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WYNDHAM HOTELS & RESORTS REPORTS STRONG FOURTH QUARTER AND FULL-YEAR 2021 RESULTS

February 15, 2022
Exceeds Top End of Full-Year Outlook and Reports Largest Pipeline in Company's History
Company Provides Full-Year 2022 Outlook
Board Increases Share Repurchase Authorization by $400 Million

PARSIPPANY, N.J., Feb. 15, 2022 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months and year ended December 31, 2021. Highlights include:

  • U.S. RevPAR for the quarter exceeded 2019 levels by 9%, growing 58% versus 2020.
  • System-wide rooms grew 180 basis points year-over-year, including 70 basis points of growth in the U.S. and 350 basis points of growth internationally.
  • Diluted earnings per share for the quarter of $0.52 and net income of $48 million; diluted EPS for the full-year of $2.60 and net income of $244 million.
  • Adjusted diluted earnings per share of $0.69 for the quarter and adjusted net income of $64 million; adjusted earnings per share for the full-year of $3.16 and adjusted net income of $297 million.
  • Adjusted EBITDA of $131 million for the quarter and $590 million for the full-year.
  • Net cash provided by operating activities for the full-year of $426 million and free cash flow of $389 million.
  • Returned over $190 million to shareholders for the full-year through share repurchases and dividends.

"With a 9% U.S. RevPAR increase and another 340 basis points of domestic market-share gains versus 2019 - we were very pleased with our performance this quarter as each month saw stronger growth than the month prior," said Geoffrey A. Ballotti, president and chief executive officer. "New COVID variants did not impact our domestic, drive-to leisure travel business and consumer demand portends a very busy Spring Break for our franchisees. We enter 2022 with strong occupancy trends in the U.S., our largest ever development pipeline and a multitude of new technology services and marketing programs to enhance our franchisees' top and bottom lines. In addition, our Board authorized a quarterly dividend of $0.32 per share and increased our share repurchase authorization, which reflects the ongoing strength of the business and our strong free cash flow."

Fourth Quarter 2021 Operating Results

Fee-related and other revenues increased 43% to $314 million primarily reflecting strong ADR growth in the U.S., which drove fourth quarter U.S. RevPAR 9% above 2019 levels.

The Company generated net income of $48 million, or $0.52 per diluted share, an increase of $55 million, or $0.60 per diluted share, reflecting an increase in adjusted EBITDA and lower net interest expense. Adjusted EBITDA for the quarter was $131 million, an increase of 126% versus 2020. The increase of $73 million reflects the increase in fee-related and other revenues and lower excess marketing spend, partially offset by higher volume-related expenses due to the ongoing recovery in travel demand.

During the fourth quarter 2021, the Company's marketing fund expenses exceeded revenues by $8 million; while in fourth quarter 2020, the Company's marketing fund expenses exceeded revenues by $26 million.

Full reconciliations of GAAP results to the Company's non-GAAP adjusted measures for all reported periods appear in the tables to this press release.

System Size



December 31,
2021


QTD Change
(bps)


YOY Change
(bps)

United States


490,600


80


70

International


319,500


120


350

Global


810,100


90


180

The Company's global system grew 180 basis points, reflecting 70 basis points of growth in the U.S. and 350 basis points of growth internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 5% and 15%, respectively. Fourth quarter room openings recovered to 97% of 2019 levels globally reflecting a 21% increase in domestic additions. The Company also achieved its goal of a 95% retention rate for the full year 2021.

RevPAR



Fourth Quarter
2021


YOY Constant
Currency %
Change


Constant Currency
% Change
vs. 2019

United States


$

43.84



58

%


9

%

International


23.99



40



(19)


Global


35.99



52




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, constant currency basis) are more meaningful when evaluating trends. On this basis, fourth quarter RevPAR in the U.S. exceeded 2019 levels by 9% while international RevPAR declined 19%. Global RevPAR recovered to 100% of 2019 levels. The 9% increase in the U.S. is primarily due to pricing power where average daily rate exceeded 2019 levels by 8%. The 19% international decline demonstrates sequential progress from a 25% decline in third quarter.

Fourth Quarter 2021 Business Segment Discussion


Revenue


Adjusted EBITDA


Fourth
Quarter 2021


Fourth
Quarter 2020


% Change


Fourth
Quarter 2021


Fourth
Quarter 2020


% Change

Hotel Franchising

$

270



$

202



34

%


$

128



$

77



66

%

Hotel Management

122



94



30



19



(1)



n/a


Corporate and Other







(16)



(18)



11


Total Company

$

392



$

296



32



$

131



$

58



126


Hotel Franchising revenues increased 34% year-over-year to $270 million primarily due to the global RevPAR increase. Hotel Franchising adjusted EBITDA increased 66% to $128 million reflecting the growth in revenues and lower excess marketing spend, partially offset by higher volume-related expenses.

Hotel Management revenues increased 30% year-over-year to $122 million, including a $2 million increase in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues increased $26 million, or 144%, to $44 million primarily due to the global RevPAR increase, as well as improved performance at the Company's owned hotels. Hotel Management adjusted EBITDA increased $20 million year-over-year reflecting the revenue increases, partially offset by higher volume-related expenses.

Full-Year 2021 Operating Results

Fee-related and other revenues increased 31% to $1,245 million primarily reflecting the recovery in travel demand and its impact on global RevPAR, as well as 2% growth in the Company's global system size. Global RevPAR recovered to 88% of 2019 levels on a constant currency basis, including domestic RevPAR at 97% of 2019 levels.

The Company generated net income of $244 million, or $2.60 per diluted share, compared to net loss of $132 million, or $1.42 loss per diluted share, for the full-year 2020. Adjusted EBITDA for the full-year was $590 million, an increase of 76% versus 2020. The increase of $254 million in adjusted EBITDA primarily reflects the increase in fee-related and other revenues and marketing fund favorability, partially offset by higher volume-related expenses due to the recovery in travel demand throughout the year. The increase of $376 million, or $4.02 per diluted share, in net income reflects a further decline in after-tax special-item charges and lower net interest expense.

During full-year 2021, the Company's marketing fund revenues exceeded expenses by $18 million; while in full-year 2020, the Company's marketing fund expenses exceeded revenues by $49 million.

Development

The Company awarded 655 new contracts this year. On December 31, 2021, the Company's global development pipeline consisted of over 1,500 hotels and over 194,000 rooms, the highest level on record. The pipeline grew 5% year-over-year, including 3% domestically and 6% internationally. Approximately 65% of the Company's development pipeline is international and 79% is new construction, of which approximately 35% has broken ground. Over 80% of the global development pipeline is in the midscale and above segments, including over 70% in the U.S.

Cash and Liquidity

The Company generated $426 million of net cash provided by operating activities in the full-year 2021, compared to $67 million in 2020 and $100 million in 2019. The Company generated $389 million of free cash flow in the full-year 2021, which includes a benefit from the collection of prior year receivables that were outsized due to COVID deferrals.

At December 31, 2021, the Company had $171 million of cash on its balance sheet and over $900 million in total liquidity. The Company's net debt leverage ratio was 3.2 times at December 31, 2021, within the Company's 3 to 4 times stated target range, compared to 3.3 times at December 31, 2019.

Share Repurchases and Dividends

During the fourth quarter of 2021, the Company repurchased approximately 994,000 shares of its common stock for $83 million at an average price of $83.42 per share. For the full-year 2021, the Company repurchased approximately 1.4 million shares of its common stock for $110 million at an average price of $80.60 per share. The Company's Board of Directors recently increased the Company's share repurchase authorization by $400 million.

The Company paid common stock dividends of $29 million, or $0.32 per share, in the fourth quarter of 2021 for a total of $82 million, or $0.88 per share, for the full-year 2021. The Company's Board of Directors recently authorized a quarterly cash dividend of $0.32 per share of common stock beginning with the dividend that is expected to be declared in the first quarter of 2022.

Potential Sale of Owned Hotels

During the fourth quarter of 2021, the Company decided to pursue the sale of its two owned hotels. As of December 31, 2021, the assets and liabilities of these owned hotels were reported in assets held for sale and liabilities held for sale on the Consolidated Balance Sheet. As a result of the plan to sell these owned hotels, in the fourth quarter of 2021, the Company recorded a non-cash impairment charge of $6 million to reflect the expected value upon potential sale.

Full-Year 2022 Outlook

The Company provided the following outlook for full-year 2022:

  • Net rooms growth of 2% to 4%.
  • RevPAR growth of 12% to 16% versus 2021, which is consistent with 2019 levels.
  • Fee-related and other revenues of $1.34 billion to $1.37 billion, a year-over-year increase of 8% to 10%.
  • Adjusted EBITDA of $605 million to $625 million, which is consistent with 2019 levels, and reflects a year-over-year increase of 3% to 6%.
  • Adjusted net income of $308 million to $320 million, which is consistent with 2019 levels, and reflects a year-over-year increase of 4% to 8%.
  • Adjusted diluted EPS of $3.28 to $3.40, based on a diluted share count of 93.9 million that excludes any share repurchases after December 31, 2021. Reflects growth up to 4% compared to 2019, and a year-over-year increase of 4% to 8%.
  • Free cash flow conversion from adjusted EBITDA of approximately 55%.

The Company views its growth in adjusted EBITDA compared to 2021 and 2019 as follows (in millions):



2022
Outlook (a)


2021


2019


Growth
vs. 2021


Growth
vs. 2019

Total Company (b)


$

605 - 625


$

590


$

621





CorePoint (c)



~5



25



28





License fees (d)



~80



70



113





Marketing funds



~10



18



(1)





Core business


$

510 - 530


$

477


$

481


7 - 11%


6 - 10%







(a) 

Does not include any impact from the planned sale of the Company's two owned hotels.

(b) 

Net income was $244 million and $157 million for the years ended December 31, 2021 and 2019, respectively. Reconciliation can be found in the Table 7.

(c)

In 2022, the expected termination payment of $84 million will be fully offset by the non-cash write-off of the related management contract intangible asset, as previously communicated. In 2021, includes (i) the effects of CorePoint's prior asset dispositions, including $2 million of operational EBITDA and $19 million of termination fees and (ii) $4 million of operational EBITDA generated from assets yet to be sold. In 2019, includes (i) the effects of CorePoint's prior asset dispositions, including $12 million of operational EBITDA and $7 million of termination fees and (ii) $9 million of operational EBITDA generated from assets yet to be sold.

(d)

Primarily represents license fees paid by Travel + Leisure, the recovery of which is correlated to the recovery of vacation ownership sales at Travel + Leisure. This projection is based on internal estimates and will be updated as appropriate when Travel + Leisure provides an estimated vacation ownership interest sales projection for 2022.

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 Wednesday, February 16, 2022 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 866 831-8713 and providing the passcode "Wyndham". Listeners are urged to call at least five minutes prior to the scheduled start time. An archive of this webcast will be available on the website beginning at noon ET on February 16, 2022. A telephone replay will be available for approximately ten days beginning at noon ET on February 16, 2022 at 800 723-0479.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing operating performance. The Company uses these measures internally to assess its operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Exclusion of items in the Company's non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of this press release.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,000 hotels across approximately 95 countries on six continents. Through its network of over 810,000 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 22 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 over 92 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 the Company's current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures, share repurchases and dividends, 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 the Company makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions; the continuation or worsening of the effects from COVID-19, its scope, duration, resurgence and impact on the Company's business operations, financial results, cash flows and liquidity, as well as the impact on the Company's franchisees 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 during the recovery from COVID-19 and any resurgence or mutations of the virus; various actions governments, businesses and individuals continue to take in response to the pandemic, including stay-in-place directives (including, for instance, quarantine and isolation guidelines and mandates), safety mitigation guidance, as well as the timing, availability and adoption rates of vaccinations, booster shots and other treatments for COVID-19; concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising and management businesses; the Company's relationships with franchisees and property owners; the impact of war, terrorist activity, political instability or political strife; risks related to restructuring or strategic initiatives; risks related to the Company's relationship with CorePoint Lodging, Inc. ("CorePoint") and the Company's relationship with Highgate Holdings, Inc. and certain of its affiliates or subsidiaries following the closing of CorePoint's sale; the Company's ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to the Company's ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company's ability to make or pay, plans for, and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

Contacts



Investors:

Media: 


Matt Capuzzi

Maire Griffin


Senior Vice President, Investor Relations

Senior Vice President, Global Communications


973 753-6453

973 753-6590


ir@wyndham.com  

WyndhamHotelsNews@wyndham.com


 

Table 1

WYNDHAM HOTELS & RESORTS

INCOME/(LOSS) STATEMENT

(In millions, except per share data)

(Unaudited)










Three Months Ended December 31,


Year Ended December 31,


2021


2020


2021


2020

Net revenues








Royalties and franchise fees

$

117



$

78



$

461



$

328


Marketing, reservation and loyalty

115



82



468



370


Management and other fees

35



14



117



64


License and other fees

19



20



79



84


Other

28



26



120



104


Fee-related and other revenues

314



220



1,245



950


Cost reimbursements

78



76



320



350


Net revenues

392



296



1,565



1,300










Expenses








Marketing, reservation and loyalty

123



108



450



419


Operating

39



27



132



109


General and administrative

32



34



113



116


Cost reimbursements

78



76



320



350


Depreciation and amortization

25



24



95



98


Impairments, net

6





6



206


Separation-related



1



3



2


Restructuring



5





34


Transaction-related, net







12


Total expenses

303



275



1,119



1,346










Operating income/(loss)

89



21



446



(46)


Interest expense, net

22



30



93



112


Early extinguishment of debt





18












Income/(loss) before income taxes

67



(9)



335



(158)


Provision for/(benefit from) income taxes

19



(2)



91



(26)


Net income/(loss)

$

48



$

(7)



$

244



$

(132)










Earnings/(loss) per share








Basic

$

0.52



$

(0.08)



$

2.61



$

(1.42)


Diluted

0.52



(0.08)



2.60



(1.42)










Weighted average shares outstanding








Basic

93.0



93.3



93.4



93.4


Diluted

93.7



93.3



93.9



93.4


 

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



$

283



$

337



$

270



$

1,099



2020

243



182



236



202



863



2019

269



331



379



300



1,279



Adjusted EBITDA  (a)











2021

$

105



$

166



$

193



$

128



$

592



2020

110



86



119



77



392



2019

115



164



197



153



629













Hotel Management











Net revenues











2021

$

94



$

123



$

126



$

122



$

466



2020

167



76



101



94



437



2019

197



201



180



190



768



Adjusted EBITDA











2021

$

5



$

16



$

16



$

19



$

57



2020

17



(4)



2



(1)



13



2019

16



16



13



21



66













Corporate and Other











Net revenues











2021

$



$



$



$



$



2020











2019

2



1



1



2



6



Adjusted EBITDA











2021

$

(13)



$

(14)



$

(15)



$

(16)



$

(59)



2020

(18)



(16)



(18)



(18)



(69)



2019

(18)



(19)



(18)



(19)



(74)













Total Company











Net revenues











2021

$

303



$

406



$

463



$

392



$

1,565



2020

410



258



337



296



1,300



2019

468



533



560



492



2,053



Net income/(loss)











2021

$

24



$

68



$

103



$

48



$

244



2020

22



(174)



27



(7)



(132)



2019

21



26



45



64



157



Adjusted EBITDA  (a)











2021

$

97



$

168



$

194



$

131



$

590



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)






Year Ended December 31,


2021


2020

Operating activities




   Net income/(loss)

$

244



$

(132)


   Depreciation and amortization

95



98


    Impairments (a)

6



209


   Deferred income taxes

(1)



(23)


   Trade receivables

25



(38)


   Accounts payable, accrued expenses and other current liabilities

39



(46)


   Deferred revenues

16



(54)


   Payments of development advance notes, net

(30)



(16)


   Other, net

32



69


Net cash provided by operating activities

426



67


Investing activities




   Property and equipment additions

(37)



(33)


   Other, net

3



2


Net cash used in investing activities

(34)



(31)


Financing activities




   Proceeds from/(payments of) long-term debt, net

(529)



484


   Dividends to shareholders

(82)



(53)


   Repurchases of common stock

(107)



(50)


   Other, net

5



(18)


Net cash (used in)/provided by financing activities

(713)



363


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

(1)




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

(322)



399


Cash, cash equivalents and restricted cash, beginning of period

493



94


Cash, cash equivalents and restricted cash, end of period

$

171



$

493



Free Cash Flow:

We define free cash flow to be net cash provided by operating activities less property and equipment additions, which we also refer to as capital expenditures. We believe free cash flow to be a useful operating performance measure to us and investors to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions and investments, as well as our ability to return cash to shareholders through dividends and share repurchases. Free cash flow is not necessarily a representation of how we will use excess cash. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Hotels is that free cash flow does not represent the total cash movement for the period as detailed in the condensed consolidated statement of cash flows.



Three Months
Ended
December 31,


Year Ended
December 31,


2021


2020


2021


2020

Net cash provided by operating activities (b)

$

99


$

10


$

426


$

67

Less: Property and equipment additions

(14)


(10)


(37)


(33)

Free cash flow

$

85


$


$

389


$

34







(a) 

2020 excludes $3 million of cash proceeds from a previously impaired asset.

(b) 

Included in the three months and year ended December 31, 2020 are $8 million and $66 million, respectively, of payments in connection with our restructuring initiatives, our acquisition of La Quinta and our spin-off from Wyndham Worldwide.

 

Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)






As of
December 31, 2021


As of
December 31, 2020

Assets




Cash and cash equivalents

$

171



$

493


Trade receivables, net

246



295


Assets held for sale

154




Property and equipment, net

106



278


Goodwill and intangible assets, net

3,200



3,240


Other current and non-current assets

392



338


Total assets

$

4,269



$

4,644






Liabilities and stockholders' equity




Total debt

$

2,084



$

2,597


Other current liabilities

376



325


Deferred income tax liabilities

366



359


Other non-current liabilities

354



400


Total liabilities

3,180



3,681


Total stockholders' equity

1,089



963


Total liabilities and stockholders' equity

$

4,269



$

4,644






Our outstanding debt was as follows:





As of
December 31, 2021


As of
December 31, 2020



$750 million revolving credit facility (due May 2023)

$



$


Term loan (due May 2025)

1,541



1,554


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



496


4.375% senior unsecured notes (due August 2028)

493



492


Finance leases

50



55


   Total debt

2,084



2,597


Cash and cash equivalents

171



493


   Net debt

$

1,913



$

2,104








(a) 

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



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







Amount

Within 1 year



$

21


Between 1 and 2 years



21


Between 2 and 3 years



22


Between 3 and 4 years



1,499


Between 4 and 5 years



7


Thereafter



514


   Total



$

2,084


 

Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS












Year Ended December 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

25,900


13,600


12,300


90



   International

27,200


22,000


5,200


24



     Global

53,100


35,600


17,500


49













Deletions (a)










   United States

(22,600)


(36,500)


13,900


38



   International

(16,300)


(34,200)


17,900


52



     Global

(38,900)


(70,700)


31,800


45













Ending Room Count (December 31)










   United States

490,600


487,300


3,300


1



   International

319,500


308,600


10,900


4



     Global

810,100


795,900


14,200


2%














As of December 31,


FY 2019
Royalty
Contribution
(b)


2021


2020


Change


% Change



System Size










United States










   Economy

243,100


250,700


(7,600)


(3%)



   Midscale and Upper Midscale

228,900


220,700


8,200


4



   Upscale and Above

18,600


15,900


2,700


17



Total United States

490,600


487,300


3,300


1%


86%











International










   Greater China 

153,800


144,500


9,300


6%


3

   Rest of Asia Pacific

29,000


27,800


1,200


4


1

   Europe, the Middle East and Africa

66,100


66,200


(100)



4

   Canada

39,200


40,700


(1,500)


(4)


5

   Latin America

31,400


29,400


2,000


7


1

Total International

319,500


308,600


10,900


4%


14











Global

810,100


795,900


14,200


2%


100%







(a) 

2020 includes the termination of approximately 26,700 rooms including 14,000 master-franchisee rooms in Greater China, 8,200 rooms in the U.S. and 4,500 unprofitable rooms in Europe, the Middle East and Africa and the rest of Asia Pacific in connection with the Company's previously announced strategic termination plan.

(b)  

FY 2019 provided to illustrate pre-pandemic results.

 

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS








Three Months
Ended
December 31, 2021


Constant Currency 

% Change (a)


Two-Year

Basis
% Change (b)

Regional RevPAR Growth






United States






   Economy

$

37.63



47%


19%

   Midscale and Upper Midscale

48.23



62


5

   Upscale and Above

79.53



120


(16)

Total United States

$

43.84



58%


9%







International






   Greater China

$

15.39



(15%)


(23%)

   Rest of Asia Pacific

22.55



15


(44)

   Europe, the Middle East and Africa

36.38



140


(16)

   Canada

35.71



62


(9)

   Latin America

26.17



156


(4)

Total International

$

23.99



40%


(19%)







Global

$

35.99



52%


—%








Three Months Ended
December 31,




2021


2020


% Change

Average Royalty Rate






United States

4.6%


4.5%


10 bps

International

2.1%


1.8%


30 bps

Global

4.0%


3.8%


20 bps








Year Ended
December 31, 2021


Constant Currency

% Change (a)


Two-Year
Basis

% Change (b)

Regional RevPAR Growth






United States






   Economy

$

39.79



46%


6%

   Midscale and Upper Midscale

49.36



51


(7)

   Upscale and Above

74.01



71


(27)

Total United States

$

45.19



50%


(3%)







International






   Greater China

$

16.06



37%


(18%)

   Rest of Asia Pacific

21.30



11


(46)

   Europe, the Middle East and Africa

27.39



45


(43)

   Canada

34.22



32


(28)

   Latin America

18.15



55


(33)

Total International

$

21.52



36%


(33%)







Global

$

35.95



46%


(12%)








Year Ended
December 31,




2021


2020


%
Change

Average Royalty Rate






United States

4.6%


4.5%


10 bps

International

2.1%


2.1%


Global

4.1%


4.0%


10 bps







(a)  

International 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



$

35.69



$

44.67



$

34.77



$

34.85



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



$

46.99



$

56.38



$

42.45



$

43.95



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



$

18.21



$

26.62



$

23.13



$

20.86



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



752,500



758,600



769,400



769,400



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



454,200



458,000



465,100



465,100



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



298,300



300,600



304,300



304,300



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



$

56.08



$

64.63



$

57.57



$

53.81



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



$

67.42



$

78.27



$

66.77



$

63.20



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



$

31.20



$

37.53



$

40.96



$

34.31



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



45,500



44,000



40,700



40,700



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



30,600



28,800



25,500



25,500



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



14,900



15,200



15,200



15,200



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



$

36.92



$

45.80



$

35.99



$

35.95



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



$

48.37



$

57.73



$

43.84



$

45.19



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



$

18.84



$

27.15



$

23.99



$

21.52



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



798,000



802,600



810,100



810,100



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



484,800



486,800



490,600



490,600



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



313,200



315,800



319,500



319,500



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



$

68



$

103



$

48



$

244


Provision for income taxes

11



25



36



19



91


Depreciation and amortization

24



24



23



25



95


Interest expense, net

28



22



22



22



93


Early extinguishment of debt (a)



18







18


Stock-based compensation expense

5



8



7



8



28


Development advance notes amortization (b)

2



2



3



3



11


Impairments, net (c)







6



6


Separation-related expenses (d)

2



1







3


Foreign currency impact of highly inflationary countries (e)

1









1


Adjusted EBITDA

$

97



$

168



$

194



$

131



$

590












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 (b)

2



2



2



2



9


Impairments, net (c)



206







206


Restructuring costs (f)

13



16





5



34


Transaction-related expenses, net (g)

8



5







12


Separation-related expenses (d)

1







1



2


Foreign currency impact of highly inflationary countries (e)





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 (b)

2



2



2



2



8


Impairment, net (h)



45







45


Contract termination costs (i)



9



34



(1)



42


Restructuring costs (j)







8



8


Transaction-related expenses, net (g)

7



11



12



10



40


Separation-related expenses (d)

21



1







22


Transaction-related item (k)





20





20


Foreign currency impact of highly inflationary countries (e)

1





3



1



5


Adjusted EBITDA

$

113



$

161



$

192



$

155



$

621








NOTE: Amounts may not add due to rounding.

(a) 

Relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes. These expenses were recorded in interest expense, net on the Company's income/(loss) statement.

(b) 

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

(c) 

2021 represents a non-cash charge to reduce the carrying values of the Company's owned hotels long-lived assets to their fair value in connection with the Company's Board approval of a plan to sell these assets in 2022. 2020 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.

(d) 

Represents costs associated with the Company's spin-off from Wyndham Worldwide.

(e) 

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

(f) 

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

(g) 

Primarily relates to integration costs incurred in connection with the Company's acquisition of La Quinta.

(h) 

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

(i) 

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

(j) 

Represents a charge related to enhancing the Company's organizational efficiency and rationalizing our operations.

(k) 

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

 

Table 7 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions, except per share data)









Reconciliation of Net Income/(Loss) and Diluted Earnings/(Loss) Per Share to Adjusted Net Income and Adjusted Diluted EPS:








Three Months Ended
December 31,


Year Ended
December 31,


2021


2020


2021


2020

Diluted earnings/(loss) per share

$

0.52



$

(0.08)



$

2.60



$

(1.42)










Net income/(loss)

$

48



$

(7)



$

244



$

(132)










Adjustments:








Early extinguishment of debt (a)





18




Acquisition-related amortization expense (b)

11



9



38



37


Impairments, net

6





6



206


Separation-related expenses



1



3



2


Foreign currency impact of highly inflationary countries





1



2


Restructuring costs



5





34


Transaction-related expenses, net







12










Total adjustments before tax

17



15



66



293


Income tax provision (c)

1



1



13



65


Total adjustments after tax

16



14



53



228


Adjusted net income

$

64



$

7



$

297



$

96


Adjustments - EPS impact

0.17



0.15



0.56



2.45


Adjusted diluted EPS

$

0.69



$

0.07



$

3.16



$

1.03










Diluted weighted average shares outstanding

93.7



93.6



93.9



93.5








(a) 

Relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes. These expenses were recorded in interest expense, net on the Company's income/(loss) statement.

(b) 

Reflected in depreciation and amortization on the income/(loss) statement.

(c) 

Reflects the estimated tax effects of the adjustments. Fourth quarter 2021 amount was reduced by $3 million primarily due to the lack of a tax benefit on the Company's non-cash impairment charge. Fourth quarter 2020 amount was reduced by $3 million due to changes in state effective tax rates.

 

Table 8

WYNDHAM HOTELS & RESORTS

2022 OUTLOOK

As of February 15, 2022

(In millions, except per share data)











2022 Outlook


2021


2019

Fee-related and other revenues

$

1,340 - 1,370


$

1,245


$

1,430

Adjusted EBITDA (a)(b)


605 - 625



590



621

Depreciation and amortization expense (c)


58 - 60



57



72

Development advance notes amortization expense


12 - 14



11



8

Stock-based compensation expense


36 - 38



28



15

Interest expense, net


81 - 83



93



100

Adjusted income before income taxes


414 - 432



401



426

Income tax expense (d)


106 - 112



104



109

Adjusted net income (a)

$

308 - 320


$

297


$

317










Adjusted diluted EPS

$

3.28 - 3.40


$

3.16


$

3.28










Diluted shares (e)


93.9



93.9



96.6










Marketing, reservation and loyalty funds


 Approx. $10


$

18


$

(1)










Capital expenditures


 Approx. $45


$

37


$

50

Development advance notes


Approx. $55


$

32


$

19










Free cash flow conversion rate (f)


 Approx. 55%



66%



8%










Year-over-Year Growth









Global RevPAR (g)


12% - 16%



47%



0%

Number of rooms


2% - 4%



2%



3%








(a) 

Net income for full-year 2021 and 2019 was $244 million and $157 million, respectively. Please see Table 7 for reconciliation.

(b)

Does not include any impact from the Company's planned sale of its owned hotels.

(c)

Excludes amortization of acquisition-related intangible assets of $32 - $34 million.

(d) 

Outlook assumes an effective tax rate of approximately 26%.

(e) 

Excludes the impact of any share repurchases after December 31, 2021.

(f) 

Represents the percentage of adjusted EBITDA that is expected to produce free cash flow. Free cash flow plus capital expenditures equals net cash from operating activities. Net cash provided by operating activities was $426 million and $100 million during 2021 and 2019, respectively.

(g) 

Outlook represents global RevPAR consistent with 2019 levels.

 

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

 

Table 9

WYNDHAM HOTELS & RESORTS

DEFINITIONS


Adjusted Net Income and Adjusted Diluted EPS: Represents net income/(loss) and diluted earnings/(loss) per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related) and foreign currency impacts of highly inflationary countries. The Company calculates the income tax effect of the adjustments using an estimated effective tax rate applicable to each adjustment.


Adjusted EBITDA: Represents net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, 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, the Company's definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.


During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company's chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.


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.


Net Debt Leverage Ratio: Calculated by dividing total debt less cash and cash equivalents by trailing twelve months adjusted EBITDA.


Number of Rooms: Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements or Company-owned and (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.


RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR.


Royalty Rate: Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.

 

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SOURCE Wyndham Hotels & Resorts

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