$ millions

2018

2017

% Change

Revenue

$

289

$

233

24%

Adjusted EBITDA

129

111

16%

$ millions

2018

2017

% Change

Revenue

$

146

$

98

49%

Adjusted EBITDA

8

4

100%

Table 1

WYNDHAM HOTELS & RESORTS

SUMMARY DATA SHEET

($ in millions, except per share and RevPAR data)

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

Change

2018

Change

Income Statement and Other Items

  Net revenues

$

435

$

331

31%

$

737

$

620

19%

  Income before income taxes

29

82

(65%)

85

136

(38%)

  Net income

21

48

(56%)

61

81

(25%)

  Earnings per share - diluted

$

0.21

$

0.48

(56%)

$

0.61

$

0.81

(25%)

  Adjusted Earnings Metrics (non-GAAP)

  Adjusted EBITDA

$

125

$

105

19%

$

217

$

183

19%

  Adjusted pretax income

98

86

14%

172

146

18%

  Adjusted net income

73

51

43%

127

87

46%

  Adjusted earnings per share - diluted

$

0.73

$

0.51

43%

$

1.27

$

0.87

46%

Segment Results

Net Revenues

  Hotel Franchising

$

289

$

233

24%

$

491

$

424

16%

  Hotel Management

146

98

49%

246

196

26%

Total Reportable Segments

435

331

31%

737

620

19%

  Corporate and Other

-

-

-

-

Total Company

$

435

$

331

31%

$

737

$

620

19%

Adjusted EBITDA

  Hotel Franchising

$

129

$

111

16%

$

214

$

189

13%

  Hotel Management

8

4

100%

24

14

71%

Total Reportable Segments

137

115

19%

238

203

17%

  Corporate and Other

(12)

(10)

NM

(21)

(20)

NM

Total Company

$

125

$

105

19%

$

217

$

183

19%

Key Operating Statistics

Total Company^(a)

  Number of properties

8,976

8,140

10%

8,976

8,140

10%

  Number of rooms

792,300

705,700

12%

792,300

705,700

12%

  RevPAR^(b)

$

42.95

$

39.43

9%

$

38.54

$

35.61

8%

  Average royalty rate

3.76%

3.70%

6 bps

3.69%

3.70%

(1) bps

United States^(c)

  Number of properties

6,311

5,496

15%

6,311

5,496

15%

  Number of rooms

504,300

425,800

18%

504,300

425,800

18%

  RevPAR

$

48.50

$

44.53

9%

$

42.39

$

39.28

8%

  Average royalty rate

4.50%

4.41%

9 bps

4.48%

4.43%

5 bps

As of 

June 30, 2018 

Balance Sheet Items

Cash^(d)

$

416

Debt

2,145

Shareholders' equity

1,436

^(a) 2018 metrics include the impact of the La Quinta acquisition as well as the Knights Inn divestiture. Excluding these transactions, number of properties grew 4%, number of rooms
    grew 3%, RevPAR grew 5% and 6%, and average royalty rate was unchanged and decreased 7 bps for the three and six months ended June 30, 2018, respectively.

^(b) Amounts reflect currency exchange movements. Excluding such movements, the impact of the La Quinta acquisition and the Knights Inn divestiture, RevPAR increased 4% and 4%
     for the three and six months ended June 30, 2018, respectively.

^(c) 2018 metrics include the impact of the La Quinta acquisition as well as the Knights Inn divestiture. Excluding these transactions, number of properties grew 5%, number of rooms 3%,
    RevPAR grew 4% and 5%, and average royalty rate increased 6 bps and was unchanged for the three and six months ended June 30, 2018, respectively.

^(d) Includes $240 million of cash which is expected to be paid in the third quarter of 2018 to tax authorities and/or CorePoint Lodging Inc. related to the La Quinta acquisition.

See Table 5 for definitions and reconciliations of non-GAAP measures.

See our website (www.investor.wyndhamhotels.com) for further information related to drivers and operating statistics.

Table 2

WYNDHAM HOTELS & RESORTS

INCOME STATEMENT

(In millions, except per share data)

(Unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

2018

2017

2018

2017

Net revenues

Royalties and franchise fees

$

113

$

95

$

194

$

170

Marketing, reservation and loyalty

124

96

208

173

Hotel management

28

27

58

56

License and other fees 

25

20

43

36

Cost reimbursements

114

69

180

136

Other

31

24

54

49

Net revenues

435

331

737

620

Expenses

Marketing, reservation and loyalty

124

93

208

174

Operating

47

43

87

88

General and administrative

26

23

49

44

Cost reimbursements

114

69

180

136

Depreciation and amortization

22

19

41

37

Transaction-related, net

28

-

30

-

Separation-related

35

-

46

-

Restructuring

-

-

-

1

Total expenses

396

247

641

480

Operating income

39

84

96

140

Interest expense, net

10

2

11

4

Income before income taxes

29

82

85

136

Provision for income taxes

8

34

24

55

Net income 

$

21

$

48

$

61

$

81

Earnings per share

Basic

$

0.21

$

0.48

$

0.61

$

0.81

Diluted

0.21

0.48

0.61

0.81

Weighted average shares outstanding

Basic

99.9

99.8

99.8

99.8

Diluted

100.0

99.8

99.8

99.8

Table 3

WYNDHAM HOTELS & RESORTS

CASH FLOWS

(In millions)

Six Months Ended June 30,

2018

2017

Net cash provided by operating activities

$

33

$

80

Net cash used in investing activities

(1,672)

(18)

Net cash provided by (used in) financing activities

1,996

(56)

Effect of changes in exchange rates on cash and cash equivalents

-

(1)

Net increase in cash and cash equivalents

$

357

$

5

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:

Six Months Ended June 30,

2018

2017

Net cash provided by operating activities ^(a)

$

33

$

80

Less: Property and equipment additions ^(b)

(33)

(17)

Free cash flow

$

-

$

63

^(a) Includes $87 million of transaction-related and separation-related cash outlays in the six months ended June 30,
     2018.

^(b) Includes $13 million of capital expenditures in the six months ended June 30, 2018 at the Company's owned
     hotel in Puerto Rico, which are being reimbursed by insurance proceeds that are not considered a component
     of free cash flow.

We believe free cash flow to be a useful operating performance measure 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, development advances and equity investments, as well as our ability to return cash to shareholders through dividends and share repurchases. A limitation of using free cash flow versus the GAAP measures of net cash provided by operating activities, net cash used in investing activities and net cash provided by financing 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 consolidated statement of cash flows.

Table 4

WYNDHAM HOTELS & RESORTS

SYSTEM SIZE

Six Months Ended June 30,

2018

2017

Beginning Room Count (January 1)

United States

440,100

429,000

International

288,100

268,600

Total

728,200

697,600

Additions ^(a)

United States

97,400

9,100

International

13,700

17,200

Total

111,100

26,300

Deletions ^(b)

United States

(33,200)

(12,300)

International

(13,800)

(5,900)

Total

(47,000)

(18,200)

Ending Room Count (June 30) ^(c)

United States

504,300

425,800

International

288,000

279,900

Total

792,300

705,700

^(a) Includes 88,900 rooms (86,900 U.S. and 2,000 international) added in connection with the acquisition of La Quinta
     in May 2018.

^(b) Includes 21,300 rooms (20,100 U.S. and 1,200 international) deleted in connection with the divestiture of Knights Inn
     in May 2018.

^(c) 2017 includes 22,100 Knights Inn rooms (20,900 U.S. and 1,200 international).

Table 5

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS AND DEFINITIONS

(In millions)

We believe that Adjusted EBITDA provides useful information to investors about us and our financial condition and results of operations because Adjusted EBITDA is among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions and because 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.

Reconciliation of Net Income to Adjusted EBITDA:

 Three Months Ended June 30, 

 Six Months Ended June 30, 

2018

2017

2018

2017

Net income

$

21

$

48

$

61

$

81

Provision for income taxes

8

34

24

55

Depreciation and amortization

22

19

41

37

Interest expense, net

10

2

11

4

Stock-based compensation expense

1

2

4

5

Transaction-related costs

28

-

30

-

Separation-related costs

35

-

46

-

Restructuring costs

-

-

-

1

Adjusted EBITDA

$

125

$

105

$

217

$

183

Definitions

Adjusted EBITDA: Represents net income excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related costs (acquisition-, disposition-, or separation-related), stock-based compensation expense, early extinguishment of debt costs 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 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.

Adjusted earnings measures: Adjusted net income and adjusted diluted earnings per share exclude amortization of acquisition-related intangible assets, impairment charges, restructuring and related charges, contract termination costs, transaction-related (acquisition-, disposition-, or separation-related) costs and early extinguishment of debt costs.

Further Adjusted earnings measures: Represents adjusted earnings measures presented as if our spin-off and the acquisition and integration of La Quinta had occurred on January 1, 2018.

Number of Rooms: Represents the number of rooms at hotel group properties 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 the Company receives 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.

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

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

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS AND DEFINITIONS

(In millions, except per share data)

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.  In addition to GAAP financial measures, the Company provides adjusted net income and adjusted EPS financial measures to 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.  This non-GAAP reconciliation table 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 and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS:

Location on Consolidated Statements of Income

Three Months Ended June 30, 

Six Months Ended June 30, 

2018

2017

2018

2017

Diluted EPS

$

0.21

$

0.48

$

0.61

$

0.81

Net income

$

21

$

48

$

61

$

81

Adjustments:

Transaction-related costs  ^(a)

Transaction-related

28

-

30

-

Separation-related costs^(b)

Separation-related

35

-

46

-

Restructuring costs^(c)

Restructuring

-

-

-

1

Acquisition-related amortization expense

Depreciation and amortization

6

5

11

9

Total adjustments before tax

69

5

87

10

Income tax provision

Provision for income taxes

17

2

21

4

Total adjustments after tax

52

3

66

6

Adjusted net income

$

73

$

51

$

127

$

87

Adjustments - EPS impact

0.52

0.03

0.66

0.06

Adjusted diluted EPS

$

0.73

$

0.51

$

1.27

$

0.87

Diluted weighted average shares outstanding

100.0

99.8

99.8

99.8

Note: Amounts may not add due to rounding.

^(a) Primarily relates to costs incurred in connection with the Company's acquisition of La Quinta offset by a gain on divestiture of $23 million associated with the
     divestiture of the Knights Inn brand.

^(b) Represents costs associated with our spin-off from Wyndham Worldwide.

^(c) Relates to expenses associated with restructuring initiatives primarily focused on realigning our brand operations.

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS AND DEFINITIONS

(In millions, except per share data)

Reconciliation of Adjusted Net Income and Diluted EPS to Further Adjusted Net Income and Diluted EPS*:

Three Months Ended June 30, 

Six Months
Ended June 30, 

2018

2018

Adjusted diluted EPS

$

0.73

$

1.27

Adjusted net income

$

73

$

127

Plus: Further Adjustments

Contribution from La Quinta^(a)

17

38

Not-yet-realized La Quinta synergies^(b)

14

30

Separation adjustments ^(c)

7

14

Corporate costs ^(d)

(4)

(9)

Depreciation expense ^(e)

(1)

(3)

Interest expense ^(f)

(14)

(37)

Total adjustments before tax

19

33

Income tax provision

5

9

Total adjustments after tax

14

24

Further Adjusted net income

$

87

$

151

Adjustments - EPS impact

0.14

0.24

Further Adjusted diluted EPS

$

0.86

$

1.50

Diluted weighted average shares outstanding

100.0

99.8

Adjustment to reflect full dilution 

0.6

0.8

Adjusted diluted weighted average shares outstanding

100.6

100.6

Further Adjusted metrics assume that the Company's spin-off from Wyndham Worldwide and the Company's acquisition and integration of La Quinta occurred on January 1, 2018.  Such metrics reflect incremental license fees from Wyndham Destinations, incremental costs to be incurred in connection with becoming a separate publicly traded company and expected synergies in connection with the acquisition of La Quinta.  We believe this metric provides useful information to investors. These metrics are not intended to be presented in accordance with Article 11 of Regulation S-X.  

Note: Amounts may not add due to rounding.

^(a)

Represents results for the period prior to our acquisition.

^(b)

Represents full run-rate of expected synergies less actual synergies realized (or expected to be realized) in 2018.

^(c)

Represents incremental license fees and other separation adjustments for the period prior to the spin-off.

^(d)

Represents the difference between corporate costs incurred and those expected to be incurred following the spin-off and transition period.

^(e)

Represents depreciation expense associated with acquired assets and assets transferred to the Company in connection with the spin-off.

^(f)

Represents incremental interest expense on our debt for the period prior to the spin-off.

Table 6

WYNDHAM HOTELS & RESORTS

2018 OUTLOOK

As of August 1, 2018

(In millions, except per share data)

2017 Actual ^(a)

2018 Outlook 

Further Adjusted 2018 Outlook^(b)

Revenues 

$

1,280

$

 1,740 - 1,790 

$

 1,990 - 2,040 

Adjusted EBITDA 

383

 497 - 513 

 590 - 610 

Depreciation and amortization expense ^(c)

56

 64 - 69 

 65 - 70 

Stock-based compensation expense

11

 8 - 10 

 19 - 23 

Interest expense, net

6

  63 - 67 

 94 - 98 

Adjusted pretax income

310

 355 - 370 

 410 - 430 

Income tax expense ^(d)

124

 95 - 100 

 110 - 115 

Adjusted net income 

$

186

$

 260 - 270 

$

 300 - 320 

Diluted earnings per share

$

 2.58 - 2.68 

$

 2.98 - 3.18 

Diluted shares

100.6

100.6

2017 Actual ^(a)

2018 Outlook^(b)

Year-over-Year Growth^(e)

Global RevPAR

3%

7% - 8%

Global RevPAR (excluding 2018 acquisitions

          and divestitures)

Approx. 3%

Number of rooms

4%

11% - 13%

Number of rooms (excluding 2018 acquisitions 

          and divestitures)

2% - 4%

Reconciliation of Adjusted EBITDA to Further Adjusted EBITDA

2018

Outlook^(b)

First Quarter 

Second Quarter 

Third Quarter        

Fourth Quarter

Full-Year

Adjusted EBITDA 

$

92

$

125

$

 155 - 163 

$

 125 - 133 

$

 497 - 513 

Plus: Further Adjustments

Pre-acqusition contribution from La Quinta ^(f)

21

17

-

-

38

Not-yet-realized La Quinta synergies ^(g)

16

14

 8 - 10 

7 - 9 

 45 - 49 

Separation adjustments ^(h)

7

7

-

-

14

Corporate costs ⁽ⁱ⁾

(5)

(4)

3

2

(4)

Further Adjusted EBITDA ^*

$

131

$

159

$

 166 - 176 

$

$

 590 - 610 

* Further Adjusted metrics provided in the 2018 Outlook column assume that the Company's spin-off from Wyndham Worldwide and the Company's acquisition and integration of La Quinta occurred on 
  January 1, 2018.  Such metrics reflect incremental license fees from Wyndham Destinations, incremental costs to be incurred in connection with becoming a separate publicly traded company and 
  expected synergies in connection with the acquisition of La Quinta.  We believe this metric provides useful information to investors. These metrics are not intended to be presented in accordance with 
  Article 11 of Regulation S-X.  

^(a) Restated to reflect the required change in revenue accounting.

^(b) Outlook assumes the Company's spin-off from Wyndham Worldwide and its acquisition and integration of La Quinta all occurred on January 1, 2018.  Outlook is calculated on a constant-currency
    basis.

^(c) Excludes amortization of acquisition-related intangible assets.

^(d) Assumes an effective tax rate of approximately 27%.

^(e) A glossary of terms is included in Table 5.

^(f) Represents results for the period prior to our acquisition.

^(g) Represents full run-rate of expected synergies less actual synergies realized (or expected to be realized) in 2018.

^(h) Represents incremental license fees and other separation adjustments for the period prior to the spin-off.

⁽ⁱ⁾ Represents the difference between corporate costs incurred and those expected to be incurred following the spin-off and transition period.