Company Increases Quarterly Dividend 50% and Provides Full Year 2021 Outlook
Wyndham Hotels & Resorts (NYSE: WH) yesterday announced results for the three months ended June 30, 2021. Highlights include:
- Second quarter diluted earnings per share was $0.73 compared to diluted loss per share of $1.86 in second quarter 2020; second quarter adjusted diluted EPS was $0.95 compared to adjusted diluted EPS of $0.10 in second quarter 2020.
- Second quarter net income was $68 million compared to a net loss of $174 million in second quarter 2020; second quarter adjusted net income was $89 million compared to adjusted net income of $9 million in second quarter 2020.
- Second quarter adjusted EBITDA was $168 million compared to adjusted EBITDA of $66 million in second quarter 2020.
- Second quarter net cash provided by operating activities was $116 million and free cash flow was $104 million compared to net cash used in operating activities of $57 million and free cash flow of $(68) million in second quarter 2020.
- Global RevPAR increased 110% compared to second quarter 2020 and declined 17% compared to second quarter 2019 in constant currency.
- Paid quarterly cash dividend of $0.16 per share in second quarter and Board of Directors recently authorized a 50% increase in the quarterly cash dividend to $0.24 per share beginning with the dividend expected to be declared in third quarter 2021.
- Company provides full-year 2021 outlook.
"With continued increasing demand from our leisure and everyday business travelers, our select-service franchise business model generated another strong quarter of adjusted EBITDA and cash flow, allowing us to increase our dividend by 50%," said Geoffrey A. Ballotti, president and chief executive officer. "Our brands continue to capture market share gains above pre-pandemic levels, while our economy brands here in the U.S. actually exceeded 2019 RevPAR for the quarter. We opened over 70% more rooms than we did last year while growing our development pipeline by 6% vs. prior year, and by 2% sequentially - to over 190,000 rooms. We are extremely proud of all that our team members around the world have achieved, as they remain focused on delivering exceptional value for our owners, guests and shareholders."
Fee-related and other revenues increased 67% to $321 million, compared to $192 million in the second quarter of 2020 primarily reflecting the ongoing recovery in travel demand and its impact on global RevPAR, which has now recovered to 83% of 2019 levels, including domestic RevPAR at 95% of 2019 levels.
The Company generated net income of $68 million, or $0.73 per diluted share, compared to a net loss of $174 million, or $1.86 loss per diluted share, in the second quarter of 2020. The increase of $242 million, or $2.59 per diluted share, reflects: the ongoing recovery in travel demand; a $10 million, or $0.11 per diluted share, after-tax benefit from the marketing fund related to timing; and the absence of $176 million, or $1.89 per diluted share, after-tax of special-item charges incurred during second quarter 2020. These results were partially offset by a $14 million, or $0.15 per diluted share, after-tax impact in 2021 related to the early extinguishment of the Company's 5.375% senior unsecured notes.
The following discussion of second quarter operating results focuses on the Company's key drivers as well as revenue and adjusted EBITDA for each of the Company's segments. Full reconciliations of GAAP results to the Company's non-GAAP adjusted measures for all reported periods appear in the tables to this press release.
System Size
| June 30, 2021 | December 31, 2020 | YTD Change (bps) | |||||
| United States | 484,800 | 487,300 | (50) | ||||
| International | 313,200 | 308,600 | 150 | ||||
| Global | 798,000 | 795,900 | 30 | ||||
During the first half of 2021, the Company's global system grew 30 basis points primarily reflecting continued growth in the Company's direct-franchising business in China. This was partially offset by the anticipated decline in domestic system size as conversion and new construction activities continue to ramp-up following the pandemic and recent supply chain delays. Year-to-date deletions ran 27% below 2019 levels putting the Company solidly on track with its goal of achieving a 95% retention rate for the full year 2021.
RevPAR
| Second Quarter 2021 | Constant Currency YOY % Change | Constant Currency % Change vs. 2019 | ||||||||
| United States | $ | 48.37 | 109 | % | (5) | % | ||||
| International | 18.84 | 119 | (44) | |||||||
| Global | 36.92 | 110 | (17) | |||||||
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, global RevPAR declined 17% reflecting a 5% decline in the U.S. and a 44% decline internationally. The 5% decline in the U.S. represents continued sequential improvement compared to a decline of 25% in the first quarter of 2021. Importantly, RevPAR for the Company's economy brands exceeded 2019 levels by 4% in the second quarter. The 44% international decline primarily represents a 68% decline in the Company's EMEA region and a 7% decline in China.
Business Segment Results
| Revenue | Adjusted EBITDA | |||||||||||||||||||||
| Second Quarter 2021 | Second Quarter 2020 | % Change | Second Quarter 2021 | Second Quarter 2020 | % Change | |||||||||||||||||
| Hotel Franchising | $ | 283 | $ | 182 | 55 | % | $ | 166 | $ | 86 | 93 | % | ||||||||||
| Hotel Management | 123 | 76 | 62 | 16 | (4) | n/a | ||||||||||||||||
| Corporate and Other | — | — | — | (14) | (16) | 13 | ||||||||||||||||
| Total Company | $ | 406 | $ | 258 | 57 | $ | 168 | $ | 66 | 155 | ||||||||||||
Hotel Franchising revenues increased 55% year-over-year to $283 million, primarily reflecting the global RevPAR increase. Adjusted EBITDA increased 93% to $166 million as the growth in revenues and the timing benefit from the marketing fund was partially offset by higher volume-related expenses.
Hotel Management revenues increased 62% year-over-year to $123 million, reflecting a $19 million increase in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues increased 280% to $38 million, primarily due to the global RevPAR increase, as well as improved performance at the Company's owned hotels and incremental management contract termination fees resulting from the sale of CorePoint Lodging properties. Hotel Management adjusted EBITDA increased $20 million year-over-year reflecting the revenue increases, partially offset by higher volume-related expenses.
During the second quarter 2021, the Company's marketing fund revenues exceeded expenses by $14 million; while in second quarter 2020, the Company's marketing fund expenses exceeded revenues by $3 million. While the Company does not expect the marketing fund to have a significant impact on full year 2021 adjusted EBITDA, there may continue to be timing differences in quarterly comparisons.
Development
The Company awarded 154 new contracts this quarter compared to 116 in second quarter 2020 and 173 in second quarter 2019. On June 30, 2021, the Company's global development pipeline consisted of over 1,400 hotels and over 190,000 rooms. The pipeline grew 580 basis points year-over-year and 170 basis points sequentially - including 70 basis points domestically and 230 basis points internationally. Approximately 64% of the Company's development pipeline is international and 74% is new construction, of which approximately 34% has broken ground.
Cash and Liquidity
The Company generated $116 million of net cash provided by operating activities in the second quarter of 2021 compared to net cash used in operating activities of $57 million in second quarter 2020. Free cash flow increased $172 million year-over-year as the Company generated free cash flow of $104 million in the second quarter of 2021 compared to using $68 million in the second quarter 2020 (which included $33 million of special-item cash outlays).
At June 30, 2021, the Company had $103 million of cash on its balance sheet and approximately $840 million in total liquidity.
Dividends
The Company paid common stock dividends of $15 million, or $0.16 per share, in the second quarter of 2021.
The Company's Board of Directors authorized a 50% increase in the quarterly cash dividend to $0.24 per share from $0.16 per share, beginning with the dividend that is expected to be declared in third quarter 2021.
2021 Outlook
The Company provided the following outlook for full-year 2021:
- Fee-related and other revenues of $1.16 billion to $1.19 billion.
- Adjusted net income of $244 million to $254 million.
- Adjusted EBITDA of $525 million to $535 million.
- Adjusted diluted EPS of $2.60 to $2.70, based on an adjusted diluted share count of 94.0 million that excludes any future share repurchases.
- Rooms growth of 1% to 2%.
- A RevPAR increase of approximately 40% versus 2020, or a decline of approximately 16% compared to 2019.
- Free cash conversion from Adjusted EBITDA of approximately 55%.
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 nearly 95 countries on six continents.
| Table 1 | |||||||||||||||||||||||
| WYNDHAM HOTELS & RESORTS | |||||||||||||||||||||||
| INCOME/(LOSS) STATEMENT | |||||||||||||||||||||||
| (In millions, except per share data) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net revenues | |||||||||||||||||||||||
| Royalties and franchise fees | $ | 122 | $ | 61 | $ | 200 | $ | 154 | |||||||||||||||
| Marketing, reservation and loyalty | 119 | 82 | 204 | 188 | |||||||||||||||||||
| Management and other fees | 30 | 6 | 50 | 38 | |||||||||||||||||||
| License and other fees | 20 | 21 | 40 | 42 | |||||||||||||||||||
| Other | 30 | 22 | 60 | 53 | |||||||||||||||||||
| Fee-related and other revenues | 321 | 192 | 554 | 475 | |||||||||||||||||||
| Cost reimbursements | 85 | 66 | 155 | 192 | |||||||||||||||||||
| Net revenues | 406 | 258 | 709 | 667 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Marketing, reservation and loyalty | 105 | 85 | 198 | 204 | |||||||||||||||||||
| Operating | 31 | 23 | 58 | 57 | |||||||||||||||||||
| General and administrative | 27 | 26 | 51 | 54 | |||||||||||||||||||
| Cost reimbursements | 85 | 66 | 155 | 192 | |||||||||||||||||||
| Depreciation and amortization | 24 | 25 | 47 | 49 | |||||||||||||||||||
| Separation-related | 1 | — | 3 | 1 | |||||||||||||||||||
| Impairments, net | — | 206 | — | 206 | |||||||||||||||||||
| Restructuring | — | 16 | — | 29 | |||||||||||||||||||
| Transaction-related, net | — | 5 | — | 13 | |||||||||||||||||||
| Total expenses | 273 | 452 | 512 | 805 | |||||||||||||||||||
| Operating income/(loss) | 133 | (194) | 197 | (138) | |||||||||||||||||||
| Interest expense, net | 22 | 28 | 51 | 54 | |||||||||||||||||||
| Early extinguishment of debt | 18 | — | 18 | — | |||||||||||||||||||
| Income/(loss) before income taxes | 93 | (222) | 128 | (192) | |||||||||||||||||||
| Provision for/(benefit from) income taxes | 25 | (48) | 35 | (40) | |||||||||||||||||||
| Net income/(loss) | $ | 68 | $ | (174) | $ | 93 | $ | (152) | |||||||||||||||
| Earnings/(loss) per share | |||||||||||||||||||||||
| Basic | $ | 0.73 | $ | (1.86) | $ | 0.99 | $ | (1.63) | |||||||||||||||
| Diluted | 0.73 | (1.86) | 0.99 | (1.63) | |||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | 93.6 | 93.3 | 93.5 | 93.5 | |||||||||||||||||||
| Diluted | 94.1 | 93.3 | 93.9 | 93.5 | |||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
| 2020 | 243 | 182 | 236 | 202 | 863 | |||||||||||||||||||||||||||
| 2019 | 269 | 331 | 379 | 300 | 1,279 | |||||||||||||||||||||||||||
| Adjusted EBITDA (a) | ||||||||||||||||||||||||||||||||
| 2021 | $ | 105 | $ | 166 | ||||||||||||||||||||||||||||
| 2020 | 110 | 86 | 119 | 77 | 392 | |||||||||||||||||||||||||||
| 2019 | 115 | 164 | 197 | 153 | 629 | |||||||||||||||||||||||||||
| Hotel Management | ||||||||||||||||||||||||||||||||
| Net revenues | ||||||||||||||||||||||||||||||||
| 2021 | $ | 94 | $ | 123 | ||||||||||||||||||||||||||||
| 2020 | 167 | 76 | 101 | 94 | 437 | |||||||||||||||||||||||||||
| 2019 | 197 | 201 | 180 | 190 | 768 | |||||||||||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||||||||
| 2021 | $ | 5 | $ | 16 | ||||||||||||||||||||||||||||
| 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) | ||||||||||||||||||||||||||||
| 2020 | (18) | (16) | (18) | (18) | (69) | |||||||||||||||||||||||||||
| 2019 | (18) | (19) | (18) | (19) | (74) | |||||||||||||||||||||||||||
| Total Company | ||||||||||||||||||||||||||||||||
| Net revenues | ||||||||||||||||||||||||||||||||
| 2021 | $ | 303 | $ | 406 | ||||||||||||||||||||||||||||
| 2020 | 410 | 258 | 337 | 296 | 1,300 | |||||||||||||||||||||||||||
| 2019 | 468 | 533 | 560 | 492 | 2,053 | |||||||||||||||||||||||||||
| Net income/(loss) | ||||||||||||||||||||||||||||||||
| 2021 | $ | 24 | $ | 68 | ||||||||||||||||||||||||||||
| 2020 | 22 | (174) | 27 | (7) | (132) | |||||||||||||||||||||||||||
| 2019 | 21 | 26 | 45 | 64 | 157 | |||||||||||||||||||||||||||
| Adjusted EBITDA (a) | ||||||||||||||||||||||||||||||||
| 2021 | $ | 97 | $ | 168 | ||||||||||||||||||||||||||||
| 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) | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Operating activities | |||||||||||
| Net income/(loss) | $ | 93 | $ | (152) | |||||||
| Depreciation and amortization | 47 | 49 | |||||||||
| Impairment (a) | — | 209 | |||||||||
| Deferred income taxes | 3 | (47) | |||||||||
| Trade receivables | (16) | (44) | |||||||||
| Accounts payable, accrued expenses and other current liabilities | 6 | (51) | |||||||||
| Deferred revenues | 11 | (22) | |||||||||
| Other, net | 36 | 18 | |||||||||
| Net cash provided by/(used in) operating activities | 180 | (40) | |||||||||
| Investing activities | |||||||||||
| Property and equipment additions | (17) | (18) | |||||||||
| Other, net | (1) | (1) | |||||||||
| Net cash used in investing activities | (18) | (19) | |||||||||
| Financing activities | |||||||||||
| Proceeds from/(payments of) long-term debt, net | (521) | 726 | |||||||||
| Dividends to shareholders | (30) | (38) | |||||||||
| Repurchases of common stock | — | (50) | |||||||||
| Other, net | (1) | (8) | |||||||||
| Net cash (used in)/provided by financing activities | (552) | 630 | |||||||||
| Effect of changes in exchange rates on cash, cash equivalents and restricted cash | — | (1) | |||||||||
| Net (decrease)/increase in cash, cash equivalents and restricted cash | (390) | 570 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 493 | 94 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 103 | $ | 664 | |||||||
| Free Cash Flow: | |||||||||||||||||||||||
| We define free cash flow to be net cash provided by/(used in) operating activities less property and equipment additions, which we also refer to as capital expenditures. We believe free cash flow to be a useful operating performance measure to us and investors to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions and investments, as well as our ability to return cash to shareholders through dividends and share repurchases. This non-GAAP measure is not necessarily a representation of how we will use excess cash. A limitation of using free cash flow versus the GAAP measure of net cash provided by/(used in) operating activities as a means for evaluating Wyndham Hotels is that free cash flow does not represent the total cash movement for the period as detailed in the condensed consolidated statement of cash flows. | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net cash provided by/(used in) operating activities (b) | $ | 116 | $ | (57) | $ | 180 | $ | (40) | |||||||||||||||
| Less: Property and equipment additions | (12) | (11) | (17) | (18) | |||||||||||||||||||
| Free cash flow | $ | 104 | $ | (68) | $ | 163 | $ | (58) | |||||||||||||||
| ____________________ | |
| (a) | 2020 excludes $3 million of cash proceeds from a previously impaired asset. |
| (b) | The three and six months ended June 30, 2020 include $33 million and $48 million, respectively, of payments in connection with our restructuring initiatives, our acquisition of La Quinta and our spin-off from Wyndham Worldwide, as well as an estimated impact of $67 million from the Company's franchisee fee deferral program. |
| Table 4 | ||||||||||||||
| WYNDHAM HOTELS & RESORTS | ||||||||||||||
| BALANCE SHEET SUMMARY AND DEBT | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 103 | $ | 493 | ||||||||||
| Trade receivables, net | 298 | 295 | ||||||||||||
| Property and equipment, net | 267 | 278 | ||||||||||||
| Goodwill and intangible assets, net | 3,220 | 3,240 | ||||||||||||
| Other current and non-current assets | 353 | 338 | ||||||||||||
| Total assets | $ | 4,241 | $ | 4,644 | ||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Total debt | $ | 2,092 | $ | 2,597 | ||||||||||
| Other current liabilities | 340 | 325 | ||||||||||||
| Deferred income tax liabilities | 368 | 359 | ||||||||||||
| Other non-current liabilities | 381 | 400 | ||||||||||||
| Total liabilities | 3,181 | 3,681 | ||||||||||||
| Total stockholders' equity | 1,060 | 963 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 4,241 | $ | 4,644 | ||||||||||
| Our outstanding debt was as follows: | ||||||||||||||
| As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
| $750 million revolving credit facility (due May 2023) | $ | — | $ | — | ||||||||||
| Term loan (due May 2025) | 1,547 | 1,554 | ||||||||||||
| 5.375% senior unsecured notes (due April 2026) (a) | — | 496 | ||||||||||||
| 4.375% senior unsecured notes (due August 2028) | 492 | 492 | ||||||||||||
| Finance leases | 53 | 55 | ||||||||||||
| Total debt | 2,092 | 2,597 | ||||||||||||
| Cash and cash equivalents | 103 | 493 | ||||||||||||
| Net debt | $ | 1,989 | $ | 2,104 | ||||||||||
| ____________________ | |
| (a) | The Company redeemed these notes on April 15, 2021 primarily with available cash. |
| Our outstanding debt as of June 30, 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 | 1,505 | ||||||||||
| Between 4 and 5 years | 6 | ||||||||||
| Thereafter | 517 | ||||||||||
| Total | $ | 2,092 | |||||||||
| Table 5 | |||||||||
| WYNDHAM HOTELS & RESORTS | |||||||||
| REVENUE DRIVERS | |||||||||
| Six Months Ended June 30, | |||||||||
| 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 | 8,100 | 5,400 | 2,700 | 50 | |||||
| International | 9,300 | 6,500 | 2,800 | 43 | |||||
| Global | 17,400 | 11,900 | 5,500 | 46 | |||||
| Deletions | |||||||||
| United States | (10,600) | (13,600) | 3,000 | 22 | |||||
| International (a) | (4,700) | (16,400) | 11,700 | 71 | |||||
| Global (a) | (15,300) | (30,000) | 14,700 | 49 | |||||
| Ending Room Count (June 30) | |||||||||
| United States | 484,800 | 502,000 | (17,200) | (3) | |||||
| International | 313,200 | 310,900 | 2,300 | 1 | |||||
| Global | 798,000 | 812,900 | (14,900) | (2%) | |||||
| As of June 30, | FY 2019 Royalty Contribution (c) | ||||||||
| 2021 | 2020 | Change | % Change (b) | ||||||
| System Size | |||||||||
| United States | |||||||||
| Economy | 247,500 | 254,300 | (6,800) | (3%) | |||||
| Midscale and Upper Midscale | 219,600 | 231,000 | (11,400) | (5) | |||||
| Upscale and Above | 17,700 | 16,700 | 1,000 | 6 | |||||
| Total United States | 484,800 | 502,000 | (17,200) | (3%) | 86% | ||||
| International | |||||||||
| Greater China | 148,600 | 144,300 | 4,300 | 3% | 3 | ||||
| Rest of Asia Pacific | 28,300 | 27,800 | 500 | 2 | 1 | ||||
| Europe, the Middle East and Africa | 66,700 | 69,000 | (2,300) | (3) | 4 | ||||
| Canada | 39,600 | 40,600 | (1,000) | (2) | 5 | ||||
| Latin America | 30,000 | 29,200 | 800 | 3 | 1 | ||||
| Total International | 313,200 | 310,900 | 2,300 | 1% | 14 | ||||
| Global | 798,000 | 812,900 | (14,900) | (2%) | 100% | ||||
| ____________________ | |
| (a) | 2020 includes the second quarter termination of approximately 9,000 master-franchisee rooms in Greater China in connection with the Company's previously announced strategic termination plan. |
| (b) | Includes the global impact from the Company's previously announced strategic termination plan in 2020 resulting in the removal of 17,700 rooms in 2020, including 8,200 rooms in the U.S., 5,000 master-franchise rooms in Greater China and 4,500 unprofitable rooms in Europe, the Middle East and Africa and the rest of Asia Pacific. |
| (c) | FY 2019 provided to illustrate pre-pandemic results. |
| Table 5 (continued) | ||||||||||||||||||||
| WYNDHAM HOTELS & RESORTS | ||||||||||||||||||||
| REVENUE DRIVERS | ||||||||||||||||||||
| Three Months Ended June 30, 2021 | Constant Currency % Change (a) | Two-Year Basis % Change (b) | ||||||||||||||||||
| Regional RevPAR Growth | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Economy | $ | 42.70 | 86% | 4% | ||||||||||||||||
| Midscale and Upper Midscale | 53.00 | 124 | (9) | |||||||||||||||||
| Upscale and Above | 75.79 | 284 | (32) | |||||||||||||||||
| Total United States | $ | 48.37 | 109% | (5%) | ||||||||||||||||
| International | ||||||||||||||||||||
| Greater China | $ | 18.43 | 99% | (7%) | ||||||||||||||||
| Rest of Asia Pacific | 22.13 | 140 | (38) | |||||||||||||||||
| Europe, the Middle East and Africa | 16.47 | 202 | (68) | |||||||||||||||||
| Canada | 25.84 | 67 | (49) | |||||||||||||||||
| Latin America | 12.98 | 371 | (54) | |||||||||||||||||
| Total International | $ | 18.84 | 119% | (44%) | ||||||||||||||||
| Global | $ | 36.92 | 110% | (17%) | ||||||||||||||||
| Three Months Ended June 30, | ||||||||||||||||||||
| 2021 | 2020 | % Change (c) | ||||||||||||||||||
| Average Royalty Rate | ||||||||||||||||||||
| United States | 4.6% | 4.6% | — | |||||||||||||||||
| International | 2.2% | 2.4% | (20 bps) | |||||||||||||||||
| Global | 4.2% | 4.2% | — | |||||||||||||||||
| Six Months Ended June 30, 2021 | Constant Currency % Change (a) | Two-Year Basis % Change (b) | ||||||||||||||||||
| Regional RevPAR Growth | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Economy | $ | 35.07 | 41% | (4%) | ||||||||||||||||
| Midscale and Upper Midscale | 43.26 | 40 | (18) | |||||||||||||||||
| Upscale and Above | 60.53 | 27 | (40) | |||||||||||||||||
| Total United States | $ | 39.53 | 40% | (14%) | ||||||||||||||||
| International | ||||||||||||||||||||
| Greater China | $ | 16.09 | 115% | (16%) | ||||||||||||||||
| Rest of Asia Pacific | 21.56 | 13 | (42) | |||||||||||||||||
| Europe, the Middle East and Africa | 16.06 | (19) | (67) | |||||||||||||||||
| Canada | 23.38 | — | (46) | |||||||||||||||||
| Latin America | 13.79 | (6) | (48) | |||||||||||||||||
| Total International | $ | 17.35 | 24% | (44%) | ||||||||||||||||
| Global | $ | 30.94 | 36% | (23%) | ||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||
| 2021 | 2020 | % Change (c) | ||||||||||||||||||
| Average Royalty Rate | ||||||||||||||||||||
| United States | 4.6% | 4.6% | — | |||||||||||||||||
| International | 2.1% | 2.3% | (20 bps) | |||||||||||||||||
| Global | 4.1% | 4.1% | — | |||||||||||||||||
| ____________________ | |
| (a) | International excludes the impact of currency exchange movements. |
| (b) | Compares 2021 to 2019; international excludes the impact of currency exchange movements. |
| (c) | Decline in international royalty rate is a result of the revenue mix impact contributed by the Company's outsized growth in Greater China. |
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||
| Provision for income taxes | 11 | 25 | |||||||||||||||||||||||||||
| Depreciation and amortization | 24 | 24 | |||||||||||||||||||||||||||
| Interest expense, net | 28 | 22 | |||||||||||||||||||||||||||
| Early extinguishment of debt (a) | — | 18 | |||||||||||||||||||||||||||
| Stock-based compensation expense | 5 | 8 | |||||||||||||||||||||||||||
| Development advance notes amortization (b) | 2 | 2 | |||||||||||||||||||||||||||
| Separation-related expenses (c) | 2 | 1 | |||||||||||||||||||||||||||
| Foreign currency impact of highly inflationary countries (d) | 1 | — | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 97 | $ | 168 | |||||||||||||||||||||||||
| 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 (e) | — | 206 | — | — | 206 | ||||||||||||||||||||||||
| Restructuring costs (f) | 13 | 16 | — | 5 | 34 | ||||||||||||||||||||||||
| Transaction-related expenses, net (g) | 8 | 5 | — | — | 12 | ||||||||||||||||||||||||
| Separation-related expenses (c) | 1 | — | — | 1 | 2 | ||||||||||||||||||||||||
| Foreign currency impact of highly inflationary countries (d) | — | — | 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 (c) | 21 | 1 | — | — | 22 | ||||||||||||||||||||||||
| Transaction-related item (k) | — | — | 20 | — | 20 | ||||||||||||||||||||||||
| Foreign currency impact of highly inflationary countries (d) | 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) | Represents costs associated with the Company's spin-off from Wyndham Worldwide. |
| (d) | Relates to the foreign currency impact from hyper-inflation in Argentina, which is reflected in operating expenses on the income statement. |
| (e) | 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. |
| (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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Diluted earnings/(loss) per share | $ | 0.73 | $ | (1.86) | $ | 0.99 | $ | (1.63) | |||||||||||||||
| Net income/(loss) | $ | 68 | $ | (174) | $ | 93 | $ | (152) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Early extinguishment of debt (a) | 18 | — | 18 | — | |||||||||||||||||||
| Acquisition-related amortization expense (b) | 9 | 9 | 18 | 19 | |||||||||||||||||||
| Separation-related expenses | 1 | — | 3 | 1 | |||||||||||||||||||
| Foreign currency impact of highly inflationary countries | — | — | 1 | 1 | |||||||||||||||||||
| Impairments, net | — | 206 | — | 206 | |||||||||||||||||||
| Restructuring costs | — | 16 | — | 29 | |||||||||||||||||||
| Transaction-related expenses, net | — | 5 | — | 13 | |||||||||||||||||||
| Total adjustments before tax | 28 | 236 | 40 | 269 | |||||||||||||||||||
| Income tax provision (c) | 7 | 53 | 10 | 61 | |||||||||||||||||||
| Total adjustments after tax | 21 | 183 | 30 | 208 | |||||||||||||||||||
| Adjusted net income | $ | 89 | $ | 9 | $ | 123 | $ | 56 | |||||||||||||||
| Adjustments - EPS impact | 0.22 | 1.96 | 0.32 | 2.22 | |||||||||||||||||||
| Adjusted diluted EPS | $ | 0.95 | $ | 0.10 | $ | 1.31 | $ | 0.59 | |||||||||||||||
| Diluted weighted average shares outstanding | 94.1 | 93.3 | 93.9 | 93.6 | |||||||||||||||||||
| ____________________ | |
| (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. |
| Table 8 | ||||||||
| WYNDHAM HOTELS & RESORTS | ||||||||
| 2021 OUTLOOK | ||||||||
| As of July 28, 2021 | ||||||||
| (In millions, except per share data) | ||||||||
| 2021 Outlook | ||||||||
| Fee-related and other revenues (a) | $ | 1,160 - 1,190 | ||||||
| Adjusted EBITDA | 525 - 535 | |||||||
| Depreciation and amortization expense (b) | 56 - 58 | |||||||
| Development advance notes amortization expense | 9 - 11 | |||||||
| Stock-based compensation expense | 27 - 29 | |||||||
| Interest expense, net (c) | 94 - 96 | |||||||
| Adjusted income before income taxes | 333 - 348 | |||||||
| Income tax expense (d) | 89 - 94 | |||||||
| Adjusted net income | $ | 244 - 254 | ||||||
| Adjusted diluted EPS | $ | 2.60 - 2.70 | ||||||
| Diluted shares (e) | 94.0 | |||||||
| Marketing, reservation and loyalty funds | Break even | |||||||
| Capital expenditures | Approx. $40 | |||||||
| Development advance notes | Approx. $40 | |||||||
| Free cash flow conversion rate (f) | Approx. 55% | |||||||
| Year-over-Year Growth | ||||||||
| Global RevPAR (g) | Approx. 40% | |||||||
| Number of rooms | 1% - 2% | |||||||
| ____________________ | |
| (a) | Includes $70 million of license fees, which reflects the minimum levels outlined in the underlying agreements. |
| (b) | Excludes amortization of acquisition-related intangible assets of $36 - $38 million. |
| (c) | Excludes charges relating to the early extinguishment of debt. |
| (d) | Outlook assumes an effective tax rate of approximately 27%. |
| (e) | Excludes the impact of any share repurchases in 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. |
| (g) | Compared to 2019, outlook represents a 16% decline in global RevPAR. |