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:
- 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
|
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|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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
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|
|
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.
|
|
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|
|
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
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|
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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SOURCE Wyndham Hotels & Resorts