Increases Quarterly Dividend by 9%
Reiterates Full-Year 2024 Outlook
PARSIPPANY, N.J., Feb. 14,
2024 /PRNewswire/ -- Wyndham Hotels & Resorts
(NYSE: WH) today announced results for the three months and year
ended December 31, 2023.
Highlights include:
- System-wide rooms grew organically by 3.5% year-over-year, a
record high.
- Opened a record 66,000 organic rooms, representing a
year-over-year increase of 3%.
- Global retention rate - including all terminations -
improved another 30 basis points to a record 95.6%.
- Development pipeline grew 1% sequentially and by 10%
year-over-year to a record 240,000 rooms.
- Grew ECHO Suites pipeline nearly 60% year-over-year with 98
new contract signings.
- Signed 766 contracts for legacy brands, an increase of 8%
year-over-year.
- Fourth quarter diluted earnings per share of $0.60 and net income of $50 million; adjusted diluted EPS of $0.91, adjusted net income of $75 million and adjusted EBITDA of $154 million.
- Full-year 2023 diluted EPS of $3.41 and net income of $289 million; adjusted diluted EPS of
$4.01, adjusted net income of
$341 million and adjusted EBITDA of
$659 million.
- Net cash provided by operating activities of $376 million and free cash flow of $339 million for the full-year.
- Returned $515 million to shareholders for the full-year
through $397 million of share repurchases and quarterly cash
dividends of $0.35 per
share.
- Board of Directors recently authorized a 9% increase in the
quarterly cash dividend to $0.38 per
share beginning with the dividend expected to be declared in first
quarter 2024.
"We are tremendously proud to report fourth quarter results that
demonstrate the continued success of our global strategy and our
accelerating momentum," said Geoff
Ballotti, president and chief executive officer.
"Despite the distraction, uncertainty and misperceptions caused by
Choice and their slanted and constant communications to our
franchisee base, room openings accelerated and our global
development pipeline grew by 10% to an all-time high of 240,000
rooms. Our team opened 27% more rooms than last year in the
fourth quarter and we welcomed 500 new hotels to our system in
2023. This, when combined with our improving franchisee
engagement and record retention rate, drove the best organic system
growth we've ever achieved. We grew comparable adjusted EBITDA by
6% and returned over half a billion dollars to our shareholders
through dividends and share repurchases. We are confident in
the continued effectiveness of our growth strategy and see
exceptional value-creation opportunities in the years
ahead."
System Size and Development
|
|
Rooms
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
YOY
Change (bps)
|
United
States
|
|
497,600
|
|
493,800
|
|
80
|
International
|
|
374,200
|
|
348,700
|
|
730
|
Global
|
|
871,800
|
|
842,500
|
|
350
|
The Company's global system grew 3.5%, marking 12 consecutive
quarters of organic growth and reflecting 1% growth in the U.S. and
7% 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 3% and 13%,
respectively. The Company also increased its retention rate,
which includes all terminations, by another 30 basis points
year-over-year, ending the year at a record 95.6%.
On December 31, 2023, the
Company's global development pipeline consisted of over 1,950
hotels and approximately 240,000 rooms, representing another
record-high level and a 10% year-over-year increase. Key highlights
include:
- 14th consecutive quarter of sequential pipeline
growth
- 8% growth in the U.S. and 11% internationally
- Approximately 70% of the pipeline is in the midscale and above
segments, which grew 6% year-over-year
- Approximately 58% of the pipeline is international
- Approximately 79% of the pipeline is new construction, of which
approximately 34% has broken ground
- The Company awarded 766 new contracts for its legacy brands in
full-year 2023, an increase of 8% compared to full-year 2022.
Additionally, the Company awarded 98 additional new contracts for
its ECHO Suites brand and, as of December
31, 2023, the Company had awarded 268 contracts, or over
33,000 rooms, for the brand.
RevPAR
|
|
Fourth
Quarter 2023
|
|
YOY
Constant
Currency
% Change
|
|
Full-Year
2023
|
|
YOY
Constant
Currency
% Change
|
United
States
|
|
$
44.06
|
|
(4 %)
|
|
$
50.42
|
|
(1 %)
|
International
|
|
32.12
|
|
7
|
|
33.21
|
|
21
|
Global
|
|
38.90
|
|
(1)
|
|
43.10
|
|
5
|
Fourth quarter global RevPAR declined 1% in constant currency
compared to 2022 reflecting a 4% decline in the U.S. and growth of
7% internationally. For the full year, global RevPAR grew 5%
in constant currency compared to 2022 reflecting a 1% decline in
the U.S. and growth of 21% internationally.
The Company had achieved record-breaking RevPAR in the U.S.
during the preceding year due to COVID-impacted travel
patterns. Comparing to 2019 to neutralize for COVID-impacted
travel patterns, U.S. RevPAR grew 10% in fourth quarter - a 120
basis point acceleration from third quarter 2023 growth - and 9%
for the full year. Internationally, year-over-year RevPAR
growth for both the fourth quarter and the full-year was primarily
driven by higher occupancy levels. Compared to 2019,
international RevPAR grew in fourth quarter and full-year by 44%
and 36%, respectively, on a constant-currency basis.
Operating Results
Fourth Quarter
- Fee-related and other revenues was $320
million compared to $310
million in fourth quarter 2022 reflecting global net room
growth as well as higher license and ancillary fees.
- The Company generated net income of $50
million compared to $56
million in fourth quarter 2022. The decrease was reflective
of a higher effective tax rate, higher interest expense, foreign
currency impact from hyper-inflation in Argentina and transaction-related expenses
resulting from the unsolicited offer by Choice Hotels, partially
offset by higher adjusted EBITDA.
- Adjusted EBITDA grew 22% to $154
million from $126 million.
This increase included a $21 million
favorable impact from marketing fund variability, excluding which
adjusted EBITDA grew 6% primarily reflecting higher fee-related and
other revenues.
- Diluted earnings per share was $0.60 compared to $0.63 in fourth quarter 2022. This decrease
reflects lower net income, partially offset by the benefit of a
lower share count due to share repurchase activity.
- Adjusted diluted EPS grew 26% to $0.91 per share from $0.72 per share. This increase included
$0.19 per share related to the
favorable marketing fund variability (after estimated taxes),
excluding which adjusted diluted EPS was unchanged year-over-year
as adjusted EBITDA growth and the benefit from share repurchase
activity was substantially offset by higher interest expense.
- During fourth quarter 2023, the Company's marketing fund
revenues exceeded expenses by $9
million; while in fourth quarter 2022, the Company's
marketing fund expenses exceeded revenues by $12 million, resulting in $21 million of marketing fund variability.
Full Year
- Fee-related and other revenues was $1,384 million compared to $1,354 million in full-year 2022, which included
$50 million from the Company's select
service management business and owned hotels, which were exited in
2022. On a comparable basis, fee-related and other revenues
increased 6% year-over-year primarily reflecting global RevPAR and
net room growth, higher license and ancillary fees and 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 $289
million compared to $355
million in full-year 2022, which included $37 million from the select-service managed and
owned hotels. The decrease was reflective of a higher effective tax
rate, higher interest expense, foreign currency impact from
hyper-inflation in Argentina and
transaction-related expenses resulting from the unsolicited offer
by Choice Hotels, partially offset by higher adjusted EBITDA.
- Adjusted EBITDA was $659 million
compared to $650 million in full-year
2022, which included $18 million from
the select-service managed and owned hotels. The growth in adjusted
EBITDA was further impacted by $11
million of unfavorable marketing fund variability. On a
comparable basis, adjusted EBITDA increased 6% reflecting higher
fee-related and other revenues.
- Diluted earnings per share was $3.41 compared to $3.91 in full-year 2022, which included
$0.40 per share from the
select-service managed and owned hotels. This decrease reflects the
lower net income, partially offset by the benefit of a lower share
count due to share repurchase activity.
- Adjusted diluted EPS was $4.01
per share compared to $3.96 per share
in full-year 2022, which included $0.15 per share from the select-service managed
and owned hotels. This growth in adjusted diluted EPS was further
impacted by $0.09 per share (after
estimated taxes) of unfavorable marketing fund variability. On a
comparable basis, adjusted diluted EPS increased 8% year-over-year
reflecting the adjusted EBITDA growth and the benefit from share
repurchase activity, partially offset by higher interest
expense.
- During full-year 2023, the Company's marketing fund revenues
exceeded expenses by $9 million;
while in 2022, the Company's marketing fund revenues exceeded
expenses by $20 million, resulting in
$11 million of marketing fund
variability.
Full reconciliations of GAAP results to the Company's non-GAAP
adjusted measures for all reported periods appear in the tables to
this press release.
Balance Sheet and Liquidity
The Company generated $376 million
of net cash provided by operating activities and free cash flow of
$339 million in the full-year
2023. The Company ended the quarter with a cash balance of
$66 million and approximately
$650 million in total
liquidity.
The Company's net debt leverage ratio was 3.2 times at
December 31, 2023, within the lower
half of the Company's 3 to 4 times stated target range.
Share Repurchases and Dividends
During the fourth quarter, the Company repurchased approximately
1.7 million shares of its common stock for $127 million. For the full-year 2023, the
Company repurchased approximately 5.5 million shares of its common
stock for $397 million, at an average price of $72.25, 8% lower than trading levels as of
February 13th.
The Company paid common stock dividends of $28 million, or $0.35 per share, in the fourth quarter of 2023
for a total of $118 million, or
$1.40 per share, for the full-year
2023.
For the full-year 2023, the Company returned $515 million
to shareholders through share repurchases and quarterly cash
dividends.
The Company's Board of Directors authorized a 9% increase in the
quarterly cash dividend to $0.38 per
share, beginning with the dividend expected to be declared in first
quarter 2024.
Full-Year 2024 Outlook
The Company provided the following outlook for full-year
2024:
|
|
2024
Outlook
|
Year-over-year rooms
growth
|
|
3 - 4%
|
Year-over-year global
RevPAR growth
|
|
2 - 3%
|
Fee-related and other
revenues
|
|
$1.43 - $1.46
billion
|
Adjusted
EBITDA
|
|
$690 - $700
million
|
Adjusted net
income
|
|
$341 - $351
million
|
Adjusted diluted
EPS
|
|
$4.11 -
$4.23
|
Free cash flow
conversion rate
|
|
~60%
|
|
|
|
|
|
|
|
NOTE:
|
Outlook for adjusted
EBITDA, adjusted net income, adjusted diluted EPS and free cash
flow conversion rate excludes all expenses and cash outlays
associated with the unsolicited offer by Choice Hotels, which are
currently anticipated to approximate $75 million before
taxes.
|
Year-over-year growth rates for adjusted EBITDA, adjusted net
income and adjusted diluted EPS are not comparable due to full-year
2023 marketing fund revenues exceeding expenses by $9 million, which substantially completed the
recovery of the $49 million support
the Company provided to its owners during COVID. The Company
expects marketing revenues to equal expenses during full-year 2024
though seasonality of spend will affect the quarterly comparisons
throughout the year.
More detailed projections are available in Table 8 of this press
release. The Company is providing certain financial metrics
only on a non-GAAP basis because, without unreasonable efforts, it
is unable to predict with reasonable certainty the occurrence or
amount of all of the adjustments or other potential adjustments
that may arise in the future during the forward-looking period,
which can be dependent on future events that may not be reliably
predicted. Based on past reported results, where one or more
of these items have been applicable, such excluded items could be
material, individually or in the aggregate, to the reported
results.
Conference Call Information
Wyndham Hotels will hold a conference call with investors to
discuss the Company's results and outlook on Thursday, February 15, 2024 at 8:30 a.m. ET. Listeners can access the
webcast live through the Company's website at
https://investor.wyndhamhotels.com. The conference call may
also be accessed by dialing 800 225-9448 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 February
15, 2024. A telephone replay will be available for
approximately ten days beginning at noon
ET on February 15, 2024 at 800
839-9719.
Presentation of Financial Information
Financial information discussed in this press release includes
non-GAAP measures, which include or exclude certain items.
These non-GAAP measures differ from reported GAAP results and are
intended to illustrate what management believes are relevant
period-over-period comparisons and are helpful to investors as an
additional tool for further understanding and assessing the
Company's ongoing operating performance. The Company uses
these measures internally to assess its operating performance, both
absolutely and in comparison to other companies, and to make day to
day operating decisions, including in the evaluation of selected
compensation decisions. Exclusion of items in the Company's
non-GAAP presentation should not be considered an inference that
these items are unusual, infrequent or non-recurring. Full
reconciliations of GAAP results to the comparable non-GAAP measures
for the reported periods appear in the financial tables section of
this press release.
About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world's largest
hotel franchising company by the number of properties, with
approximately 9,200 hotels across over 95 countries on six
continents. Through its network of approximately 872,000
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 over 106
million enrolled members the opportunity to redeem points at
thousands of hotels, vacation club resorts and vacation rentals
globally. For more information, visit
https://investor.wyndhamhotels.com. The Company may use its
website 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.
For information related to Choice Hotels' hostile offer, please
visit www.staywyndham.com.
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 (other than with respect to
statements made in connection with the unsolicited exchange offer
by Choice to acquire all outstanding shares of our common stock
(the "Exchange Offer")). 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, factors relating to the Exchange Offer, including
actions taken by Choice in connection with such offer, actions
taken by Wyndham or its stockholders in respect of the Exchange
Offer or other actions or developments involving Choice, such as a
potential proxy contest, the completion or failure to complete the
Exchange Offer, the effects of such offer on our business, such as
the cost, loss of time and disruption; general economic conditions,
including inflation, higher interest rates and potential
recessionary pressures; global or regional health crises or
pandemics (such as the COVID-19 pandemic) including the resulting
impact on the Company's business operations, financial results,
cash flows and liquidity, as well as the impact on its franchisees,
guests and team members, the hospitality industry and overall
demand for and restrictions on travel; the performance of the
financial and credit markets; the economic environment for the
hospitality industry; operating risks associated with the hotel
franchising business; the Company's relationships with franchisees;
the impact of war, terrorist activity, political instability or
political strife, including the ongoing conflicts between
Russia and Ukraine and between Israel and Hamas; 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
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
revenues
|
|
|
|
|
|
|
|
Royalties and
franchise fees
|
$
117
|
|
$
118
|
|
$
532
|
|
$
512
|
Marketing, reservation
and loyalty
|
133
|
|
128
|
|
578
|
|
544
|
Management and other
fees
|
3
|
|
3
|
|
14
|
|
57
|
License and other
fees
|
29
|
|
26
|
|
112
|
|
100
|
Other
|
38
|
|
35
|
|
148
|
|
141
|
Fee-related and other
revenues
|
320
|
|
310
|
|
1,384
|
|
1,354
|
Cost
reimbursements
|
1
|
|
24
|
|
13
|
|
144
|
Net revenues
|
321
|
|
334
|
|
1,397
|
|
1,498
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Marketing, reservation
and loyalty
|
124
|
|
140
|
|
569
|
|
524
|
Operating
|
30
|
|
22
|
|
94
|
|
106
|
General and
administrative
|
37
|
|
35
|
|
130
|
|
123
|
Cost
reimbursements
|
1
|
|
24
|
|
13
|
|
144
|
Depreciation and
amortization
|
20
|
|
19
|
|
76
|
|
77
|
Transaction-related
|
5
|
|
—
|
|
11
|
|
—
|
Separation-related
|
—
|
|
1
|
|
1
|
|
1
|
Gain on asset sale,
net
|
—
|
|
—
|
|
—
|
|
(35)
|
Total
expenses
|
217
|
|
241
|
|
894
|
|
940
|
|
|
|
|
|
|
|
|
Operating
income
|
104
|
|
93
|
|
503
|
|
558
|
Interest expense,
net
|
29
|
|
21
|
|
102
|
|
80
|
Early extinguishment of
debt
|
—
|
|
—
|
|
3
|
|
2
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
75
|
|
72
|
|
398
|
|
476
|
Provision for income
taxes
|
25
|
|
16
|
|
109
|
|
121
|
Net
income
|
$
50
|
|
$
56
|
|
$
289
|
|
$
355
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
0.61
|
|
$
0.64
|
|
$
3.43
|
|
$
3.93
|
Diluted
|
0.60
|
|
0.63
|
|
3.41
|
|
3.91
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
82.0
|
|
87.8
|
|
84.4
|
|
90.3
|
Diluted
|
82.6
|
|
88.3
|
|
84.9
|
|
90.8
|
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
|
|
$
321
|
|
$
1,397
|
|
2022
|
272
|
|
335
|
|
367
|
|
303
|
|
1,277
|
|
2021
|
209
|
|
283
|
|
337
|
|
270
|
|
1,099
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
164
|
|
$
175
|
|
$
215
|
|
$
173
|
|
$
727
|
|
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
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
2022
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2021
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
(17)
|
|
$
(17)
|
|
$
(15)
|
|
$
(19)
|
|
$
(68)
|
|
2022
|
(16)
|
|
(16)
|
|
(17)
|
|
(16)
|
|
(66)
|
|
2021
|
(13)
|
|
(14)
|
|
(15)
|
|
(16)
|
|
(59)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
313
|
|
$
362
|
|
$
402
|
|
$
321
|
|
$
1,397
|
|
2022
|
371
|
|
386
|
|
407
|
|
334
|
|
1,498
|
|
2021
|
303
|
|
406
|
|
463
|
|
392
|
|
1,565
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
67
|
|
$
70
|
|
$
103
|
|
$
50
|
|
$
289
|
|
2022
|
106
|
|
92
|
|
101
|
|
56
|
|
355
|
|
2021
|
24
|
|
68
|
|
103
|
|
48
|
|
244
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2023
|
$
147
|
|
$
158
|
|
$
200
|
|
$
154
|
|
$
659
|
|
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)
|
|
|
|
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
Net income
|
$
289
|
|
$
355
|
Depreciation and
amortization
|
76
|
|
77
|
Deferred income
taxes
|
(17)
|
|
(39)
|
Gain on asset sale,
net
|
—
|
|
(35)
|
Payments of
development advance notes, net
|
(72)
|
|
(48)
|
Working capital and
other, net
|
100
|
|
89
|
Net cash provided by
operating activities
|
376
|
|
399
|
Investing
activities
|
|
|
|
Property and equipment
additions
|
(37)
|
|
(39)
|
Proceeds from asset
sales, net (a)
|
—
|
|
263
|
Acquisition of hotel
brand
|
—
|
|
(44)
|
Other, net
|
(29)
|
|
(1)
|
Net cash (used
in)/provided by investing activities
|
(66)
|
|
179
|
Financing
activities
|
|
|
|
Proceeds from
long-term debt
|
1,378
|
|
400
|
Payments of long-term
debt
|
(1,245)
|
|
(404)
|
Dividends to
shareholders
|
(118)
|
|
(116)
|
Repurchases of common
stock
|
(393)
|
|
(448)
|
Other, net
|
(24)
|
|
(16)
|
Net cash used in
financing activities
|
(402)
|
|
(584)
|
Effect of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
(3)
|
|
(4)
|
Net decrease in cash,
cash equivalents and restricted cash
|
(95)
|
|
(10)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
161
|
|
171
|
Cash, cash equivalents
and restricted cash, end of period
|
$
66
|
|
$
161
|
Free Cash
Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
|
|
|
|
2023
|
|
2022
|
Net cash provided by
operating activities (b)
|
|
$
376
|
|
$
399
|
Less: Property and
equipment additions
|
|
(37)
|
|
(39)
|
Free cash
flow
|
|
$
339
|
|
$
360
|
|
|
|
|
|
|
(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 the absence of $13 million due to the
exit of the select-service management business and owned
hotels. Excluding which, free cash flow decreased $8 million
as higher cash earnings were offset by $24 million of incremental
development advances and $22 million of higher interest
expense.
|
Table
4
|
WYNDHAM HOTELS &
RESORTS
|
BALANCE SHEET
SUMMARY AND DEBT
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
December 31,
2023
|
|
As of
December 31,
2022
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
66
|
|
$
161
|
Trade receivables,
net
|
|
|
241
|
|
234
|
Property and equipment,
net
|
|
|
88
|
|
99
|
Goodwill and intangible
assets, net
|
|
|
3,104
|
|
3,131
|
Other current and
non-current assets
|
|
|
534
|
|
498
|
Total assets
|
|
|
$
4,033
|
|
$
4,123
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Total debt
|
|
|
$
2,201
|
|
$
2,077
|
Other current
liabilities
|
|
|
422
|
|
386
|
Deferred income tax
liabilities
|
|
|
325
|
|
345
|
Other non-current
liabilities
|
|
|
339
|
|
353
|
Total
liabilities
|
|
|
3,287
|
|
3,161
|
Total stockholders'
equity
|
|
|
746
|
|
962
|
Total liabilities and
stockholders' equity
|
|
|
$
4,033
|
|
$
4,123
|
|
|
|
|
|
|
Our outstanding debt
was as follows:
|
|
|
|
|
|
|
Weighted Average
Interest Rate (a)
|
|
As of
December 31,
2023
|
|
As of
December 31,
2022
|
|
|
|
$750 million revolving
credit facility (due April 2027)
|
7.2 %
|
|
$
160
|
|
$
—
|
$400 million term loan
A (due April 2027)
|
7.2 %
|
|
384
|
|
399
|
$1.6 billion term loan
B (due May 2025)
|
|
|
—
|
|
1,139
|
$1.1 billion term loan
B (due May 2030)
|
4.1 %
|
|
1,123
|
|
—
|
$500 million 4.375%
senior unsecured notes (due August 2028)
|
4.4 %
|
|
495
|
|
494
|
Finance
leases
|
4.5 %
|
|
39
|
|
45
|
Total debt
|
4.9 %
|
|
2,201
|
|
2,077
|
Cash and cash
equivalents
|
|
|
66
|
|
161
|
Net debt
|
|
|
$
2,135
|
|
$
1,916
|
Net debt leverage
ratio
|
|
|
3.2x
|
|
2.9x
|
|
|
|
|
|
|
(a)
|
Represents
weighted average interest rates for the fourth quarter 2023,
including the effects from hedging.
|
Our outstanding debt
as of December 31, 2023 matures as follows:
|
|
|
|
|
|
|
Amount
|
Within 1
year
|
|
|
$
37
|
Between 1 and 2
years
|
|
|
45
|
Between 2 and 3
years
|
|
|
48
|
Between 3 and 4
years
|
|
|
485
|
Between 4 and 5
years
|
|
|
514
|
Thereafter
|
|
|
1,072
|
Total
|
|
|
$
2,201
|
Table
5
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
|
|
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
|
26,700
|
|
26,700
|
|
—
|
|
—
|
|
|
International
|
39,300
|
|
43,700
|
|
(4,400)
|
|
(10)
|
|
|
Global
|
66,000
|
|
70,400
|
|
(4,400)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Deletions
|
|
|
|
|
|
|
|
|
|
United
States
|
(22,900)
|
|
(23,500)
|
|
600
|
|
3
|
|
|
International
|
(13,800)
|
|
(14,500)
|
|
700
|
|
5
|
|
|
Global
|
(36,700)
|
|
(38,000)
|
|
1,300
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Room Count
(December 31)
|
|
|
|
|
|
|
|
|
|
United
States
|
497,600
|
|
493,800
|
|
3,800
|
|
1
|
|
|
International
|
374,200
|
|
348,700
|
|
25,500
|
|
7
|
|
|
Global
|
871,800
|
|
842,500
|
|
29,300
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December
31,
|
|
FY 2023
Royalty
Contribution
|
|
2023
|
|
2022
|
|
Change
|
|
%
Change
|
|
System
Size
|
|
|
|
|
|
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
Economy
|
230,800
|
|
235,800
|
|
(5,000)
|
|
(2 %)
|
|
|
Midscale and Upper
Midscale
|
247,600
|
|
239,000
|
|
8,600
|
|
4
|
|
|
Upscale and
Above
|
19,200
|
|
19,000
|
|
200
|
|
1
|
|
|
Total United
States
|
497,600
|
|
493,800
|
|
3,800
|
|
1 %
|
|
80
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Greater
China
|
171,100
|
|
161,100
|
|
10,000
|
|
6 %
|
|
3
|
Rest of Asia
Pacific
|
34,600
|
|
30,400
|
|
4,200
|
|
14
|
|
2
|
Europe, the Middle
East and Africa
|
88,700
|
|
79,200
|
|
9,500
|
|
12
|
|
7
|
Canada
|
39,900
|
|
39,500
|
|
400
|
|
1
|
|
5
|
Latin
America
|
39,900
|
|
38,500
|
|
1,400
|
|
4
|
|
3
|
Total
International
|
374,200
|
|
348,700
|
|
25,500
|
|
7 %
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Global
|
871,800
|
|
842,500
|
|
29,300
|
|
3 %
|
|
100 %
|
Table 5
(continued)
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2023
|
|
Constant
Currency
% Change
(a)
|
|
|
Regional RevPAR
Growth
|
|
|
|
|
|
United
States
|
|
|
|
|
|
Economy
|
$
35.83
|
|
(7 %)
|
|
|
Midscale and Upper
Midscale
|
49.47
|
|
(4)
|
|
|
Upscale and
Above
|
89.85
|
|
5
|
|
|
Total United
States
|
$
44.06
|
|
(4 %)
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
Greater
China
|
$
16.58
|
|
44 %
|
|
|
Rest of Asia
Pacific
|
33.28
|
|
2
|
|
|
Europe, the Middle
East and Africa
|
52.15
|
|
5
|
|
|
Canada
|
44.75
|
|
4
|
|
|
Latin
America
|
43.91
|
|
(12)
|
|
|
Total
International
|
$
32.12
|
|
7 %
|
|
|
|
|
|
|
|
|
Global
|
$
38.90
|
|
(1 %)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Average Royalty
Rate
|
|
|
|
|
|
United
States
|
4.6 %
|
|
4.6 %
|
|
—
|
International
|
2.3 %
|
|
2.0 %
|
|
30 bps
|
Global
|
3.8 %
|
|
3.8 %
|
|
—
|
|
|
|
|
|
|
|
Year Ended
December 31, 2023
|
|
Constant
Currency
% Change
(a)
|
|
|
Regional RevPAR
Growth
|
|
|
|
|
|
United
States
|
|
|
|
|
|
Economy
|
$
41.76
|
|
(2 %)
|
|
|
Midscale and Upper
Midscale
|
56.27
|
|
—
|
|
|
Upscale and
Above
|
97.14
|
|
4
|
|
|
Total United
States
|
$
50.42
|
|
(1 %)
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
Greater
China
|
$
16.76
|
|
33 %
|
|
|
Rest of Asia
Pacific
|
32.58
|
|
15
|
|
|
Europe, the Middle
East and Africa
|
52.02
|
|
21
|
|
|
Canada
|
54.35
|
|
12
|
|
|
Latin
America
|
44.53
|
|
15
|
|
|
Total
International
|
$
33.21
|
|
21 %
|
|
|
|
|
|
|
|
|
Global
|
$
43.10
|
|
5 %
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Average Royalty
Rate
|
|
|
|
|
|
United
States
|
4.6 %
|
|
4.6 %
|
|
—
|
International
|
2.4 %
|
|
2.1 %
|
|
30 bps
|
Global
|
3.9 %
|
|
3.9 %
|
|
—
|
|
|
|
|
(a)
|
International and
global 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
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Global
RevPAR
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
$
37.20
|
|
$
46.47
|
|
$
49.71
|
|
$
38.90
|
|
$
43.10
|
|
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
|
|
$
44.06
|
|
$
50.42
|
|
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
|
|
$
32.12
|
|
$
33.21
|
|
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
|
|
871,800
|
|
871,800
|
|
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
|
|
497,600
|
|
497,600
|
|
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
|
|
374,200
|
|
374,200
|
|
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
|
|
$
38.90
|
|
$
43.10
|
|
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
|
|
$
44.06
|
|
$
50.42
|
|
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
|
|
$
32.12
|
|
$
33.21
|
|
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
|
|
871,800
|
|
871,800
|
|
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
|
|
497,600
|
|
497,600
|
|
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
|
|
374,200
|
|
374,200
|
|
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
|
|
$
50
|
|
$
289
|
Provision for income
taxes
|
24
|
|
26
|
|
33
|
|
25
|
|
109
|
Depreciation and
amortization
|
19
|
|
19
|
|
19
|
|
20
|
|
76
|
Interest expense,
net
|
22
|
|
24
|
|
27
|
|
29
|
|
102
|
Early extinguishment of
debt (a)
|
—
|
|
3
|
|
—
|
|
—
|
|
3
|
Stock-based
compensation
|
9
|
|
9
|
|
10
|
|
11
|
|
39
|
Development advance
notes amortization
|
3
|
|
4
|
|
4
|
|
5
|
|
15
|
Transaction-related
(b)
|
—
|
|
4
|
|
1
|
|
5
|
|
11
|
Separation-related
(c)
|
2
|
|
(2)
|
|
—
|
|
—
|
|
1
|
Foreign currency impact
of highly inflationary countries (d)
|
1
|
|
1
|
|
3
|
|
9
|
|
14
|
Adjusted
EBITDA
|
$
147
|
|
$
158
|
|
$
200
|
|
$
154
|
|
$
659
|
|
|
|
|
|
|
|
|
|
|
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, including Choice Hotels'
unsolicited offer.
|
(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
December 31,
|
|
Year Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Diluted earnings per
share
|
$
0.60
|
|
$
0.63
|
|
$
3.41
|
|
$
3.91
|
|
|
|
|
|
|
|
|
Net
income
|
$
50
|
|
$
56
|
|
$
289
|
|
$
355
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition-related
amortization expense (a)
|
7
|
|
6
|
|
27
|
|
31
|
Foreign currency
impact of highly inflationary countries
|
9
|
|
2
|
|
14
|
|
4
|
Transaction-related
|
5
|
|
—
|
|
11
|
|
—
|
Early extinguishment
of debt
|
—
|
|
—
|
|
3
|
|
2
|
Separation-related
|
—
|
|
1
|
|
1
|
|
1
|
Gain on asset sale,
net
|
—
|
|
—
|
|
—
|
|
(35)
|
Total adjustments
before tax
|
21
|
|
9
|
|
56
|
|
3
|
Income tax
provision/(benefit) (b)
|
(4)
|
|
1
|
|
4
|
|
(2)
|
Total adjustments after
tax
|
25
|
|
8
|
|
52
|
|
5
|
Adjusted net
income
|
$
75
|
|
$
64
|
|
$
341
|
|
$
360
|
Adjustments - EPS
impact
|
0.31
|
|
0.09
|
|
0.60
|
|
0.05
|
Adjusted diluted
EPS
|
$
0.91
|
|
$
0.72
|
|
$
4.01
|
|
$
3.96
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
82.6
|
|
88.3
|
|
84.9
|
|
90.8
|
|
|
|
|
|
|
(a)
|
Reflected in
depreciation and amortization on the income statement.
|
(b)
|
Reflects the
estimated tax effects of the adjustments. The 2023 amounts
include a foreign tax assessment impacting years 2017, 2018 and
2019.
|
Table
8
|
WYNDHAM HOTELS &
RESORTS
|
2024
OUTLOOK
|
As of
February 14, 2024
|
(In millions, except
per share data)
|
|
|
|
|
2024 Outlook
(a)
|
Fee-related and other
revenues
|
$
|
1,430 –
1,460
|
Adjusted
EBITDA
|
|
690 – 700
|
Depreciation and
amortization expense
|
|
46 – 48
|
Development advance
notes amortization expense
|
|
23 – 25
|
Stock-based
compensation expense
|
|
43 – 45
|
Interest expense,
net
|
|
118 – 120
|
Adjusted income before
income taxes
|
|
454 – 468
|
Income tax expense
(b)
|
|
114 – 117
|
Adjusted net
income
|
$
|
341 – 351
|
|
|
|
Adjusted diluted
EPS
|
$
|
4.11 – 4.23
|
|
|
|
Diluted shares
(c)
|
|
83.0
|
|
|
|
Capital
expenditures
|
|
Approx. $40
|
Development advance
notes
|
|
Approx. $90
|
|
|
|
Free cash flow
conversion rate
|
|
~60%
|
|
|
|
Year-over-Year
Growth
|
|
|
Global
RevPAR
|
|
2% – 3%
|
Number of
rooms
|
|
3% – 4%
|
|
|
|
|
|
NOTE:
|
Outlook for adjusted
EBITDA, adjusted net income, adjusted diluted EPS and free cash
flow conversion rate excludes all expenses and cash outlays
associated with the unsolicited offer by Choice Hotels, which are
currently anticipated to approximate $75 million before
taxes.
|
(a)
|
Year-over-year growth
rates for adjusted EBITDA, adjusted net income and adjusted diluted
EPS are not comparable due to full-year 2023 marketing fund
revenues exceeding expenses by $9 million (before taxes), which
substantially completed the recovery of the $49 million support the
Company provided to its owners during COVID.
|
(b)
|
Outlook assumes an
effective tax rate of approximately 25%.
|
(c)
|
Excludes the impact of
any share repurchases after December 31, 2023.
|
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: For 2023, 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. For 2024, represents a
comparison eliminating the year-over-year variability of the
Company's marketing funds.
Constant Currency: Represents a comparison eliminating
the effects of foreign exchange rate fluctuations between periods
(foreign currency translation) and the impact caused by any foreign
exchange related activities (i.e., hedges, balance sheet
remeasurements and/or adjustments).
Free Cash Flow: For 2023, represents net cash provided by
operating activities less capital expenditures. For 2024, the
Company's definition of free cash flow was modified to reflect the
add back of development advances as such outflows represent capital
deployment into the business. The Company believes free cash
flow to be a useful operating performance measure to it and
investors. This measure helps the Company and investors evaluate
its ability to generate cash beyond what is needed to fund capital
expenditures, debt service and other obligations. Notwithstanding
cash on hand and incremental borrowing capacity, free cash flow
reflects the Company's ability to grow its business through
investments and acquisitions, as well as its ability to return cash
to shareholders through dividends and share repurchases or even to
delever. Free cash flow is not a representation of how the Company
will use excess cash. A limitation of using free cash flow versus
the GAAP measure of net cash provided by operating activities as a
means for evaluating Wyndham Hotels is that free cash flow does not
represent the total cash movement for the period as detailed in the
condensed consolidated statement of cash flows.
Free Cash Flow Conversion Rate: Represents the
percentage of adjusted EBITDA that is converted to free cash flow
and provides insights into how efficiently the Company is able to
turn profits into cash available for use, such as for investments,
debt reduction, dividends or share repurchases.
Net Debt Leverage Ratio: Calculated by dividing
total debt less cash and cash equivalents by trailing twelve months
adjusted EBITDA.
Number of Rooms: Represents the number of rooms at
the end of the period which are (i) either under franchise and/or
management agreements or Company-owned and (ii) properties under
affiliation agreements for which 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