Exhibit 99.1

whra21.jpg

WYNDHAM HOTELS & RESORTS REPORTS SECOND QUARTER 2020 RESULTS
PARSIPPANY, N.J., July 28, 2020 - Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended June 30, 2020. Highlights include:
Diluted loss per share was $1.86, and adjusted diluted earnings per share was $0.10.
Net loss was $174 million for the second quarter and adjusted net income was $9 million.
Adjusted EBITDA was $63 million.
System-wide rooms remained flat year-over-year.
Global comparable RevPAR declined 54% year-over-year.
Paid quarterly cash dividend of $0.08 per share.
“We generated positive adjusted EBITDA in the second quarter, driven by our drive-to and leisure-oriented franchise business model, along with our immediate and concerted cost savings initiatives," said Geoffrey A. Ballotti, president and chief executive officer. “We were pleased to see a steady improvement in Average Daily Rate, Occupancy and RevPAR over the past three months. Our select-service, small business owners are uniquely positioned to both remain open and capture emerging travel demand, whatever the shape of the recovery may be. Approximately 85% of our hotels have remained open globally throughout the pandemic, and over 99% of our domestic hotels are open today. Importantly, our economy and midscale brands continue to outperform versus their local markets. We remain committed to supporting our owners during this difficult period, while showing our guests and team members that they can "Count on Us" to put their safety first.”
Revenues declined to $258 million in the second quarter of 2020, compared with $533 million in the second quarter of 2019. The decline includes lower pass-through cost-reimbursement revenues of $94 million, which have no impact on adjusted EBITDA, in the Company's hotel management business. Excluding cost-reimbursement revenues, revenues declined $181 million reflecting a 54% decline in comparable RevPAR and the impact from hotels temporarily closed due to COVID-19.
The Company generated a net loss of $174 million, or $1.86 per diluted share, in the second quarter of 2020, reflecting $1.71 per diluted share in non-cash impairment charges related to certain intangible assets and $0.18 per diluted share in restructuring and transaction-related costs. Net income in the second quarter of 2019 was $26 million, or $0.27 per diluted share, which included a non-cash impairment charge of $0.34 per diluted share and $0.16 per diluted share in transaction-related, separation-related and contract termination expenses.  The decline in net income of $200 million, or $2.13 per diluted share, was primarily due to the impact of the non-cash impairment charges and the revenue declines, which were partially offset by lower volume-related expenses as well as cost containment initiatives, including restructuring actions. 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.


1


Business Segment Discussion
The following discussion of second quarter operating results focuses on revenue and adjusted EBITDA for each of the Company’s segments.
Hotel Franchising
 
2020

 
2019

 
% Change

System size
754,700

 
751,300

 

Global RevPAR
$
17.05

 
$
42.04

 
(59
)
 
 
 
 
 
 
Revenue (millions)
$
182

 
$
331

 
(45
)
Adjusted EBITDA (millions)
83

 
162

 
(49
)
The Company's franchised system, which included 7,500 rooms transferred from the hotel management segment related to the CorePoint Lodging asset sales, remained flat globally. Excluding the transfer, franchised net rooms declined 50 basis points globally, reflecting the Company's removal of approximately 9,000 non-compliant master franchise rooms in China.
RevPAR declined 59% globally, or 53% on a comparable basis, due to the impact of COVID-19 on travel demand. In the U.S., RevPAR declined 52%, or 49% on a comparable basis, and internationally RevPAR declined 76%, or 66% on a comparable basis.
Revenues decreased $149 million compared to second quarter 2019 reflecting the impact of COVID-19 on travel demand globally, while a decline in adjusted EBITDA of $79 million was partially mitigated by lower volume-related expenses as well as cost containment initiatives.
Hotel Management
 
2020

 
2019

 
% Change

System size
58,200
 
65,200
 
(11
)
Global RevPAR
$
20.67

 
$
66.67

 
(69
)
 
 
 
 
 
 
Revenue (millions)
$
76

 
$
201

 
(62
)
Adjusted EBITDA (millions)
(4
)
 
16

 
N/A

The Company's managed system decreased 11% globally primarily reflecting the transfer of 7,500 rooms to the hotel franchising segment as a result of CorePoint Lodging asset sales. Excluding the transfer of rooms to the hotel franchising segment, the Company's managed system grew 1%, reflecting 13% growth internationally, partially offset by a 3% decline in the U.S. primarily due to the loss of rooms that were previously covered by unprofitable hotel management guarantees.
RevPAR declined 69% globally, or 63% on a comparable basis, primarily reflecting a 68% decline in the U.S., or 63% on a comparable basis, and a 72% decline internationally, or 60% on a comparable basis.
Revenues decreased $125 million compared to the prior-year period primarily due to $94 million of lower cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, revenues declined $31 million due to the unfavorable impact of COVID-19 on travel demand globally, while adjusted


2


EBITDA declined $20 million as the RevPAR impacts were partially mitigated by lower volume-related expenses as well as cost containment initiatives.
Development
As of June 30, 2020, the Company’s hotel system of over 9,000 properties and 813,000 rooms remained flat year-over-year. During the second quarter of 2020, the Company opened 62 new hotels totaling 5,700 rooms, a year-over-year decline of 65% as new construction openings were delayed and conversion volumes were lower.
As expected, the Company's global retention rate over the last twelve months declined to 93.7% compared to 95.2% during the same period last year due to the Company's removal of approximately 9,000 non-compliant master franchise rooms in China, as previously disclosed.
The Company’s development pipeline consisted of over 1,300 hotels and approximately 180,000 rooms, a 4% year-over-year room decline, or a 5% decline sequentially, as a result of softer sales activity in the second quarter due to travel restrictions, increased hurdle rates and a more conservative probability factor applied to projects in the pipeline which have not yet secured financing. Approximately 64% of the Company’s development pipeline is international and 76% is new construction, of which 34% have broken ground.
Impairment Charge
The continued disruption to the travel industry resulting from COVID-19 prompted the Company to perform an evaluation and comparison of the carrying value of its assets to their fair value. As a result of this evaluation, the Company recorded a net impairment charge of $206 million ($159 million, net of tax) during the second quarter of 2020 primarily related to the La Quinta tradename. The future cash flows expected to be generated from the La Quinta tradename have not changed materially; rather, the impairment charge was principally attributable to a higher discount rate primarily resulting from increased share price volatility, consistent with the lodging sector and broader equity markets.
Restructuring Charge
In an effort to mitigate the revenue declines resulting from COVID-19 and to further position itself for growth during the recovery period, the Company undertook various restructuring actions that resulted in a charge of $16 million ($13 million, net of tax) during the second quarter. This charge is comprised of $11 million for severance and related benefit costs resulting from the elimination of approximately 180 positions and $5 million of lease-related costs. In combination with the Company’s first quarter COVID-19 related restructuring charge, the Company has now reduced approximately 440 positions and expects to realize $50 million to $55 million of annual savings as a result of these actions.
Cash
During the second quarter of 2020, the Company's cash balance decreased $85 million to $664 million. The impact of the Company's franchisee fee deferral program was approximately $67 million during the second quarter. In addition, the Company made $28 million of special-item cash outlays, including restructuring payments, during the second quarter.



3


Dividends
The Company paid common stock dividends of $8 million, or $0.08 per share, in the second quarter of 2020.
Outlook
The Company's ability to assess the impact of COVID-19 on its full-year financial results continues to be limited due to the uncertainty in travel demand during the remainder of 2020.
Conference Call Information
Wyndham Hotels will hold a conference call with investors to discuss the Company’s results and outlook on Wednesday, July 29, 2020 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 866 342-8591 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 for approximately 90 days beginning at noon ET on July 29, 2020. A telephone replay will be available for approximately ten days beginning at noon ET on July 29, 2020 at 800 839-5484.
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 9,000 hotels across approximately 90 countries on six continents. Through its network of 813,000 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 84 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


4


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 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 COVID-19 pandemic. 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,” “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 the COVID-19 pandemic, 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 the COVID-19 pandemic; the Company’s performance in any recovery from the COVID-19 pandemic; the performance of 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 or political strife; concerns with or threats of pandemics, contagious diseases or health epidemics, including the effects of the COVID-19 pandemic and any resurgence 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 the acquisition of La Quinta and 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 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 restrictions on share repurchases or the Company’s ability and plans to pay dividends including the timing and amount of any future 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.


5


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

Media: 
Dave DeCecco  
Group Vice President, Global Communications 
973 753-7474 
WyndhamHotelsNews@wyndham.com




6


Table 1
WYNDHAM HOTELS & RESORTS
INCOME (LOSS) STATEMENT
(In millions, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Net revenues
 
 
 
 
 
 
 
Royalties and franchise fees
$
61

 
$
126

 
$
154

 
$
228

Marketing, reservation and loyalty
82

 
140

 
188

 
254

Management and other fees
6

 
36

 
38

 
75

License and other fees
21

 
33

 
42

 
61

Cost reimbursements
66

 
160

 
192

 
315

Other
22

 
38

 
53

 
68

Net revenues
258

 
533

 
667

 
1,001

 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Marketing, reservation and loyalty
85

 
149

 
204

 
278

Operating
23

 
38

 
57

 
81

General and administrative
26

 
31

 
54

 
65

Cost reimbursements
66

 
160

 
192

 
315

Depreciation and amortization
25

 
27

 
49

 
56

Impairments, net
206

 
45

 
206

 
45

Restructuring
16

 

 
29

 

Transaction-related, net
5

 
11

 
13

 
18

Separation-related

 
1

 
1

 
22

Contract termination

 
9

 

 
9

Total expenses
452

 
471

 
805

 
889

 

 
 
 

 

Operating (loss)/income
(194
)
 
62

 
(138
)
 
112

Interest expense, net
28

 
26

 
54

 
50

 

 
 
 

 

(Loss)/income before income taxes
(222
)
 
36

 
(192
)
 
62

(Benefit)/provision for income taxes
(48
)
 
10

 
(40
)
 
15

Net (loss)/income
$
(174
)
 
$
26

 
$
(152
)
 
$
47

 
 
 
 
 
 
 
 
(Loss)/earnings per share
 
 
 
 
 
 
 
Basic
$
(1.86
)
 
$
0.27

 
$
(1.63
)
 
$
0.49

Diluted
(1.86
)
 
0.27

 
(1.63
)
 
0.49

 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
Basic
93.3

 
97.1

 
93.5

 
97.5

Diluted
93.3

 
97.4

 
93.5

 
97.8





 
Table 2
 
WYNDHAM HOTELS & RESORTS
 
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT
 
 
 
 
 
The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized on a regular basis by our chief operating decision maker to assess performance and allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA. 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 these measures internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Full Year
 
Hotel Franchising
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
 
 
 
 
2020
$
243

 
$
182

 
n/a

 
n/a

 
n/a

 
 
2019
269

 
331

 
379

 
300

 
1,279

 
 
2018
203

 
289

 
348

 
295

 
1,135

 
 
Adjusted EBITDA


 
 
 
 
 
 
 
 
 
 
2020
$
108

 
$
83

 
n/a

 
n/a

 
n/a

 
 
2019
113

 
162

 
195

 
151

 
622

 
 
2018
86

 
129

 
178

 
122

 
515

 
 
 
 
 
 
 
 
 
 
 
 
 
Hotel Management

 
 
 
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
 
 
 
 
2020
$
167

 
$
76

 
n/a

 
n/a

 
n/a

 
 
2019
197

 
201

 
180

 
190

 
768

 
 
2018
99

 
146

 
252

 
229

 
726

 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
2020
$
17

 
$
(4
)
 
n/a

 
n/a

 
n/a

 
 
2019
16

 
16

 
13

 
21

 
66

 
 
2018
16

 
8

 
5

 
18

 
47

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
 
 
 
 
2020
$

 
$

 
n/a

 
n/a

 
n/a

 
 
2019
2

 
1

 
1

 
2

 
6

 
 
2018

 

 
4

 
3

 
7

 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
2020
$
(18
)
 
$
(16
)
 
n/a

 
n/a

 
n/a

 
 
2019
(18
)
 
(19
)
 
(18
)
 
(19
)
 
(75
)
 
 
2018
(10
)
 
(12
)
 
(17
)
 
(15
)
 
(55
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
 
 
 
 
 
 
 
 
 
 
 
Net revenues
 
 
 
 
 
 
 
 
 
 
 
2020
$
410

 
$
258

 
n/a

 
n/a

 
n/a

 
 
2019
468

 
533

 
560

 
492

 
2,053

 
 
2018
302

 
435

 
604

 
527

 
1,868

 
 
Net income/(loss)
 
 
 
 
 
 
 
 
 
 
 
2020
$
22

 
$
(174
)
 
n/a

 
n/a

 
n/a

 
 
2019
21

 
26

 
45

 
64

 
157

 
 
2018
39

 
21

 
58

 
43

 
162

 
 
Adjusted EBITDA


 


 


 


 


 
 
2020
$
107

 
$
63

 
n/a

 
n/a

 
n/a

 
 
2019
111

 
159

 
190

 
153

 
613

 
 
2018
92

 
125

 
166

 
125

 
507

 
NOTE: Amounts may not add across due to rounding.
See Table 7 for definitions and Table 8 for reconciliations of Total Company non-GAAP measures.



Table 3
WYNDHAM HOTELS & RESORTS
CASH FLOWS
(In millions)
(Unaudited)
 
 
 
 
 
Six Months Ended June 30,
 
2020
 
2019
Operating activities
 
 
 
Net (loss)/income
$
(152
)
 
$
47

Depreciation and amortization
49

 
56

Impairment (a)
209

 
45

Payment of tax liability assumed in La Quinta acquisition

 
(188
)
Other, net
(146
)
 
(97
)
Net cash used in operating activities
(40
)
 
(137
)
Investing activities
 
 
 
Property and equipment additions
(18
)
 
(25
)
Issuance of loans, net
(1
)
 
(2
)
Net cash used in investing activities
(19
)
 
(27
)
Financing activities
 
 
 
Proceeds from borrowings
744

 

Principal payments on long-term debt
(18
)
 
(8
)
Capital contribution from former Parent

 
68

Dividends to shareholders
(38
)
 
(56
)
Repurchases of common stock
(50
)
 
(95
)
Other, net
(8
)
 
(5
)
Net cash provided by/(used in) financing activities
630

 
(96
)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
(1
)
 
1

Net increase/(decrease) in cash, cash equivalents and restricted cash
570

 
(259
)
Cash, cash equivalents and restricted cash, beginning of period
94

 
366

Cash, cash equivalents and restricted cash, end of period
$
664

 
$
107

 
 
 
 
Free Cash Flow:
 
 
 
We define free cash flow to be net cash provided by/(used in) 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. 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/(used in) 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.
 
 
 
Six Months Ended June 30,
 
2020
 
2019
Net cash used in operating activities (b)
$
(40
)
 
$
(137
)
Less: Property and equipment additions
(18
)
 
(25
)
Free cash flow
$
(58
)
 
$
(162
)
 
(a) 
2020 excludes $3 million of cash proceeds from a previously impaired asset.
(b) 
Includes special-item cash outlays of $48 million and $45 million in 2020 and 2019, respectively, primarily relating to transaction-related and separation-related cash payments, as well as our restructuring initiatives. Additionally, 2020 includes an estimated impact of $67 million from the Company's franchisee fee deferral program and 2019 includes $188 million of payments to tax authorities related to the La Quinta acquisition.







Table 4
WYNDHAM HOTELS & RESORTS
DEBT
(In millions)
(Unaudited)
 
 
 
 
 
As of
June 30, 2020
 
As of
December 31, 2019
 
 
$750 million revolving credit facility (due May 2023)
$
734

 
$

Term loan (due May 2025)
1,561

 
1,568

5.375% senior unsecured notes (due April 2026)
495

 
494

Finance leases
57

 
60

Total debt
2,847

 
2,122

Cash and cash equivalents
664

 
94

Net debt
$
2,183

 
$
2,028

 

 

Our outstanding debt as of June 30, 2020 matures as follows:
 
 
 
 
 
 
Amount
Within 1 year
 
 
$
21

Between 1 and 2 years
 
 
21

Between 2 and 3 years
 
 
755

Between 3 and 4 years
 
 
22

Between 4 and 5 years

 
1,503

Thereafter
 
 
525

Total

 
$
2,847






Table 5
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
2020
 
2019
 
Change
 
% Change
 
 
Beginning Room Count (January 1)
 
 
 
 


 

 
 
United States
510,200

 
506,100

 
4,100

 
   1%
 
 
International
320,800

 
303,800

 
17,000

 
6
 
 
Total
831,000

 
809,900

 
21,100

 
3
 
 
 
 
 
 
 


 

 
 
Additions
 
 
 
 


 

 
 
United States
5,400

 
13,400

 
(8,000
)
 
(60)
 
 
International
6,500

 
14,400

 
(7,900
)
 
(55)
 
 
Total
11,900

 
27,800

 
(15,900
)
 
(57)
 
 
 
 
 
 
 


 

 
 
Deletions
   

 
 
 


 

 
 
United States
(13,600
)
 
(11,200
)
 
(2,400
)
 
(21)
 
 
International
(16,400
)
 
(9,900
)
 
(6,500
)
 
(66)
 
 
Total
(30,000
)
 
(21,100
)
 
(8,900
)
 
(42)
 
 
 
 
 
 
 
 
 
 
 
 
Ending Room Count (June 30)
   

 
 
 
 
 
 
 
 
United States
502,000

 
508,300

 
(6,300
)
 
(1)
 
 
International
310,900

 
308,300

 
2,600

 
1
 
 
Total
812,900

 
816,600

 
(3,700
)
 
—%
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30,
 
FY 2019 Royalty Contribution
 
2020
 
2019
 
Change
 
% Change
 
System Size
 
 
 
 
 
 
 
 
 
United States
 
 
 
 

 
 
 
 
Economy
254,300

 
263,300

 
(9,000
)
 
   (3%)
 
 
Midscale and Upper Midscale
206,800

 
205,800

 
1,000

 
 
 
Extended Stay/Lifestyle
24,200

 
20,800

 
3,400

 
16
 
 
Upscale
16,700

 
18,400

 
(1,700
)
 
(9)
 
 
Total United States
502,000

 
508,300

 
(6,300
)
 
(1)
 
   86%
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 


 

 
 
Greater China
144,300

 
149,300

 
(5,000
)
 
(3)
 
3
Rest of Asia Pacific
27,800

 
24,500

 
3,300

 
13
 
1
Europe, the Middle East and Africa
69,000

 
66,500

 
2,500

 
4
 
4
Canada
40,600

 
39,900

 
700

 
2
 
5
Latin America
29,200

 
28,100

 
1,100

 
4
 
1
Total International
310,900

 
308,300

 
2,600

 
1
 
14
 
 
 
 
 
 
 
 
 
 
Global
812,900

 
816,600

 
(3,700
)
 
—%
 
  100%




Table 5 (continued)
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
 
2020
 
2019
 
% Change
 
Constant Currency %
  Change (a)
 
 
Regional RevPAR Growth
 
 
 
 
 
 
 
 
 
United States
 
 
 
 
 
 
 
 
 
Economy
$
23.00

 
$
41.16

 
(44%)
 
 
 
 
Midscale and Upper Midscale
23.85

 
56.62

 
(58)
 
 
 
 
Extended Stay/Lifestyle
21.46

 
73.90

 
(71)
 
 
 
 
Upscale
19.75

 
111.45

 
(82)
 
 
 
 
Total United States
$
23.19

 
$
50.98

 
(55)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
 
 
Greater China
$
8.42

 
$
18.74

 
(55)
 
(53%)
 
 
Rest of Asia Pacific
8.43

 
34.13

 
(75)
 
(74)
 
 
Europe, the Middle East and Africa
5.37

 
53.21

 
(90)
 
(90)
 
 
Canada
13.71

 
46.51

 
(71)
 
(70)
 
 
Latin America
2.71

 
34.07

 
(92)
 
(90)
 
 
Total International
$
7.96

 
$
32.47

 
(75)
 
(75)
 
 
 
 
 
 
 
 
 
 
 
 
Global
$
17.31

 
$
44.06

 
(61%)
 
(60%)
 
 
 
 
 
 
 
 
 
 
 
 
Average Royalty Rate
 
 
 
 
 
 
 
 
 
United States
4.6
%
 
4.5
%
 
10 bps
 
 
 
 
International
2.4
%
 
2.0
%
 
40 bps
 
 
 
 
Global
4.2
%
 
3.8
%
 
40 bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
2020
 
2019
 
% Change
 
Constant Currency %
  Change (a)
 
 
Regional RevPAR Growth
 
 
 
 
 
 
 
 
 
United States
 
 
 
 
 
 
 
 
 
Economy
$
24.88

 
$
36.36

 
(32%)
 
 
 
 
Midscale and Upper Midscale
30.65

 
51.77

 
(41)
 
 
 
 
Extended Stay/Lifestyle
33.99

 
66.22

 
(49)
 
 
 
 
Upscale
47.49

 
101.72

 
(53)
 
 
 
 
Total United States
$
28.33

 
$
45.83

 
(38)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
 
 
Greater China
$
6.88

 
$
18.17

 
(62)
 
(61%)
 
 
Rest of Asia Pacific
17.50

 
35.71

 
(51)
 
(49)
 
 
Europe, the Middle East and Africa
19.69

 
49.50

 
(60)
 
(59)
 
 
Canada
21.39

 
40.41

 
(47)
 
(46)
 
 
Latin America
15.89

 
34.33

 
(54)
 
(46)
 
 
Total International
$
13.20

 
$
30.71

 
(57)
 
(55)
 
 
 
 
 
 
 
 
 
 
 
 
Global
$
22.50

 
$
40.17

 
(44%)
 
(43%)
 
 
 
 
 
 
 
 
 
 
 
 
Average Royalty Rate
 
 
 
 
 
 
 
 
 
United States
4.6
%
 
4.5
%
 
10 bps
 
 
 
 
International
2.3
%
 
2.0
%
 
30 bps
 
 
 
 
Global
4.1
%
 
3.8
%
 
30 bps
 
 
 
 
 
(a)
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
 
 
 
 
 
 
 
 
 
 
2020
 
$
25.90

 
$
17.05

 
n/a

 
n/a

 
n/a

 
2019
 
$
33.76

 
$
42.04

 
$
45.23

 
$
34.51

 
$
38.91

 
2018
 
$
32.34

 
$
41.07

 
$
46.34

 
$
35.39

 
$
38.86

 
U.S. RevPAR
 
 
 
 
 
 
 
 
 
 
 
2020
 
$
31.43

 
$
23.19

 
n/a

 
n/a

 
n/a

 
2019
 
$
37.69

 
$
48.65

 
$
51.93

 
$
37.96

 
$
44.09

 
2018
 
$
34.20

 
$
46.17

 
$
52.36

 
$
38.92

 
$
43.04

 
International RevPAR
 
 
 
 
 
 
 
 
 
2020
 
$
17.39

 
$
7.66

 
n/a

 
n/a

 
n/a

 
2019
 
$
27.56

 
$
31.59

 
$
34.79

 
$
29.15

 
$
30.80

 
2018
 
$
29.39

 
$
32.85

 
$
36.42

 
$
29.68

 
$
32.09

 
Global Rooms (a)
 
 
 
 
 
 
 
 
 
 
2020
 
769,000

 
754,700

 
n/a

 
n/a

 
n/a

 
2019
 
745,300

 
751,300

 
758,400

 
770,200

 
770,200

 
2018
 
697,300

 
725,700

 
731,200

 
742,800

 
742,800

 
U.S. Rooms (a)
 
 
 
 
 
 
 
 
 
 
 
2020
 
463,900

 
460,200

 
n/a

 
n/a

 
n/a

 
2019
 
454,900

 
457,600

 
460,100

 
464,600

 
464,600

 
2018
 
424,500

 
450,900

 
451,100

 
453,900

 
453,900

 
International Rooms (a)
 
 
 
 
 
 
 
 
 
2020
 
305,100

 
294,500

 
n/a

 
n/a

 
n/a

 
2019
 
290,400

 
293,700

 
298,300

 
305,600

 
305,600

 
2018
 
272,800

 
274,700

 
280,100

 
288,900

 
288,900

 
 
 
 
 
 
 
 
 
 
 
 
Hotel Management
 
 
 
 
 
 
 
 
 
 
Global RevPAR
 
 
 
 
 
 
 
 
 
 
2020
 
$
50.00

 
$
20.67

 
n/a

 
n/a

 
n/a

 
2019
 
$
63.25

 
$
66.67

 
$
66.65

 
$
59.19

 
$
64.01

 
2018
 
$
77.61

 
$
76.52

 
$
68.53

 
$
61.00

 
$
68.72

 
U.S. RevPAR
 
 
 
 
 
 
 
 
 
 
 
2020
 
$
54.35

 
$
23.21

 
n/a

 
n/a

 
n/a

 
2019
 
$
65.58

 
$
71.61

 
$
70.75

 
$
60.89

 
$
67.32

 
2018
 
$
94.28

 
$
87.43

 
$
71.95

 
$
61.43

 
$
72.76

 
International RevPAR
 
 
 
 
 
 
 
 
 
2020
 
$
38.07

 
$
13.78

 
n/a

 
n/a

 
n/a

 
2019
 
$
55.12

 
$
49.53

 
$
52.49

 
$
53.67

 
$
52.69

 
2018
 
$
61.82

 
$
55.08

 
$
55.19

 
$
59.36

 
$
57.84

 
Global Rooms (b)
 
 
 
 
 
 
 
 
 
 
2020
 
59,300

 
58,200

 
n/a

 
n/a

 
n/a

 
2019
 
66,800

 
65,200

 
63,400

 
60,800

 
60,800

 
2018
 
25,700

 
66,700

 
67,000

 
67,200

 
67,200

 
U.S. Rooms (b)
 
 
 
 
 
 
 
 
 
 
 
2020
 
42,900

 
41,800

 
n/a

 
n/a

 
n/a

 
2019
 
51,700

 
50,700

 
49,100

 
45,600

 
45,600

 
2018
 
12,800

 
53,400

 
53,300

 
52,200

 
52,200

 
International Rooms
 
 
 
 
 
 
 
 
 
2020
 
16,400

 
16,400

 
n/a

 
n/a

 
n/a

 
2019
 
15,100

 
14,500

 
14,300

 
15,200

 
15,200

 
2018
 
12,900

 
13,300

 
13,700

 
15,000

 
15,000




Table 6 (continued)
WYNDHAM HOTELS & RESORTS
HISTORICAL REVPAR AND ROOMS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Full Year
Total System
 
 
 
 
 
 
 
 
 
 
 
Global RevPAR
 
 
 
 
 
 
 
 
 
 
2020
 
$
27.68

 
$
17.31

 
n/a

 
n/a

 
n/a

 
2019
 
$
36.21

 
$
44.06

 
$
46.94

 
$
36.36

 
$
40.92

 
2018
 
$
33.95

 
$
42.95

 
$
48.21

 
$
37.54

 
$
40.80

 
U.S. RevPAR
 
 
 
 
 
 
 
 
 
 
 
2020
 
$
33.45

 
$
23.19

 
n/a

 
n/a

 
n/a

 
2019
 
$
40.56

 
$
50.98

 
$
53.79

 
$
40.09

 
$
46.39

 
2018
 
$
35.91

 
$
48.50

 
$
54.42

 
$
41.28

 
$
45.30

 
International RevPAR
 
 
 
 
 
 
 
 
 
2020
 
$
18.45

 
$
7.96

 
n/a

 
n/a

 
n/a

 
2019
 
$
28.92

 
$
32.47

 
$
35.63

 
$
30.29

 
$
31.85

 
2018
 
$
30.90

 
$
33.89

 
$
37.31

 
$
31.08

 
$
33.31

 
Global Rooms
 
 
 
 
 
 
 
 
 
 
2020
 
828,300

 
812,900

 
n/a

 
n/a

 
n/a

 
2019
 
812,100

 
816,600

 
821,800

 
831,000

 
831,000

 
2018
 
723,000

 
792,300

 
798,300

 
809,900

 
809,900

 
U.S. Rooms
 
 
 
 
 
 
 
 
 
 
 
2020
 
506,800

 
502,000

 
n/a

 
n/a

 
n/a

 
2019
 
506,600

 
508,300

 
509,200

 
510,200

 
510,200

 
2018
 
437,200

 
504,300

 
504,500

 
506,100

 
506,100

 
International Rooms
 
 
 
 
 
 
 
 
 
 
2020
 
321,500

 
310,900

 
n/a

 
n/a

 
n/a

 
2019
 
305,500

 
308,300

 
312,600

 
320,800

 
320,800

 
2018
 
285,800

 
288,000

 
293,800

 
303,800

 
303,800

 
NOTE: Amounts may not foot due to rounding. Beginning with the second quarter of 2018, results reflect the reclassification of
rooms from the Hotel Management segment to the Hotel Franchising segment related to the CorePoint Lodging asset sales.
(a)
Second quarter 2018 reflects the addition of 48,200 La Quinta rooms (46,300 U.S. and 1,900 international) acquired in May 2018 and the deletion of 21,300 Knights Inn rooms (20,100 U.S. and 1,200 international) divested in May 2018.
(b)
Second quarter 2018 reflects the addition of 40,400 La Quinta rooms in the U.S. acquired in May 2018.







Table 7
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 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 and income taxes. 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.
Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.
Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.
Comparable RevPAR: Represents RevPAR in constant currency and excluding hotels temporarily closed due to COVID-19 for the period closed and the comparable prior-year period. The use of the term "comparable" herein in connection with RevPAR refers to the defined term Comparable RevPAR.
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).
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.



Table 8
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
2020
 
 
 
 
 
 
 
 
 
Net income/(loss)
$
22

 
$
(174
)
 
 
 
 
 
 
Provision/(benefit) for income taxes
9

 
(48
)
 
 
 
 
 
 
Depreciation and amortization
25

 
25

 
 
 
 
 
 
Interest expense, net
25

 
28

 
 
 
 
 
 
Stock-based compensation expense
4

 
5

 
 
 
 
 
 
Impairments, net (a)

 
206

 
 
 
 
 
 
Restructuring costs (b)
13

 
16

 
 
 
 
 
 
Transaction-related expenses, net (c)
8

 
5

 
 
 
 
 
 
Separation-related expenses (d)
1

 

 
 
 
 
 
 
Adjusted EBITDA
$
107

 
$
63

 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
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

Impairment, net (e)

 
45

 

 

 
45

Contract termination costs (f)

 
9

 
34

 
(1
)
 
42

Restructuring costs (g)

 

 

 
8

 
8

Transaction-related expenses, net (c)
7

 
11

 
12

 
10

 
40

Separation-related expenses (d)
21

 
1

 

 

 
22

Transaction-related item (h)

 

 
20

 

 
20

Foreign currency impact of highly inflationary countries (i)
1

 

 
3

 
1

 
5

Adjusted EBITDA
$
111

 
$
159

 
$
190

 
$
153

 
$
613

 
 
 
 
 
 
 
 
 
 
2018
 
Net income
$
39

 
$
21

 
$
58

 
$
43

 
$
162

Provision for income taxes
16

 
8

 
23

 
14

 
61

Depreciation and amortization
19

 
22

 
30

 
29

 
99

Interest expense, net
1

 
10

 
24

 
25

 
60

Stock-based compensation expense
3

 
1

 
3

 
2

 
9

Transaction-related expenses, net (c)
2

 
28

 
7

 
(1
)
 
36

Separation-related expenses (d)
12

 
35

 
17

 
14

 
77

Foreign currency impact of highly inflationary countries (i)

 

 
4

 
(1
)
 
3

Adjusted EBITDA
$
92

 
$
125

 
$
166

 
$
125

 
$
507

 
NOTE: Amounts may not add across due to rounding.



(a)
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.
(b)
Represents charges associated with restructuring initiatives implemented in response to the effects on travel demand as a result of COVID-19.
(c)
Primarily relates to integration costs incurred in connection with our acquisition of La Quinta.
(d)
Represents costs associated with our spin-off from Wyndham Worldwide.
(e)
Represents a non-cash charge associated with the termination of certain hotel-management arrangements.
(f)
Represents costs associated with the termination of certain hotel-management arrangements.
(g)
Represents a charge focused on enhancing our organizational efficiency and rationalizing our operations.
(h) 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.
(i)
Relates to the foreign currency impact from hyper-inflation in Argentina, which is reflected in operating expenses on the income statement.

 





Table 8 (continued)
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions, except per share data)
 
 
 
 
 
 
 
 
Reconciliation of Net Income (Loss) and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS:
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Diluted EPS
$
(1.86
)
 
$
0.27

 
$
(1.63
)
 
$
0.49

 
 
 
 
 
 
 
 
Net (loss)/income
$
(174
)
 
$
26

 
$
(152
)
 
$
47

 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
Impairments, net
206

 
45

 
206

 
45

Restructuring costs
16

 

 
29

 

Transaction-related expenses, net
5

 
11

 
13

 
18

Separation-related expenses

 
1

 
1

 
22

Contract termination costs

 
9

 

 
9

Foreign currency impact of highly inflationary countries

 

 
1

 
1

Acquisition-related amortization expense (a)
9

 
10

 
19

 
19

Total adjustments before tax
236

 
76

 
269

 
114

Income tax provision (b)
53

 
20

 
61

 
28

Total adjustments after tax
183

 
56

 
208

 
86

Adjusted net income
$
9

 
$
82

 
$
56

 
$
133

Adjustments - EPS impact
1.96

 
0.57

 
2.22

 
0.87

Adjusted diluted EPS
$
0.10

 
$
0.84

 
$
0.59

 
$
1.36

 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
93.3

 
97.4

 
93.6

 
97.8

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