PARSIPPANY, N.J., April 28, 2021 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2021. Highlights include:

(PRNewsfoto/Wyndham Hotels & Resorts)

  • Diluted earnings per share was $0.26, and adjusted diluted earnings per share was $0.36.
  • Net income was $24 million and adjusted net income was $33 million.
  • Adjusted EBITDA was $97 million.
  • Generated $64 million of net cash provided by operating activities and $59 million of free cash flow.
  • Global RevPAR declined 11% compared to first quarter 2020 and 31% compared to first quarter 2019 in constant currency.
  • Paid quarterly cash dividend of $0.16 per share.
  • Redeemed all $500 million aggregate principal amount of its outstanding 5.375% Senior Notes due 2026 on April 15, 2021.
  • Company updates its previous 2021 projections.

"Wyndham's select-service franchise business model delivered a strong start to 2021 as leisure customers hit the road at a pace not experienced since the pandemic started and demand from our everyday business travelers continued to accelerate," said Geoffrey A. Ballotti, president and chief executive officer. "We were very pleased to see our development pipelines grow sequentially, both domestically and internationally, and our room openings and deletions improve year-over-year. We were also encouraged to see conversion room openings increase year-over-year, representing over 70% of total openings this quarter."

Revenues declined from $410 million in the first quarter of 2020 to $303 million in the first quarter of 2021. The decline includes lower pass-through cost-reimbursement revenues of $55 million in the Company's hotel management business, which have no impact on adjusted EBITDA. Excluding cost-reimbursement revenues, revenues declined $52 million primarily reflecting an 11% decline in constant-currency global RevPAR.

The Company generated net income of $24 million, or $0.26 per diluted share, compared to $22 million, or $0.23 per diluted share, in the first quarter of 2020. The increase of $2 million, or $0.03 per diluted share, was a result of the Company's COVID-19 cost mitigation plan implemented in April 2020, lower volume-related expenses and the absence of restructuring and transaction-related expenses, which were partially offset by the global RevPAR decline.

The following discussion of first quarter operating results focuses on the Company's key drivers as well as revenue and adjusted EBITDA for each of the Company's segments. 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
























March 31, 2021


December 31, 2020


YTD Change (bps)

United States


486,000


487,300


(30)


International


311,200


308,600


80


Global


797,200


795,900


20


 

During the first quarter of 2021, the Company's global system grew 20 basis points reflecting strong growth in the Company's direct-franchising business in China, primarily offset by the impact from supply chain delays on new construction openings in the United States. As expected, terminations normalized in the first quarter and the Company remains solidly on track with its goal of achieving a 95% retention rate for the full year 2021.

RevPAR




































First Quarter 2021


First Quarter 2020


First Quarter 2019


YOY % Change


% Change vs. 2019

United States


$

30.62



$

33.45



$

40.56



(8)



(25)


International


15.83



18.45



28.92



(14)



(45)


Global


24.90



27.68



36.21



(10)



(31)


Global and International RevPAR began to lap the onset of the COVID-19 pandemic in January 2021 while the U.S. began to lap its onset in March 2021. As such, comparisons to 2019 (on a two-year basis) are more meaningful when evaluating trends. On this basis, global RevPAR declined 31% reflecting a 25% decline in the U.S. and a 45% decline internationally. The 25% decline in the U.S. represents continued sequential improvement compared to a decline of 31% in the fourth quarter of 2020. The 45% decline internationally is consistent with the fourth quarter 2020 performance.

Business Segment Results










































Revenue


Adjusted EBITDA



First Quarter
2021


First Quarter
2020


% Change


First Quarter
2021


First Quarter
2020


% Change

Hotel Franchising


$

209



$

243



(14)



$

105



$

110



(5)


Hotel Management


94



167



(44)



5



17



(71)


Corporate and Other








(13)



(18)



28


Total Company


$

303



$

410



(26)



$

97



$

109



(11)


Hotel Franchising revenues decreased $34 million year-over-year reflecting the global RevPAR decline, while adjusted EBITDA declined $5 million as the impact of the RevPAR decline was almost entirely offset by the Company's COVID-19 cost mitigation plan implemented in April 2020 and lower volume-related expenses.

Hotel Management revenues decreased $73 million year-over-year reflecting a $55 million reduction in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues decreased $18 million due to the global RevPAR decline and lower termination fees. Adjusted EBITDA declined $12 million year-over-year reflecting the revenue decrease, partially offset by lower volume-related expenses.

Development

The Company awarded 112 new contracts this quarter compared to 115 in first quarter 2020 and 124 in first quarter 2019. At March 31, 2021, the Company's development pipeline consisted of approximately 1,400 hotels and approximately 187,000 rooms, growing sequentially by 120 basis points, 70 basis points domestically and 150 basis points internationally. Approximately 64% of the Company's development pipeline is international and 75% is new construction. Approximately 34% of the new construction pipeline under development has broken ground.

Cash and Liquidity

The Company generated $64 million of net cash provided by operating activities in the first quarter of 2021 compared to $17 million in first quarter 2020. Free cash flow was $59 million in the first quarter of 2021 compared to $10 million (which included $15 million of special-item cash outlays) in first quarter 2020.

At March 31, 2021, the Company had $531 million of cash on its balance sheet and $1.3 billion in total liquidity. In April 2021, the Company redeemed all $500 million aggregate principal amount of its outstanding 5.375% senior notes due 2026, which also reduced the Company's total liquidity to approximately $750 million. The Company expects this redemption to reduce its annual cash interest expense by approximately $27 million. Coupled with the issuance of 4.375% senior notes in August of 2020, this redemption effectively returns the Company to pre-pandemic debt and liquidity levels while extending $500 million of maturity by approximately 2.5 years at a 100 basis point (or 19%) lower interest rate.

Dividends

The Company paid common stock dividends of $15 million, or $0.16 per share, in the first quarter of 2021.

2021 Projections

The Company is not providing a complete outlook for full-year 2021 given the RevPAR uncertainties ahead; however, the Company is updating the projections provided in February:

  • Net rooms growth of 1% to 2%, consistent with February's projection.
  • Every point of RevPAR change versus 2020 is now expected to generate approximately $2.8 million of adjusted EBITDA change versus 2020 (increased from $2.5 million per point in February).
  • License fees are expected to be $70 million reflecting the minimum levels outlined in the underlying agreements, consistent with February's projection.
  • Marketing, reservation and loyalty expenses are not expected to exceed marketing, reservation and loyalty revenues, consistent with February's projection. As such, the Company expects no meaningful impact to full-year 2021 adjusted EBITDA from the marketing, reservation and loyalty funds.
  • The Company does not expect any meaningful special-item cash outlays in 2021, consistent with February's projection.

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, April 29, 2021 at 8:30 a.m. ET. Listeners can access the webcast live through the Company's website at www.investor.wyndhamhotels.com. The conference call may also be accessed by dialing 877 876-9174 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 April 29, 2021. A telephone replay will be available for approximately ten days beginning at noon ET on April 29, 2021 at 800 723-0549.

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 over 8,900 hotels across nearly 95 countries on six continents. Through its network of over 797,000 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 20 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. Wyndham Hotels & Resorts is also a leading provider of hotel management services. The Company's award-winning Wyndham Rewards loyalty program offers 87 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the federal securities laws, including statements related to Wyndham Hotels' current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures and dividends, restructuring charges and statements related to the coronavirus pandemic ("COVID-19"). Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham Hotels 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 Wyndham Hotels to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions; the continuation or worsening of the effects from COVID-19, its scope, duration and impact on the Company's business operations, financial results, cash flows and liquidity, as well as the impact on the Company's franchisees and property owners, guests and team members, the hospitality industry and overall demand for travel; the success of the Company's mitigation efforts in response to COVID-19; the Company's performance in any recovery from COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising and management businesses; the Company's relationships with franchisees and property owners; the impact of war, terrorist activity, political instability or political strife; concerns with or threats of pandemics, contagious diseases or health epidemics, including the effects of COVID-19 and any resurgence or mutations of the virus and actions governments, businesses and individuals take in response to the pandemic, including stay-in-place directives and other travel restrictions; risks related to restructuring or strategic initiatives; risks related to the Company's relationship with CorePoint Lodging; 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 as a result of COVID-19; and the Company's ability to make or pay, plans for, and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.







Contacts

Investors:

Matt Capuzzi

Senior Vice President, Investor Relations

973 753-6453

ir@wyndham.com

 

Media: 

Dave DeCecco  

Group Vice President, Global Communications 

973 753-6590 

WyndhamHotelsNews@wyndham.com

 

















Table 1













WYNDHAM HOTELS & RESORTS













INCOME STATEMENT













(In millions, except per share data)













(Unaudited)






















Three Months Ended March 31,










2021


2020





Net revenues








Royalties and franchise fees

$

78



$

92






Marketing, reservation and loyalty

85



106






Management and other fees

19



32






License and other fees

20



21






Cost reimbursements

71



126






Other

30



33






Net revenues

303



410














Expenses








Marketing, reservation and loyalty

92



118






Operating

27



35






General and administrative

24



28






Cost reimbursements

71



126






Depreciation and amortization

24



25






Separation-related

2



1






Restructuring



13






Transaction-related, net



8














Total expenses

240



354














Operating income

63



56






Interest expense, net

28



25














Income before income taxes

35



31






Provision for income taxes

11



9






Net income

$

24



$

22














Earnings per share








Basic

$

0.26



$

0.23






Diluted

0.26



0.23














Weighted average shares outstanding








Basic

93.4



93.7






Diluted

93.8



93.9






 


































Table 2

WYNDHAM HOTELS & RESORTS

HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT




The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized on a regular basis by our chief operating decision maker to assess performance and allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA. We believe that adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, allows a more complete understanding of our operating performance. We use this measure internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. During the first quarter of 2021, we modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how our chief operating decision maker reviews operating performance beginning in 2021. We have applied the modified definition of adjusted EBITDA to all periods presented.




First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full
Year

Hotel Franchising











Net revenues











2021

$

209



n/a



n/a



n/a



n/a



2020

243



182



236



202



863



2019

269



331



379



300



1,279



Adjusted EBITDA (a)











2021

$

105



n/a



n/a



n/a



n/a



2020

110



86



119



77



392



2019

115



164



197



153



629













Hotel Management











Net revenues











2021

$

94



n/a



n/a



n/a



n/a


2020

167



76



101



94



437



2019

197



201



180



190



768



Adjusted EBITDA











2021

$

5



n/a



n/a



n/a



n/a



2020

17



(4)



2



(1)



13



2019

16



16



13



21



66













Corporate and Other











Net revenues











2021

$



n/a



n/a



n/a



n/a



2020











2019

2



1



1



2



6



Adjusted EBITDA











2021

$

(13)



n/a



n/a



n/a



n/a



2020

(18)



(16)



(18)



(18)



(69)



2019

(18)



(19)



(18)



(19)



(74)













Total Company











Net revenues











2021

$

303



n/a



n/a



n/a



n/a



2020

410



258



337



296



1,300



2019

468



533



560



492



2,053



Net income/(loss)











2021

$

24



n/a



n/a



n/a



n/a



2020

22



(174)



27



(7)



(132)



2019

21



26



45



64



157



Adjusted EBITDA (a)











2021

$

97



n/a



n/a



n/a



n/a



2020

109



66



103



58



336



2019

113



161



192



155



621



NOTE: Amounts may not add across due to rounding. See Table 7 for reconciliations of Total Company non-GAAP measures and

Table 9 for definitions.

(a)

Adjusted EBITDA for 2020 and 2019 has been recast to exclude the amortization of development advance notes to be consistent with the current year presentation.

 













Table 3

WYNDHAM HOTELS & RESORTS

CONDENSED CASH FLOWS

(In millions)

(Unaudited)






Three Months Ended March 31,


2021


2020

Operating activities




Net income

$

24



$

22


Depreciation and amortization

24



25


Trade receivables

10



(17)


Accounts payable, accrued expenses and other current liabilities

(24)



(14)


Deferred revenues

9



(2)


Other, net

21



3


Net cash provided by operating activities

64



17


Investing activities




Property and equipment additions

(5)



(7)


Net cash used in investing activities

(5)



(7)


Financing activities




Proceeds from borrowings



744


Principal payments on long-term debt

(4)



(14)


Dividends to shareholders

(15)



(30)


Repurchases of common stock



(50)


Other, net

(2)



(3)


Net cash (used in)/provided by financing activities

(21)



647


Effect of changes in exchange rates on cash, cash equivalents and restricted cash



(2)


Net increase in cash, cash equivalents and restricted cash

38



655


Cash, cash equivalents and restricted cash, beginning of period

493



94


Cash, cash equivalents and restricted cash, end of period

$

531



$

749






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, to the extent permitted. This non-GAAP measure 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 March 31,


2021


2020

Net cash provided by operating activities

$

64



$

17


Less: Property and equipment additions

(5)



(7)


Free cash flow

$

59



$

10






Adjusted free cash flow (a)

n/a



$

25

























(a)

Reflects the adjustment of $15 million for payments in connection with our acquisition of La Quinta, our spin-off from Wyndham Worldwide and our agreement with CorePoint Lodging for the three months ended March 31, 2020. There are no adjustments in the three months ended March 31, 2021.

 

 













Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)






As of
March 31, 2021


As of
December 31, 2020

Assets




Cash and cash equivalents

531



$

493


Trade receivables, net

274



295


Property and equipment, net

268



278


Goodwill and intangible assets, net

3,230



3,240


Other current and non-current assets

337



338


Total assets

$

4,640



$

4,644






Liabilities and stockholders' equity




Total debt

$

2,592



$

2,597


Other current liabilities

308



325


Deferred income tax liabilities

364



359


Other non-current liabilities

385



400


Total liabilities

3,649



3,681


Total stockholders' equity

991



963


Total liabilities and stockholders' equity

$

4,640



$

4,644






Our outstanding debt was as follows:





As of
March 31, 2021


As of
December 31, 2020



$750 million revolving credit facility (due May 2023)

$



$


Term loan (due May 2025)

1,550



1,554


5.375% senior unsecured notes (due April 2026) (a)

496



496


4.375% senior unsecured notes (due August 2028)

492



492


Finance leases

54



55


Total debt

2,592



2,597


Cash and cash equivalents

531



493


Net debt

$

2,061



$

2,104






Our outstanding debt as of March 31, 2021 matures as follows:







Amount

Within 1 year (b)



$

516


Between 1 and 2 years



21


Between 2 and 3 years



22


Between 3 and 4 years



22


Between 4 and 5 years



1,493


Thereafter



518


Total



$

2,592





















(a) 

The Company redeemed these notes on April 15, 2021 primarily with available cash.

(b) 

Includes 5.375% senior unsecured notes, which we redeemed on April 15, 2021.

 

 































Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS












Three Months Ended March 31,




2021


2020


Change


% Change



Beginning Room Count (January 1)










United States

487,300


510,200


(22,900)


(4%)



International

308,600


320,800


(12,200)


(4)



Global

795,900


831,000


(35,100)


(4)













Additions










United States

3,500


2,900


600


21



International

4,100


3,300


800


24



Global

7,600


6,200


1,400


23













Deletions










United States

(4,800)


(6,300)


1,500


24



International

(1,500)


(2,600)


1,100


42



Global

(6,300)


(8,900)


2,600


29













Ending Room Count (March 31)










United States

486,000


506,800


(20,800)


(4)



International

311,200


321,500


(10,300)


(3)



Global

797,200


828,300


(31,100)


(4%)














As of March 31,


FY 2019 Royalty
Contribution
(b)


2021


2020


Change


% Change (a)


System Size










United States










Economy

249,200


256,800


(7,600)


(3%)



Midscale and Upper Midscale

203,400


209,200


(5,800)


(3)



Extended Stay/Lifestyle

16,800


23,800


(7,000)


(29)



Upscale

16,600


17,000


(400)


(2)



Total United States

486,000


506,800


(20,800)


(4)


86%











International










Greater China

146,500


153,900


(7,400)


(5)


3

Rest of Asia Pacific

27,900


28,600


(700)


(2)


1

Europe, the Middle East and Africa

66,500


68,900


(2,400)


(3)


4

Canada

40,500


40,800


(300)


(1)


5

Latin America

29,800


29,300


500


2


1

Total International

311,200


321,500


(10,300)


(3)


14











Global

797,200


828,300


(31,100)


(4%)


100%































































(a)

2021 includes the global impacts from the Company's previously announced termination events in 2020 resulting in the deletion of approximately 26,700 rooms.

(b)

FY 2019 provided to illustrate pre-pandemic results.

 































Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS












Three Months Ended March 31,


2021


2020


% Change


Constant Currency %

  Change (a)


Two-Year Basis %
Change
(b)

Regional RevPAR Growth










United States










Economy

$

27.41


$

26.74


3%




(13%)

Midscale and Upper Midscale

33.12


37.41


(11)




(29)

Extended Stay/Lifestyle

37.85


47.68


(21)




(33)

Upscale

43.89


74.28


(41)




(52)

Total United States

$

30.62


$

33.45


(8)




(25)











International










Greater China

$

13.72


$

5.34


157


139%


(25%)

Rest of Asia Pacific

20.97


26.68


(21)


(28)


(46)

Europe, the Middle East and Africa

15.66


34.01


(54)


(54)


(65)

Canada

20.92


29.09


(28)


(32)


(42)

Latin America

14.60


29.13


(50)


(41)


(43)

Total International

$

15.83


$

18.45


(14)


(17)


(45)











Global

$

24.90


$

27.68


(10%)


(11%)


(31%)











Average Royalty Rate










United States

4.6%


4.6%






International

2.0%


2.2%


(20 bps)





Global

4.0%


4.0%











































































(a)

Excludes the impact of currency exchange movements.

(b)

Compares 2021 to 2019; international excludes the impact of currency exchange movements.














Table 6


WYNDHAM HOTELS & RESORTS


HISTORICAL REVPAR AND ROOMS














































First Quarter


Second Quarter


Third Quarter


Fourth Quarter


Full Year

Hotel Franchising












Global RevPAR











2021


$

24.02



n/a



n/a



n/a



n/a



2020


$

25.90



$

17.05



$

28.83



$

23.19



$

23.74



2019


$

33.76



$

42.04



$

45.23



$

34.51



$

38.91



U.S. RevPAR













2021


$

29.68



n/a



n/a



n/a



n/a



2020


$

31.43



$

23.19



$

36.06



$

27.28



$

29.50



2019


$

37.69



$

48.65



$

51.93



$

37.96



$

44.09



International RevPAR










2021


$

15.26



n/a



n/a



n/a



n/a



2020


$

17.39



$

7.66



$

17.39



$

16.71



$

14.75



2019


$

27.56



$

31.59



$

34.79



$

29.15



$

30.80



Global Rooms











2021


748,700


n/a


n/a


n/a


n/a


2020


769,000


754,700


748,200


746,500


746,500


2019


745,300


751,300


758,400


770,200


770,200


U.S. Rooms












2021


452,500


n/a


n/a


n/a


n/a


2020


463,900


460,200


459,600


452,600


452,600


2019


454,900


457,600


460,100


464,600


464,600


International Rooms










2021


296,200


n/a


n/a


n/a


n/a


2020


305,100


294,500


288,600


293,900


293,900


2019


290,400


293,700


298,300


305,600


305,600













Hotel Management











Global RevPAR











2021


$

38.17



n/a



n/a



n/a



n/a



2020


$

50.00



$

20.67



$

34.34



$

32.91



$

34.67



2019


$

63.25



$

66.67



$

66.65



$

59.19



$

64.01



U.S. RevPAR












2021


$

42.89



n/a



n/a



n/a



n/a



2020


$

54.35



$

23.21



$

39.12



$

34.14



$

37.97



2019


$

65.58



$

71.61



$

70.75



$

60.89



$

67.32



International RevPAR










2021


$

27.12



n/a



n/a



n/a



n/a



2020


$

38.07



$

13.78



$

23.16



$

29.86



$

26.21



2019


$

55.12



$

49.53



$

52.49



$

53.67



$

52.69



Global Rooms











2021


48,500



n/a



n/a



n/a



n/a



2020


59,300



58,200



55,800



49,400



49,400



2019


66,800



65,200



63,400



60,800



60,800



U.S. Rooms












2021


33,500



n/a



n/a



n/a



n/a



2020


42,900



41,800



38,100



34,700



34,700



2019


51,700



50,700



49,100



45,600



45,600



International Rooms










2021


15,000



n/a



n/a



n/a



n/a



2020


16,400



16,400



17,700



14,700



14,700



2019


15,100



14,500



14,300



15,200



15,200


















































































Table 6 (continued)

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS
















First Quarter


Second Quarter


Third Quarter


Fourth Quarter


Full Year

Total System












Global RevPAR











2021


$

24.90



n/a



n/a



n/a



n/a



2020


$

27.68



$

17.31



$

29.23



$

23.84



$

24.51



2019


$

36.21



$

44.06



$

46.94



$

36.36



$

40.92



U.S. RevPAR












2021


$

30.62



n/a



n/a



n/a



n/a



2020


$

33.45



$

23.19



$

36.31



$

27.80



$

30.20



2019


$

40.56



$

50.98



$

53.79



$

40.09



$

46.39



International RevPAR










2021


$

15.83



n/a



n/a



n/a



n/a



2020


$

18.45



$

7.96



$

17.72



$

17.37



$

15.35



2019


$

28.92



$

32.47



$

35.63



$

30.29



$

31.85



Global Rooms











2021


797,200



n/a



n/a



n/a



n/a



2020


828,300



812,900



804,000



795,900



795,900



2019


812,100



816,600



821,800



831,000



831,000



U.S. Rooms












2021


486,000



n/a



n/a



n/a



n/a



2020


506,800



502,000



497,700



487,300



487,300



2019


506,600



508,300



509,200



510,200



510,200



International Rooms











2021


311,200



n/a



n/a



n/a



n/a



2020


321,500



310,900



306,300



308,600



308,600



2019


305,500



308,300



312,600



320,800



320,800













































NOTE:

Amounts may not foot due to rounding. Results reflect the reclassification of rooms from the Hotel Management segment to
the Hotel Franchising segment related to the CorePoint Lodging asset sales.

 



































Table 7

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions)















The tables below reconcile certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors' understanding of the overall impact of such adjustments. We believe that adjusted EBITDA, adjusted net income and adjusted EPS financial measures provide useful information to investors about us and our financial condition and results of operations because these measures are used by our management team to evaluate our operating performance and make day-to-day operating decisions and adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. These measures also assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. These non-GAAP reconciliation tables should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.
















Reconciliation of Net Income (Loss) to Adjusted EBITDA:




First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full
Year

2021










Net income

$

24










Provision for income taxes

11










Depreciation and amortization

24










Interest expense, net

28










Stock-based compensation expense

5










Development advance notes amortization (a)

2










Separation-related expenses (b)

2










Foreign currency impact of highly inflationary countries (c)

1










Adjusted EBITDA

$

97




















2020










Net income/(loss)

$

22



$

(174)



$

27



$

(7)



$

(132)


Provision for/(benefit from) income taxes

9



(48)



15



(2)



(26)


Depreciation and amortization

25



25



24



24



98


Interest expense, net

25



28



29



30



112


Stock-based compensation expense

4



5



5



5



19


Development advance notes amortization (a)

2



2



2



2



9


Impairments, net (d)



206







206


Restructuring costs (e)

13



16





5



34


Transaction-related expenses, net (f)

8



5







12


Separation-related expenses (b)

1







1



2


Foreign currency impact of highly inflationary countries (c)





1





2


Adjusted EBITDA

$

109



$

66



$

103



$

58



$

336












2019


Net income

$

21



$

26



$

45



$

64



$

157


Provision for income taxes

5



10



21



14



50


Depreciation and amortization

29



27



26



28



109


Interest expense, net

24



26



25



25



100


Stock-based compensation expense

3



4



4



4



15


Development advance notes amortization (a)

2



2



2



2



8


Impairment, net (g)



45







45


Contract termination costs (h)



9



34



(1)



42


Restructuring costs (i)







8



8


Transaction-related expenses, net (f)

7



11



12



10



40


Separation-related expenses (b)

21



1







22


Transaction-related item (j)





20





20


Foreign currency impact of highly inflationary countries (c)

1





3



1



5


Adjusted EBITDA

$

113



$

161



$

192



$

155



$

621
































 





NOTE: Amounts may not add due to rounding.

(a) 

Represents the non-cash amortization of development advance notes, which is now excluded from adjusted EBITDA to reflect how our chief operating decision maker reviews operating performance.

(b) 

Represents costs associated with our spin-off from Wyndham Worldwide.

(c) 

Relates to the foreign currency impact from hyper-inflation in Argentina, which is reflected in operating expenses on the income statement.

(d) 

Represents a non-cash charge to reduce the carrying values of certain intangible assets to their fair values principally attributable to higher discount rates primarily resulting from increased share price volatility, partially offset by $3 million of cash proceeds from a previously impaired asset.

(e) 

Represents charges associated with restructuring initiatives implemented in response to the effects on travel demand as a result of COVID-19.

(f) 

Primarily relates to integration costs incurred in connection with our acquisition of La Quinta.

(g) 

Represents a non-cash charge associated with the termination of certain hotel-management arrangements.

(h) 

Represents costs associated with the termination of certain hotel-management arrangements.

(i)   

 Represents a charge focused on enhancing our organizational efficiency and rationalizing our operations.

(j)  

Represents the one-time fee credit related to our agreement with CorePoint Lodging, which is reflected as a reduction to hotel management revenues on the income statement.

 













Reconciliation of Adjusted EBITDA Margin:

Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net revenues excluding cost reimbursements. The calculation of adjusted EBITDA margin excludes cost reimbursement revenues, which primarily represent payroll costs for operational employees at certain of the Company's managed hotels. Although these costs are funded by hotel owners, accounting guidance requires the Company to report these costs on a gross basis as both revenues and expenses. As there are no resultant earnings from these revenues, the Company excludes these amounts from the adjusted EBITDA margin calculation.





Three Months Ended March 31,


2021


2019

Net revenues

$

303



$

468


Less: Cost reimbursements

71



155


Net revenues excluding cost reimbursements

$

232



$

313






Adjusted EBITDA (see table above)

$

97



$

113


Adjusted EBITDA margin

42%



36%


 













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 March 31,


2021


2020

Diluted EPS

$

0.26



$

0.23






Net income

$

24



$

22






Adjustments:








Separation-related expenses

2



1


Restructuring costs



13


Transaction-related expenses, net



8


Foreign currency impact of highly inflationary countries

1




Acquisition-related amortization expense (a)

9



10


Total adjustments before tax

12



32


Income tax provision (b)

3



7


Total adjustments after tax

9



25


Adjusted net income

$

33



$

47


Adjustments - EPS impact

0.10



0.27


Adjusted diluted EPS

$

0.36



$

0.50






Diluted weighted average shares outstanding

93.8



93.9






(a) 

Reflected in depreciation and amortization on the income statement.

(b) 

Reflects the estimated tax effects of the adjustments.

 



















Table 8

WYNDHAM HOTELS & RESORTS

2021 PROJECTIONS

As of April 28, 2021

(In millions)






Projections as of
April 28, 2021


Projections as of
February 10, 2021



Adjusted EBITDA sensitivity to global RevPAR change (a)

$

2.8 per point


$

2.5 per point







License fees (b)

$

70


$

70

Marketing, reservation and loyalty funds


Break even



Break even







Depreciation and amortization expense (c)

$

60 - 62


$

60 - 62

Stock-based compensation expense

$

27 - 29


$

27 - 29

Interest expense, net (d)

$

94 - 96


$

113 - 115

Adjusted tax rate


28%



28%







Capital expenditures


 Approx. $40



Approx. $40

Development advance notes


Approx. $40



Approx. $40

Free cash flow conversion rate (e)


 Approx. 50%



Approx. 50%







Diluted shares (f)


94.1



94.1







Year-over-Year Growth






Number of rooms


1% - 2%



1% - 2%


























(a) 

Excludes impacts from license fees and the marketing funds. Change from February reflects better-than-expected results at our two owned hotels and the removal of the conservatism embedded in February's estimate.

(b) 

Reflects the minimum levels outlined in the underlying agreements.

(c) 

Excludes amortization of acquisition-related intangible assets of $36 - $38 million.

(d) 

Change from February reflects the savings achieved in connection with the Company's redemption of the 5.375% senior unsecured notes. Excludes redemption premium and non-cash expenses associated with the early extinguishment of the notes.

(e) 

Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

(f) 

Excludes the impact of any share repurchases in 2021.

 

In determining adjusted EBITDA sensitivity to global RevPAR, interest expense, net, the adjusted tax rate and the free cash flow conversion rate, we exclude certain items which are otherwise included in determining the comparable GAAP financial measures. We are providing these measures on a non-GAAP basis only because, without unreasonable efforts, we are unable to predict with reasonable certainty the occurrence or amount of all the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

 

Table 9

WYNDHAM HOTELS & RESORTS

DEFINITIONS


Adjusted Net Income and Adjusted Diluted EPS: Represents net income (loss) and diluted earnings (loss) per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related) and foreign currency impacts of highly inflationary countries. We calculate 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, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), 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, our definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.


During the first quarter of 2021, we modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how our chief operating decision maker reviews operating performance beginning in 2021. We have applied the modified definition of adjusted EBITDA to all periods presented.


Adjusted Free Cash Flow: Adjusted free cash flow represents free cash flow excluding special-item cash outlays, which are related to our acquisition of La Quinta, our spin-off from Wyndham Worldwide and our agreement with CorePoint Lodging. We believe adjusted 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, to the extent permitted. This non-GAAP measure is not necessarily a representation of how we will use excess cash. A limitation of using adjusted free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Hotels is that adjusted free cash flow does not represent the total cash movement for the period as detailed in the consolidated statement of cash flows.


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


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


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


Free Cash Flow: See Table 3 for definition.


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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