319,500
|
|
319,500
|
____________________
|
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)
|
For 2023, the Hotel
Franchising segment includes the former Hotel Management segment,
which is primarily comprised of the Company's remaining
full-service management business.
|
(b)
|
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 to Adjusted EBITDA:
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full
Year
|
2023
|
|
|
|
|
|
|
|
|
|
Net income
|
$
67
|
|
$
70
|
|
$
103
|
|
|
|
|
Provision for income
taxes
|
24
|
|
26
|
|
33
|
|
|
|
|
Depreciation and
amortization
|
19
|
|
19
|
|
19
|
|
|
|
|
Interest expense,
net
|
22
|
|
24
|
|
27
|
|
|
|
|
Early extinguishment of
debt (a)
|
—
|
|
3
|
|
—
|
|
|
|
|
Stock-based
compensation
|
9
|
|
9
|
|
10
|
|
|
|
|
Development advance
notes amortization
|
3
|
|
4
|
|
4
|
|
|
|
|
Transaction-related
(b)
|
—
|
|
4
|
|
1
|
|
|
|
|
Separation-related
(c)
|
2
|
|
(2)
|
|
—
|
|
|
|
|
Foreign currency impact
of highly inflationary countries (d)
|
1
|
|
1
|
|
3
|
|
|
|
|
Adjusted
EBITDA
|
$
147
|
|
$
158
|
|
$
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net income
|
$
106
|
|
$
92
|
|
$
101
|
|
$
56
|
|
$
355
|
Provision for income
taxes
|
34
|
|
31
|
|
38
|
|
16
|
|
121
|
Depreciation and
amortization
|
24
|
|
17
|
|
18
|
|
19
|
|
77
|
Interest expense,
net
|
20
|
|
20
|
|
21
|
|
21
|
|
80
|
Early extinguishment of
debt (a)
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
Stock-based
compensation
|
8
|
|
9
|
|
8
|
|
8
|
|
33
|
Development advance
notes amortization
|
3
|
|
3
|
|
3
|
|
3
|
|
12
|
(Gain)/loss on asset
sale, net (e)
|
(36)
|
|
1
|
|
—
|
|
—
|
|
(35)
|
Separation-related
(c)
|
—
|
|
(1)
|
|
1
|
|
1
|
|
1
|
Foreign currency impact
of highly inflationary countries (d)
|
—
|
|
1
|
|
1
|
|
2
|
|
4
|
Adjusted
EBITDA
|
$
159
|
|
$
175
|
|
$
191
|
|
$
126
|
|
$
650
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
Net income
|
$
24
|
|
$
68
|
|
$
103
|
|
$
48
|
|
$
244
|
Provision for income
taxes
|
11
|
|
25
|
|
36
|
|
19
|
|
91
|
Depreciation and
amortization
|
24
|
|
24
|
|
23
|
|
25
|
|
95
|
Interest expense,
net
|
28
|
|
22
|
|
22
|
|
22
|
|
93
|
Early extinguishment of
debt (a)
|
—
|
|
18
|
|
—
|
|
—
|
|
18
|
Stock-based
compensation
|
5
|
|
8
|
|
7
|
|
8
|
|
28
|
Development advance
notes amortization
|
2
|
|
2
|
|
3
|
|
3
|
|
11
|
Impairments, net
(f)
|
—
|
|
—
|
|
—
|
|
6
|
|
6
|
Separation-related
(c)
|
2
|
|
1
|
|
—
|
|
—
|
|
3
|
Foreign currency impact
of highly inflationary countries (d)
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
Adjusted
EBITDA
|
$
97
|
|
$
168
|
|
$
194
|
|
$
131
|
|
$
590
|
____________________
|
NOTE: Amounts may not add due to
rounding.
|
(a)
|
Amount in 2023 relates
to non-cash charges associated with the Company's refinancing of
its term loan 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.
|
(b)
|
Represents costs
related to corporate transactions.
|
(c)
|
Represents costs
associated with the Company's spin-off from Wyndham
Worldwide.
|
(d)
|
Relates to the foreign
currency impact from hyper-inflation, primarily in Argentina, which
is reflected in operating expenses on the income
statement.
|
(e)
|
Represents (gain)/loss
on sales of the Company's owned hotels, the Wyndham Grand Bonnet
Creek Resort and Wyndham Grand Rio Mar.
|
(f)
|
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.
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Diluted
EPS
|
$ 1.21
|
|
$ 1.13
|
|
$ 2.79
|
|
$ 3.26
|
|
|
|
|
|
|
|
|
Net
income
|
$
103
|
|
$
101
|
|
$
240
|
|
$
299
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition-related
amortization expense (a)
|
7
|
|
7
|
|
20
|
|
25
|
Transaction-related
|
1
|
|
—
|
|
5
|
|
—
|
Early extinguishment
of debt
|
—
|
|
—
|
|
3
|
|
2
|
Foreign currency
impact of highly inflationary countries
|
3
|
|
1
|
|
6
|
|
2
|
Separation-related
|
—
|
|
1
|
|
—
|
|
—
|
Gain on asset sale,
net
|
—
|
|
—
|
|
—
|
|
(35)
|
Total adjustments
before tax
|
11
|
|
9
|
|
34
|
|
(6)
|
Income tax
provision/(benefit) (b)
|
3
|
|
2
|
|
8
|
|
(3)
|
Total adjustments after
tax
|
8
|
|
7
|
|
26
|
|
(3)
|
Adjusted net
income
|
$
111
|
|
$
108
|
|
$
266
|
|
$
296
|
Adjustments - EPS
impact
|
0.10
|
|
0.08
|
|
0.31
|
|
(0.04)
|
Adjusted diluted
EPS
|
$ 1.31
|
|
$ 1.21
|
|
$ 3.10
|
|
$ 3.22
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
84.5
|
|
89.9
|
|
85.7
|
|
91.7
|
___________________________
|
(a)
|
Reflected in
depreciation and amortization on the income statement.
|
(b)
|
Reflects the estimated
tax effects of the adjustments.
|
Table
8
|
WYNDHAM HOTELS &
RESORTS
|
2023
OUTLOOK
|
As of October 25,
2023
|
(In millions, except
per share data)
|
|
|
|
|
2023
Outlook
|
Fee-related and other
revenues (a)
|
$
|
1,379 -
1,409
|
Adjusted EBITDA
(b)
|
|
654 - 664
|
Depreciation and
amortization expense (c)
|
|
48 - 50
|
Development advance
notes amortization expense
|
|
13 - 15
|
Stock-based
compensation expense
|
|
37 - 39
|
Interest expense,
net
|
|
100 - 102
|
Adjusted income before
income taxes
|
|
449 - 463
|
Income tax expense
(d)
|
|
113 - 115
|
Adjusted net
income
|
$
|
336 - 348
|
|
|
|
Adjusted diluted
EPS
|
$
|
3.94 - 4.08
|
|
|
|
Diluted shares
(e)
|
|
85.2
|
|
|
|
Marketing, reservation
and loyalty funds (f)
|
|
Approx. $10
|
|
|
|
Capital
expenditures
|
|
Approx. $35
|
Development advance
notes
|
|
Approx. $60
|
|
|
|
Free cash flow
conversion rate (g)
|
|
50% - 55%
|
|
|
|
Year-over-Year
Growth
|
|
|
Global RevPAR
(a)(h)
|
|
4% - 6%
|
Number of
rooms
|
|
2% - 4%
|
___________________
|
(a)
|
Lower end of
range.
|
(b)
|
Year-over-year growth
rates are not comparable due to the sale of the Company's owned
hotels and the exit of its select-service management business
during 2022, as well as the variability in its marketing funds due
to the recovery of the COVID support that the Company provided to
its owners during 2020.
|
(c)
|
Excludes amortization
of acquisition-related intangible assets of approximately $27
million.
|
(d)
|
Outlook assumes an
effective tax rate of approximately 25%.
|
(e)
|
Excludes the impact of
any share repurchases after September 30, 2023.
|
(f)
|
Represents the recovery
of $49 million COVID support that the Company provided to its
owners during 2020. The Company recovered $38 million of the $49
million support during 2021 and 2022
combined.
|
(g)
|
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.
|
(h)
|
Outlook represents
global RevPAR growth of approximately 6% - 8% compared to
2019.
|
In determining adjusted EBITDA, interest expense, net, adjusted
income before income taxes, adjusted net income, adjusted diluted
EPS and free cash flow conversion rate, we exclude certain items
which are otherwise included in determining the comparable GAAP
financial measures. We are providing these measures on a non-GAAP
basis only because, without unreasonable efforts, we are unable to
predict with reasonable certainty the occurrence or amount of all
the adjustments or other potential adjustments that may arise in
the future during the forward-looking period, which can be
dependent on future events that may not be reliably predicted.
Based on past reported results, where one or more of these items
have been applicable, such excluded items could be material,
individually or in the aggregate, to the reported results.
Table 9
WYNDHAM HOTELS &
RESORTS
DEFINITIONS
Adjusted Net Income and Adjusted Diluted
EPS: Represents net income/(loss) and diluted
earnings/(loss) per share excluding acquisition-related
amortization, impairment charges, restructuring and related
charges, contract termination costs, 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/(loss)
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 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.
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
contribution from the Company's owned hotels and select-service
management business - both of which were exited in the first half
of 2022, as well as the variability in its marketing funds due to
the recovery of the COVID support that the Company provided to its
owners during 2020.
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