Wyndham Hotels & Resorts Reports Third Quarter 2023 Results

Wyndham Hotels & Resorts (NYSE: WH) yesterday announced results for the three months ended September 30, 2023. Highlights include:

Global RevPAR grew 3% compared to third quarter 2022 in constant currency.
System-wide rooms grew 3% year-over-year.
Development pipeline grew 4% sequentially and 12% year-over-year to a record 237,000 rooms.
Signed over 230 contracts, an increase of 8% year-over-year, including 60 new construction projects for ECHO Suites Extended Stay by Wyndham.
Returned $134 million to shareholders through $105 million of share repurchases and a quarterly cash dividend of $0.35 per share.

"We recently announced our Board of Directors unanimously rejected an unsolicited stock-and-cash proposal by Choice Hotels to acquire our company. Our Board of Directors, together with our financial and legal advisors, closely reviewed Choice's latest proposal and determined, for multiple reasons, that it is not in the best interest of our shareholders. They remain confident that our standalone growth prospects offer superior, risk-adjusted returns to Wyndham shareholders," said Geoff Ballotti, president and chief executive officer. "Supporting that belief are our third quarter results, which were highlighted by continued growth in global RevPAR, ongoing domestic and international organic net room growth and another 8% increase in hotel contracts awarded to franchisees driving our development pipeline to a record 1,930 hotels. Our economy brands gained market share domestically amidst a backdrop of normalizing U.S. leisure demand, and international occupancy continued to recover. Adjusted EBITDA grew in line with our expectations, we generated strong free cash flow and we returned significant capital to our shareholders. We remain focused on our growth strategy, which includes continued system expansion through our ECHO Suites by Wyndham brand and further improvements in franchisee retention, as well as the multi-year benefit expected from the U.S. infrastructure bill. We're enthusiastic about our ability to deliver exceptional value to our shareholders, guests, franchisees and team members in the months and years ahead."

Third Quarter Financial Results

Fee-related and other revenues was $400 million compared to $375 million in third quarter 2022 reflecting global RevPAR and net room growth, higher license and ancillary fees as well as the pass-through revenues associated with the Company's global franchisee conference in September, which was held for the first time since 2019.

The Company generated net income of $103 million, or $1.21 per diluted share, compared to $101 million, or $1.13 per diluted share, in third quarter 2022. The increase was reflective of higher adjusted EBITDA in the Company's hotel franchising segment and a lower effective tax rate, partially offset by higher interest expense. Adjusted diluted EPS grew 8% reflecting higher net income and a lower share count due to share repurchase activity. Adjusted EBITDA increased 5% to $200 million primarily reflecting higher fee-related and other revenues as well as marketing fund variability. During third quarter 2023, the Company's marketing fund revenues exceeded expenses by $17 million; while in third quarter 2022, the Company's marketing fund revenues exceeded expenses by $12 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

	Rooms
	September 30, 2023	September 30, 2022	YOY Change (bps)
United States	495,700	492,900	60
International	362,300	343,100	560
Global	858,000	836,000	260

The Company's global system grew 3%, reflecting 1% growth in the U.S. and 6% 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 4% and 16%, respectively.

RevPAR

	Third Quarter 2023	YOY Constant Currency % Change
United States	$ 58.46	(1 %)
International	38.05	16
Global	49.71	3

Third quarter global RevPAR grew by 3% in constant currency compared to 2022 reflecting a 1% decline in the U.S. and growth of 16% internationally. The Company had achieved record-breaking RevPAR in the U.S. during the preceding year due to COVID-impacted travel patterns. The Company's U.S. economy brands gained market share of 100 basis points in the third quarter. Comparing to 2019 to neutralize for COVID-impacted travel patterns, U.S. RevPAR grew 9%, a 30 basis point acceleration from second quarter 2023 growth. International RevPAR growth was driven by higher occupancy levels and stronger pricing power in connection with COVID recovery, and compared to 2019 grew 45% on a constant-currency basis, a 120 basis point acceleration from second quarter 2023 growth.

Development

On September 30, 2023, the Company's global development pipeline consisted of over 1,930 hotels and approximately 237,000 rooms, representing a 12% year-over-year increase, including 16% growth in the U.S.
Approximately 69% of the Company's pipeline is in the midscale and above segments.
Approximately 58% of the Company's development pipeline is international.
Approximately 80% of the Company's pipeline is new construction, of which approximately 34% has broken ground.
During third quarter 2023, the Company awarded 172 new contracts for its legacy brands, an increase of 4% year-over-year. Additionally, the Company awarded 60 additional new contracts for its ECHO Suites Extended Stay by Wyndham brand and, as of September 30, 2023, the total number of contracts awarded for the brand was 265, or nearly 33,000 rooms.

Balance Sheet and Liquidity

As of September 30, 2023, the Company had $2.2 billion of long-term debt outstanding with a weighted average interest rate of 4.9%. The Company borrowed $110 million on its revolving credit facility during the third quarter and had an available borrowing capacity of $631 million after considering $9 million of outstanding letters of credit as of September 30, 2023. The Company ended the quarter with a cash balance of $79 million and approximately $710 million in total liquidity.

The Company generated net cash provided by operating activities of $77 million and free cash flow of $67 million in third quarter 2023.

The Company has pay-fixed/receive-variable interest rate swaps in place to hedge $600 million of the Term Loan B Facility, set to expire in the second quarter of 2024. During the third quarter of 2023, the Company executed $600 million of new forward starting interest rate swaps on the Term Loan B Facility, which will begin in second quarter 2024 and expire in 2028. The fixed rate of the new swaps is 3.8%.

Share Repurchases and Dividends

During the third quarter, the Company repurchased approximately 1.4 million shares of its common stock for $105 million. Year-to-date through September 30, the Company repurchased approximately 3.8 million shares of its common stock for $270 million.

The Company paid common stock dividends of $29 million, or $0.35 per share.

Rejection of Unsolicited Offer

On October 17, 2023, the Company announced that its Board of Directors unanimously rejected a highly conditional, unsolicited stock-and-cash proposal by Choice Hotels International, Inc. ("Choice") to acquire all outstanding shares of Wyndham. Wyndham's Board of Directors, together with its financial and legal advisors, closely reviewed Choice's latest proposal with a nominal value of $90 per share, comprised of 45% in stock and 55% in cash, and determined that it is not in the best interest of Wyndham shareholders to accept the proposal.

Full-Year 2023 Outlook

The Company is updating its outlook as follows to reflect the impact of third quarter share repurchase activity:

	Updated Outlook	Prior Outlook
Year-over-year rooms growth	2 - 4%	2 - 4%
Year-over-year global RevPAR growth^(a)(b)	4 - 6%	4 - 6%
Fee-related and other revenues^(b)	$1.38 - $1.41 billion	$1.38 - $1.41 billion
Adjusted EBITDA	$654 - $664 million	$654 - $664 million
Adjusted net income	$336 - $348 million	$336 - $348 million
Adjusted diluted EPS	$3.94 - $4.08	$3.92 - $4.06
Free cash flow conversion rate^(c)	50 - 55%	50 - 55%

_________________________
^(a)	Outlook represents global RevPAR growth of approximately 6% - 8% compared to 2019.
^(b)	Lower end of the range.
^(c)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

Year-over-year growth rates are not comparable due to the sale of the Company's owned hotels and the exit of its select-service management business, both of which occurred during 2022, as well as the variability in its marketing funds due to the support that the Company provided to its owners during 2020.

The Company's expectations for full-year 2023 marketing funds contribution to adjusted EBITDA is unchanged at $10 million. The Company expects fund revenues will outpace fund expenses by approximately $11 million during the fourth quarter.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 858,000 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 24 hotel brands, including Super 8, Days Inn, Ramada, Microtel, La Quinta, Baymont, Wingate, AmericInn, Hawthorn Suites, Trademark Collection and Wyndham.

Table 1
WYNDHAM HOTELS & RESORTS
INCOME STATEMENT
(In millions, except per share data)
(Unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Net revenues
Royalties and franchise fees	$ 152	$ 152	$ 415	$ 394
Marketing, reservation and loyalty	179	159	445	416
Management and other fees	3	3	11	54
License and other fees	30	28	83	74
Other	36	33	110	107
Fee-related and other revenues	400	375	1,064	1,045
Cost reimbursements	2	32	12	119
Net revenues	402	407	1,076	1,164

Expenses
Marketing, reservation and loyalty	162	147	446	384
Operating	24	20	65	85
General and administrative	31	29	93	88
Cost reimbursements	2	32	12	119
Depreciation and amortization	19	18	56	58
Transaction-related	1	—	5	—
Separation-related	—	1	—	—
Gain on asset sale, net	—	—	—	(35)
Total expenses	239	247	677	699

Operating income	163	160	399	465
Interest expense, net	27	21	73	60
Early extinguishment of debt	—	—	3	2

Income before income taxes	136	139	323	403
Provision for income taxes	33	38	83	104
Net income	$ 103	$ 101	$ 240	$ 299

Earnings per share
Basic	$ 1.22	$ 1.13	$ 2.81	$ 3.28
Diluted	1.21	1.13	2.79	3.26

Weighted average shares outstanding
Basic	84.0	89.5	85.2	91.2
Diluted	84.5	89.9	85.7	91.7

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. During the first quarter of 2023, we changed the composition of our reportable segments to reflect the recent changes in our Hotel Management segment, including the sale of our owned assets, the exit of our select-service management business and the exit from substantially all of our U.S. full-service management business. The remaining hotel management business, which is predominately the full-service international managed business, has been aggregated, on a prospective basis, within our Hotel Franchising segment. 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.

		First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year
*Hotel Franchising ^(a)*
	Net revenues
	2023	$ 313	$ 362	$ 402	n/a	n/a
	2022	272	335	367	$ 303	$ 1,277
	2021	209	283	337	270	1,099
	Adjusted EBITDA
	2023	$ 164	$ 175	$ 215	n/a	n/a
	2022	155	185	201	$ 138	$ 679
	2021	105	166	193	128	592

*Hotel Management*
	Net revenues
	2023	n/a	n/a	n/a	n/a	n/a
	2022	$ 99	$ 51	$ 40	$ 31	$ 221
	2021	94	123	126	122	466
	Adjusted EBITDA
	2023	n/a	n/a	n/a	n/a	n/a
	2022	$ 20	$ 6	$ 7	$ 4	$ 37
	2021	5	16	16	19	57

*Corporate and Other*
	Net revenues
	2023	$ —	$ —	$ —	n/a	n/a
	2022	—	—	—	$ —	$ —
	2021	—	—	—	—	—
	Adjusted EBITDA
	2023	$ (17)	$ (17)	$ (15)	n/a	n/a
	2022	(16)	(16)	(17)	$ (16)	$ (66)
	2021	(13)	(14)	(15)	(16)	(59)

*Total Company*
	Net revenues
	2023	$ 313	$ 362	$ 402	n/a	n/a
	2022	371	386	407	$ 334	$ 1,498
	2021	303	406	463	392	1,565
	Net income
	2023	$ 67	$ 70	$ 103	n/a	n/a
	2022	106	92	101	$ 56	$ 355
	2021	24	68	103	48	244
	Adjusted EBITDA
	2023	$ 147	$ 158	$ 200	n/a	n/a
	2022	159	175	191	$ 126	$ 650
	2021	97	168	194	131	590

_____________________
NOTE:	Amounts include the results of the Company's Wyndham Grand Bonnet Creek Resort and Wyndham Grand Rio Mar Resort, which were sold in March 2022 and May 2022, respectively, and its select-service management business, which was exited in March 2022, through their sale/exit dates. 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)	For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company's remaining full-service management business.

Table 3
WYNDHAM HOTELS & RESORTS
CONDENSED CASH FLOWS
(In millions)
(Unaudited)

	Nine Months Ended September 30,
	2023	2022
Operating activities
Net income	$ 240	$ 299
Depreciation and amortization	56	58
Gain on asset sale, net	—	(35)
Trade receivables	(40)	(1)
Accounts payable, accrued expenses and other current liabilities	(15)	4
Deferred revenues	10	20
Payments of development advance notes, net	(47)	(36)
Other, net	49	40
Net cash provided by operating activities	253	349
Investing activities
Property and equipment additions	(28)	(28)
Proceeds from asset sales, net ^(a)	—	263
Acquisition of hotel brand	—	(44)
Loan advances	(22)	—
Other, net	—	(1)
Net cash (used in)/provided by investing activities	(50)	190
Financing activities
Proceeds from long-term debt	1,308	400
Payments of long-term debt	(1,217)	(404)
Debt issuance costs	(10)	(4)
Dividends to shareholders	(90)	(88)
Repurchases of common stock	(261)	(313)
Other, net	(13)	(11)
Net cash used in financing activities	(283)	(420)
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(2)	(4)
Net (decrease)/increase in cash, cash equivalents and restricted cash	(82)	115
Cash, cash equivalents and restricted cash, beginning of period	161	171
Cash, cash equivalents and restricted cash, end of period	$ 79	$ 286

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net cash provided by operating activities ^(b)	$	77	$	107	$	253	$	349
Less: Property and equipment additions	(10)		(10)		(28)		(28)
Free cash flow	$	67	$	97	$	225	$	321

____________________
^(a)	Includes proceeds of $179 million, net of transaction costs, received from the Company's sales of the Wyndham Grand Bonnet Creek Resort and the Wyndham Grand Rio Mar Resort and $84 million of proceeds from CorePoint Lodging related to the Company's exit of its select-service management business.
^(b)	The year-over-year comparability is impacted by higher interest expense and the timing of working capital. The year-over-year comparability of the nine months ended September 30^th is also impacted by incremental development advances and higher marketing spend, as well as the absence of $13 million due to the exit of the select-service management business and owned hotels. While the Company has now lapped the sale of its owned hotels and the exit of its select-service management business, the marketing fund variability, higher interest expense and incremental development advances will continue to impact the year-over-year comparisons during the fourth quarter of 2023.

Table 4
WYNDHAM HOTELS & RESORTS
BALANCE SHEET SUMMARY AND DEBT
(In millions)
(Unaudited)

		As of September 30, 2023	As of December 31, 2022
Assets
Cash and cash equivalents		$ 79	$ 161
Trade receivables, net		272	234
Property and equipment, net		91	99
Goodwill and intangible assets, net		3,109	3,131
Other current and non-current assets		549	498
Total assets		$ 4,100	$ 4,123

Liabilities and stockholders' equity
Total debt		$ 2,160	$ 2,077
Other current liabilities		397	386
Deferred income tax liabilities		338	345
Other non-current liabilities		349	353
Total liabilities		3,244	3,161
Total stockholders' equity		856	962
Total liabilities and stockholders' equity		$ 4,100	$ 4,123

Our outstanding debt was as follows:
	Weighted Average Interest Rate ^(a)	As of September 30, 2023	As of December 31, 2022
$750 million revolving credit facility (due April 2027)	7.4 %	$ 110	$ —
$400 million term loan A (due April 2027)	7.1 %	389	399
$1.6 billion term loan B (due May 2025)		—	1,139
$1.1 billion term loan B (due May 2030)	4.2 %	1,125	—
4.375% senior unsecured notes (due August 2028)	4.4 %	495	494
Finance leases	4.5 %	41	45
Total debt	4.9 %	2,160	2,077
Cash and cash equivalents		79	161
Net debt		$ 2,081	$ 1,916

____________________

^(a) Represents weighted average interest rates for the third quarter 2023, including the effects from hedging.

Our outstanding debt as of September 30, 2023 matures as follows:
	Amount
Within 1 year	$ 37
Between 1 and 2 years	43
Between 2 and 3 years	48
Between 3 and 4 years	442
Between 4 and 5 years	514
Thereafter	1,076
Total	$ 2,160

Table 5
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS

	Nine Months Ended September 30,
	2023	2022	Change	% Change
Beginning Room Count (January 1)
United States	493,800	490,600	3,200	1 %
International	348,700	319,500	29,200	9
Global	842,500	810,100	32,400	4

Additions
United States	18,500	19,600	(1,100)	(6)
International	24,200	32,500	(8,300)	(26)
Global	42,700	52,100	(9,400)	(18)

Deletions
United States	(16,600)	(17,300)	700	4
International	(10,600)	(8,900)	(1,700)	(19)
Global	(27,200)	(26,200)	(1,000)	(4)

Ending Room Count (September 30)
United States	495,700	492,900	2,800	1
International	362,300	343,100	19,200	6
Global	858,000	836,000	22,000	3 %

	As of September 30,				FY 2022 Royalty Distribution
	2023	2022	Change	% Change	FY 2022 Royalty Distribution
System Size
United States
Economy	231,100	237,400	(6,300)	(3 %)
Midscale and Upper Midscale	245,800	236,300	9,500	4
Upscale and Above	18,800	19,200	(400)	(2)
Total United States	495,700	492,900	2,800	1 %	85 %

International
Greater China	167,900	158,500	9,400	6 %	2
Rest of Asia Pacific	34,000	29,500	4,500	15	1
Europe, the Middle East and Africa	81,600	77,900	3,700	5	5
Canada	39,600	39,100	500	1	5
Latin America	39,200	38,100	1,100	3	2
Total International	362,300	343,100	19,200	6 %	15

Global	858,000	836,000	22,000	3 %	100 %

Table 5 (continued)
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS

	Three Months Ended September 30, 2023	Constant Currency % Change ^(a)
Regional RevPAR Growth
United States
Economy	$ 49.85	(3 %)
Midscale and Upper Midscale	64.34	(1)
Upscale and Above	103.36	2
Total United States	$ 58.46	(1 %)

International
Greater China	$ 18.13	28 %
Rest of Asia Pacific	34.64	4
Europe, the Middle East and Africa	59.71	17
Canada	74.84	6
Latin America	43.26	14
Total International	$ 38.05	16 %

Global	$ 49.71	3 %

	Three Months Ended September 30,
	2023	2022	% Change
Average Royalty Rate
United States	4.6 %	4.6 %	—
International	2.5 %	2.1 %	40 bps
Global	3.9 %	3.9 %	—

	Nine Months Ended September 30, 2023	Constant Currency % Change ^(b)
Regional RevPAR Growth
United States
Economy	$ 43.74	(1 %)
Midscale and Upper Midscale	58.56	1
Upscale and Above	99.58	3
Total United States	$ 52.56	— %

International
Greater China	$ 16.82	29 %
Rest of Asia Pacific	32.33	20
Europe, the Middle East and Africa	51.97	29
Canada	57.61	15
Latin America	44.76	34
Total International	$ 33.59	27 %

Global	$ 44.52	7 %

	Nine Months Ended September 30,
	2023	2022	% Change
Average Royalty Rate
United States	4.6 %	4.6 %	—
International	2.4 %	2.1 %	30 bps
Global	3.9 %	4.0 %	(10 bps)

_________________________
^(a)	International and global exclude 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 ^(a)*
	Global RevPAR
	2023	$ 37.20	$ 46.47	$ 49.71	n/a	n/a
	2022	$ 33.08	$ 43.74	$ 48.61	$ 39.18	$ 41.23
	2021	$ 24.02	$ 35.69	$ 44.67	$ 34.77	$ 34.85
	U.S. RevPAR
	2023	$ 43.84	$ 55.26	$ 58.46	n/a	n/a
	2022	$ 41.01	$ 54.70	$ 58.45	$ 45.49	$ 50.00
	2021	$ 29.68	$ 46.99	$ 56.38	$ 42.45	$ 43.95
	International RevPAR
	2023	$ 27.99	$ 34.44	$ 38.05	n/a	n/a
	2022	$ 21.05	$ 26.80	$ 33.90	$ 30.16	$ 28.11
	2021	$ 15.26	$ 18.21	$ 26.62	$ 23.13	$ 20.86
	Global Rooms ^(b)
	2023	844,800	851,500	858,000	n/a	n/a
	2022	793,200	799,200	816,300	827,100	827,100
	2021	748,700	752,500	758,600	769,400	769,400
	U.S. Rooms
	2023	494,400	495,100	495,700	n/a	n/a
	2022	486,600	487,600	488,100	493,500	493,500
	2021	452,500	454,200	458,000	465,100	465,100
	International Rooms ^(b)
	2023	350,400	356,400	362,300	n/a	n/a
	2022	306,600	311,600	328,200	333,600	333,600
	2021	296,200	298,300	300,600	304,300	304,300

*Hotel Management*
	Global RevPAR
	2023	n/a	n/a	n/a	n/a	n/a
	2022	$ 56.55	$ 65.13	$ 71.54	$ 68.04	$ 64.07
	2021	$ 38.17	$ 56.08	$ 64.63	$ 57.57	$ 53.81
	U.S. RevPAR
	2023	n/a	n/a	n/a	n/a	n/a
	2022	$ 69.92	$ 135.35	$ 126.34	$ 98.28	$ 92.66
	2021	$ 42.89	$ 67.42	$ 78.27	$ 66.77	$ 63.20
	International RevPAR
	2023	n/a	n/a	n/a	n/a	n/a
	2022	$ 40.26	$ 40.89	$ 53.57	$ 59.49	$ 48.61
	2021	$ 27.12	$ 31.20	$ 37.53	$ 40.96	$ 34.31
	Global Rooms
	2023	n/a	n/a	n/a	n/a	n/a
	2022	20,100	19,700	19,700	15,400	15,400
	2021	48,500	45,500	44,000	40,700	40,700
	U.S. Rooms
	2023	n/a	n/a	n/a	n/a	n/a
	2022	5,300	4,800	4,800	300	300
	2021	33,500	30,600	28,800	25,500	25,500
	International Rooms
	2023	n/a	n/a	n/a	n/a	n/a
	2022	14,800	14,900	14,900	15,100	15,100
	2021	15,000	14,900	15,200	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
	2023	$ 37.20	$ 46.47	$ 49.71	n/a	n/a
	2022	$ 34.06	$ 44.28	$ 49.17	$ 39.86	$ 41.88
	2021	$ 24.90	$ 36.92	$ 45.80	$ 35.99	$ 35.95
	U.S. RevPAR
	2023	$ 43.84	$ 55.26	$ 58.46	n/a	n/a
	2022	$ 42.11	$ 55.57	$ 59.15	$ 45.96	$ 50.72
	2021	$ 30.62	$ 48.37	$ 57.73	$ 43.84	$ 45.19
	International RevPAR
	2023	$ 27.99	$ 34.44	$ 38.05	n/a	n/a
	2022	$ 21.95	$ 27.46	$ 34.79	$ 31.44	$ 29.05
	2021	$ 15.83	$ 18.84	$ 27.15	$ 23.99	$ 21.52
	Global Rooms ^(b)
	2023	844,800	851,500	858,000	n/a	n/a
	2022	813,300	818,900	836,000	842,500	842,500
	2021	797,200	798,000	802,600	810,100	810,100
	U.S. Rooms
	2023	494,400	495,100	495,700	n/a	n/a
	2022	491,900	492,400	492,900	493,800	493,800
	2021	486,000	484,800	486,800	490,600	490,600
	International Rooms ^(b)
	2023	350,400	356,400	362,300	n/a	n/a
	2022	321,400	326,500	343,100	348,700	348,700
	2021	311,200	313,200	315,800	319,500	319,500

____________________
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, including approximately 19,000 rooms in first quarter 2022.
^(a)	For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company's remaining full-service management business.
^(b)	Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.

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 to Adjusted EBITDA:

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year
2023
Net income	$ 67	$ 70	$ 103
Provision for income taxes	24	26	33
Depreciation and amortization	19	19	19
Interest expense, net	22	24	27
Early extinguishment of debt ^(a)	—	3	—
Stock-based compensation	9	9	10
Development advance notes amortization	3	4	4
Transaction-related ^(b)	—	4	1
Separation-related ^(c)	2	(2)	—
Foreign currency impact of highly inflationary countries ^(d)	1	1	3
Adjusted EBITDA	$ 147	$ 158	$ 200

2022
Net income	$ 106	$ 92	$ 101	$ 56	$ 355
Provision for income taxes	34	31	38	16	121
Depreciation and amortization	24	17	18	19	77
Interest expense, net	20	20	21	21	80
Early extinguishment of debt ^(a)	—	2	—	—	2
Stock-based compensation	8	9	8	8	33
Development advance notes amortization	3	3	3	3	12
(Gain)/loss on asset sale, net ^(e)	(36)	1	—	—	(35)
Separation-related ^(c)	—	(1)	1	1	1
Foreign currency impact of highly inflationary countries ^(d)	—	1	1	2	4
Adjusted EBITDA	$ 159	$ 175	$ 191	$ 126	$ 650

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	5	8	7	8	28
Development advance notes amortization	2	2	3	3	11
Impairments, net^(f)	—	—	—	6	6
Separation-related ^(c)	2	1	—	—	3
Foreign currency impact of highly inflationary countries ^(d)	1	—	—	—	1
Adjusted EBITDA	$ 97	$ 168	$ 194	$ 131	$ 590

____________________
NOTE: Amounts may not add due to rounding.
^(a)	Amount in 2023 relates to non-cash charges associated with the Company's refinancing of its term loan B. Amount in 2022 relates to non-cash charges associated with the Company's extension of its revolving credit facility and the prepayment of $400 million of its term loan B. Amount in 2021 relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes.
^(b)	Represents costs related to corporate transactions.
^(c)	Represents costs associated with the Company's spin-off from Wyndham Worldwide.
^(d)	Relates to the foreign currency impact from hyper-inflation, primarily in Argentina, which is reflected in operating expenses on the income statement.
^(e)	Represents (gain)/loss on sales of the Company's owned hotels, the Wyndham Grand Bonnet Creek Resort and Wyndham Grand Rio Mar.
^(f)	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.

Table 7 (continued)
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions, except per share data)

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Diluted EPS	$ 1.21	$ 1.13	$ 2.79	$ 3.26

Net income	$ 103	$ 101	$ 240	$ 299

Adjustments:
Acquisition-related amortization expense ^(a)	7	7	20	25
Transaction-related	1	—	5	—
Early extinguishment of debt	—	—	3	2
Foreign currency impact of highly inflationary countries	3	1	6	2
Separation-related	—	1	—	—
Gain on asset sale, net	—	—	—	(35)
Total adjustments before tax	11	9	34	(6)
Income tax provision/(benefit) ^(b)	3	2	8	(3)
Total adjustments after tax	8	7	26	(3)
Adjusted net income	$ 111	$ 108	$ 266	$ 296
Adjustments - EPS impact	0.10	0.08	0.31	(0.04)
Adjusted diluted EPS	$ 1.31	$ 1.21	$ 3.10	$ 3.22

Diluted weighted average shares outstanding	84.5	89.9	85.7	91.7

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

Table 8
WYNDHAM HOTELS & RESORTS
2023 OUTLOOK
As of October 25, 2023
(In millions, except per share data)

	2023 Outlook
Fee-related and other revenues ^(a)	$	1,379 - 1,409
Adjusted EBITDA ^(b)		654 - 664
Depreciation and amortization expense ^(c)		48 - 50
Development advance notes amortization expense		13 - 15
Stock-based compensation expense		37 - 39
Interest expense, net		100 - 102
Adjusted income before income taxes		449 - 463
Income tax expense ^(d)		113 - 115
Adjusted net income	$	336 - 348

Adjusted diluted EPS	$	3.94 - 4.08

Diluted shares ^(e)		85.2

Marketing, reservation and loyalty funds ^(f)		Approx. $10

Capital expenditures		Approx. $35
Development advance notes		Approx. $60

Free cash flow conversion rate ^(g)		50% - 55%

Year-over-Year Growth
Global RevPAR ^(a)(h)		4% - 6%
Number of rooms		2% - 4%

___________________
^(a)	Lower end of range.
^(b)	Year-over-year growth rates are not comparable due to the sale of the Company's owned hotels and the exit of its select-service management business during 2022, as well as the variability in its marketing funds due to the recovery of the COVID support that the Company provided to its owners during 2020.
^(c)	Excludes amortization of acquisition-related intangible assets of approximately $27 million.
^(d)	Outlook assumes an effective tax rate of approximately 25%.
^(e)	Excludes the impact of any share repurchases after September 30, 2023.
^(f)	Represents the recovery of $49 million COVID support that the Company provided to its owners during 2020. The Company recovered $38 million of the $49 million support during 2021 and 2022 combined.
^(g)	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.
^(h)	Outlook represents global RevPAR growth of approximately 6% - 8% compared to 2019.

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, separation-related items, transaction-related items (acquisition-, disposition-, or debt-related), (gain)/loss on asset sales 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, separation-related items, transaction-related items (acquisition-, disposition-, or debt-related), (gain)/loss on asset sales, 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.

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 Basis: Represents a comparison eliminating the contribution from the Company's owned hotels and select-service management business - both of which were exited in the first half of 2022, as well as the variability in its marketing funds due to the recovery of the COVID support that the Company provided to its owners during 2020.

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.

SOURCE Wyndham Hotels & Resorts

Wyndham Hotels & Resorts Reports Third Quarter 2023 Results

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