Company Raises Full-Year 2022 Outlook, Board Increases Share Repurchase Authorization by $400 Million, Company Grows System-Wide Rooms by 4% and Development Pipeline by 10%

Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended September 30, 2022.  Highlights include:

  • Global RevPAR grew 12% compared to third quarter 2021 in constant currency.
  • S. RevPAR grew 2% compared to third quarter 2021 and represents 110% of 2019 levels.
  • System-wide rooms grew 4% year-over-year, including 1% of growth in the U.S. and 9% of growth internationally.
  • Development pipeline grew 10% year-over-year to 212,000 rooms and U.S. development signings increased 82%, including 48 new construction projects for the Company’s new extended-stay brand, bringing the total number to 120 since launch in March.
  • Hotel Franchising segment revenues grew 9% year-over-year.
  • Diluted earnings per share of $13 and adjusted diluted earnings per share of $1.21; net income of $101 million and adjusted net income of $108 million.
  • Adjusted EBITDA of $191
  • Year-to-date net cash provided by operating activities of $349 million and free cash flow of $321
  • Returned $161 million to shareholders through $132 million of share repurchases and a quarterly cash dividend of $0.32 per share.

“With our brands delivering record U.S. RevPAR and our global development teams driving net unit growth towards the top end of our initial guidance, we are raising our full-year 2022 outlook.  Despite the broader macro-economic climate, we are confident in the continued resiliency of our franchise model as we continue to invest in the business and generate substantial shareholder returns,” said Geoffrey A. Ballotti, president and chief executive officer.  “This quarter, we grew our development pipeline by 10%, surpassed our full-year development goal for our new extended-stay brand and completed the acquisition of our 23rd brand – Vienna House.  We remain committed to a disciplined capital allocation strategy that will deliver outstanding value to our shareholders, guests, franchisees and team members in any environment.”

Fee-related and other revenues was $375 million compared to $377 million in third quarter 2021, which included $34 million from the Company’s select-service management business and owned hotels – both of which were exited in the first half of this year.  On a comparable basis, fee-related and other revenues increased 9% year-over-year reflecting global constant currency RevPAR growth of 12% and higher license fees.

The Company generated net income of $101 million, or $1.13 per diluted share, compared to $103 million, or $1.09 per diluted share, in third quarter 2021. The decline in net income was primarily due to the exit of the Company’s select-service management business and owned hotels, partially offset by higher adjusted EBITDA in the Company’s hotel franchising segment.  Adjusted EBITDA was $191 million compared to $194 million in third quarter 2021, which included a $10 million contribution from the Company’s select-service management business and owned hotels – both of which were exited in the first half of this year.  On a comparable basis, adjusted EBITDA increased 4% year-over-year reflecting higher fee-related and other revenues, partially offset by a 600 basis point unfavorable timing impact from the marketing fund.

System Size

Rooms

September 30,

2022

September 30,

2021

YOY Change

(bps)

United States

492,900

486,800

130

International

343,100

315,800

860

Global

836,000

802,600

420

The Company's global system grew 4%, reflecting 1% growth in the U.S. and 9% 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 6% and 8%, respectively, as well as 80 basis points of growth globally and 200 basis points internationally from the acquisition of the Vienna House brand.

RevPAR

Third

Quarter 2022

YOY Constant

Currency %

Change

Constant Currency

% Change

vs. 2019

United States

$

59.15

2

%

10

%

International

34.79

46

17

Global

49.17

12

11

Third quarter global RevPAR grew by 12% in constant currency compared to 2021 as the U.S. grew 2% and international grew 46%. Global RevPAR was 111% of 2019 levels in constant currency, with the U.S. at 110% and international at 117%. The increases compared to both 2021 and 2019 were driven primarily by stronger pricing power.

Business Segment Discussion

Revenue

Adjusted EBITDA

Third

Quarter

2022

Third

Quarter

2021

%

Change

Third

Quarter

2022

Third

Quarter

2021

%

Change

Hotel Franchising

$

367

$

337

9

%

$

201

$

193

4

%

Hotel Management

40

126

(68)

7

16

(56)

Corporate and Other

(17)

(15)

(13)

Total Company

$

407

$

463

(12)

$

191

$

194

(2)

Hotel Franchising revenues increased 9% year-over-year to $367 million primarily due to the global RevPAR increase and higher license fees. Hotel Franchising adjusted EBITDA of $201 million increased 4% reflecting the growth in revenues, partially offset by an unfavorable timing impact from the marketing fund, excluding which Hotel Franchising adjusted EBITDA would have increased 12%.

Hotel Management revenues decreased 68% year-over-year to $40 million, including a $54 million decrease in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues decreased $32 million, or 80%, and adjusted EBITDA decreased $9 million reflecting the exit of the Company's select-service management business and owned hotels.

During the third quarter 2022, the Company's marketing fund revenues exceeded expenses by $12 million; while in third quarter 2021, the Company's marketing fund revenues exceeded expenses by $19 million.

Development

The Company awarded 214 new contracts this quarter compared to 151 in the third quarter 2021. On September 30, 2022, the Company's global development pipeline consisted of over 1,600 hotels and over 212,000 rooms, of which approximately 76% is in the midscale and above segments (61% in the U.S.). The pipeline grew 10% year-over-year - 24% in the U.S. and 2% internationally. Approximately 60% of the Company's development pipeline is international and 80% is new construction, of which approximately 36% has broken ground. The pipeline includes 120 new contracts awarded for the Company's new extended-stay brand since its launch in March 2022.

Acquisition of Vienna House

On September 8, 2022, the Company completed the acquisition of the Vienna House brand, adding an upscale and midscale portfolio of over 40 hotels and more than 6,400 rooms to the Company's existing footprint in the EMEA region. The purchase price was $44 million.

Cash and Liquidity

The Company generated year-to-date net cash provided by operating activities of $349 million and free cash flow of $321 million. The Company ended the quarter with a cash balance of $286 million and approximately $1.0 billion in total liquidity.

Share Repurchases and Dividends

During the third quarter, the Company repurchased approximately 2.0 million shares of its common stock for $132 million. In October 2022, the Company's Board of Directors increased the Company's share repurchase authorization by $400 million.

The Company paid common stock dividends of $29 million, or $0.32 per share.

Full-Year 2022 Outlook

The Company is updating its outlook as follows:

Updated Outlook

Prior Outlook

Year-over-year rooms growth

~4%

2% - 4%

Year-over-year global RevPAR growth

14 - 16%

12% - 16%

Fee-related and other revenues

$1.33 - $1.34 billion

$1.29 - $1.32 billion

Adjusted EBITDA

$636 - $644 million

$611 - $631 million

Adjusted net income

$349 - $354 million

$323 - $334 million

Adjusted diluted EPS

$3.84 - $3.89

$3.51 - $3.63

Free cash flow conversion rate (a)

~55%

~55%

____________________

(a)

Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

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.

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

2022

$

272

$

335

$

367

n/a

n/a

2021

209

283

337

$

270

$

1,099

2020

243

182

236

202

863

2019

269

331

379

300

1,279

Adjusted EBITDA (a)

2022

$

155

$

185

$

201

n/a

n/a

2021

105

166

193

$

128

$

592

2020

110

86

119

77

392

2019

115

164

197

153

629

Hotel Management

Net revenues

2022

$

99

$

51

$

40

n/a

n/a

2021

94

123

126

$

122

$

466

2020

167

76

101

94

437

2019

197

201

180

190

768

Adjusted EBITDA

2022

$

20

$

6

$

7

n/a

n/a

2021

5

16

16

$

19

$

57

2020

17

(4)

2

(1)

13

2019

16

16

13

21

66

Corporate and Other

Net revenues

2022

$

$

$

n/a

n/a

2021

$

$

2020

2019

2

1

1

2

6

Adjusted EBITDA

2022

$

(16)

$

(16)

$

(17)

n/a

n/a

2021

(13)

(14)

(15)

$

(16)

$

(59)

2020

(18)

(16)

(18)

(18)

(69)

2019

(18)

(19)

(18)

(19)

(74)

Table 2 (continued)

WYNDHAM HOTELS & RESORTS

HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Full Year

Total Company

Net revenues

2022

$

371

$

386

$

407

n/a

n/a

2021

303

406

463

$

392

$

1,565

2020

410

258

337

296

1,300

2019

468

533

560

492

2,053

Net income/(loss)

2022

$

106

$

92

$

101

n/a

n/a

2021

24

68

103

$

48

$

244

2020

22

(174)

27

(7)

(132)

2019

21

26

45

64

157

Adjusted EBITDA (a)

2022

$

159

$

175

$

191

n/a

n/a

2021

97

168

194

$

131

$

590

2020

109

66

103

58

336

2019

113

161

192

155

621

____________________

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)

Adjusted EBITDA for 2019 and 2020 has been recast to exclude the amortization of development advance notes to be consistent with the presentation adopted in 2021. 

Table 3

WYNDHAM HOTELS & RESORTS

CONDENSED CASH FLOWS

(In millions)

(Unaudited)

Nine Months Ended

September 30,

2022

2021

Operating activities

Net income

$

299

$

195

Depreciation and amortization

58

70

Gain on asset sale, net

(35)

Loss on early extinguishment of debt

2

18

Trade receivables

(1)

(10)

Accounts payable, accrued expenses and other current liabilities

4

18

Deferred revenues

20

14

Payments of development advance notes, net

(36)

(25)

Other, net

38

47

Net cash provided by operating activities

349

327

Investing activities

Property and equipment additions

(28)

(23)

   Proceeds from asset sales, net (a)

263

Acquisition of hotel brand

(44)

Other, net

(1)

2

Net cash provided by/(used in) investing activities

190

(21)

Financing activities

Proceeds from long-term debt

400

45

Payments of long-term debt

(404)

(570)

Dividends to shareholders

(88)

(53)

Repurchases of common stock

(313)

(26)

Other, net

(15)

(2)

Net cash used in financing activities

(420)

(606)

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

(4)

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

115

(300)

Cash, cash equivalents and restricted cash, beginning of period

171

493

Cash, cash equivalents and restricted cash, end of period

$

286

$

193

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,

2022

2021

2022

2021

Net cash provided by operating activities (b)

$

107

$

147

$

349

$

327

Less: Property and equipment additions

(10)

(6)

(28)

(23)

Free cash flow

$

97

$

141

$

321

$

304

____________________

(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)

Third quarter year-over-year decline primarily relates to higher payments of development advance notes and the timing of working capital.

Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)

As of

September 30, 2022

As of

December 31, 2021

Assets

Cash and cash equivalents

$

286

$

171

Trade receivables, net

253

246

Assets held for sale

154

Property and equipment, net

102

106

Goodwill and intangible assets, net

3,135

3,200

Other current and non-current assets

434

392

Total assets

$

4,210

$

4,269

Liabilities and stockholders' equity

Total debt

$

2,078

$

2,084

Other current liabilities

385

376

Deferred income tax liabilities

347

366

Other non-current liabilities

344

354

Total liabilities

3,154

3,180

Total stockholders' equity

1,056

1,089

Total liabilities and stockholders' equity

$

4,210

$

4,269

Our outstanding debt was as follows:

As of

September 30, 2022

As of

December 31, 2021

$750 million revolving credit facility (due April 2027)

$

$

Term loan A (due April 2027)

399

Term loan B (due May 2025)

1,139

1,541

4.375% senior unsecured notes (due August 2028)

494

493

Finance leases

46

50

Total debt

2,078

2,084

Cash and cash equivalents

286

171

Net debt

$

1,792

$

1,913

Our outstanding debt as of September 30, 2022 matures as follows:

Amount

Within 1 year

$

15

Between 1 and 2 years

26

Between 2 and 3 years

1,170

Between 3 and 4 years

37

Between 4 and 5 years

321

Thereafter

509

Total

$

2,078

Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Nine Months Ended September 30,

2022

2021

Change

% Change

Beginning Room Count (January 1)

United States

490,600

487,300

3,300

1 %

International

319,500

308,600

10,900

4

Global

810,100

795,900

14,200

2

Additions

United States

19,600

16,000

3,600

23

   International (a)

32,500

16,500

16,000

97

Global

52,100

32,500

19,600

60

Deletions

United States

(17,300)

(16,500)

(800)

(5)

International

(8,900)

(9,300)

400

4

Global

(26,200)

(25,800)

(400)

(2)

Ending Room Count (September 30)

United States

492,900

486,800

6,100

1

International

343,100

315,800

27,300

9

Global

836,000

802,600

33,400

4 %

As of September 30,

FY 2019

Royalty

Contribution (b)

2022

2021

Change

% Change

System Size

United States

Economy

237,400

244,600

(7,200)

(3 %)

Midscale and Upper Midscale

236,300

223,900

12,400

6

Upscale and Above

19,200

18,300

900

5

Total United States

492,900

486,800

6,100

1 %

86 %

International

   Greater China

158,500

151,100

7,400

5 %

3

Rest of Asia Pacific

29,500

29,000

500

2

1

   Europe, the Middle East and

   Africa (a)

77,900

65,700

12,200

19

4

Canada

39,100

39,700

(600)

(2)

5

Latin America

38,100

30,300

7,800

26

1

Total International

343,100

315,800

27,300

9 %

14

Global

836,000

802,600

33,400

4 %

100 %

____________________

(a)

Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.

(b)

FY 2019 provided to illustrate pre-pandemic results.

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Three Months

Ended

September 30, 2022

Constant Currency

% Change (a)

Three-Year Basis

% Change (b)

Regional RevPAR Growth

United States

Economy

$

51.16

— %

14 %

Midscale and Upper Midscale

64.90

4

8

Upscale and Above

101.21

8

(7)

Total United States

$

59.15

2 %

10 %

International

Greater China

$

14.97

(5 %)

(21 %)

Rest of Asia Pacific

33.34

89

(11)

Europe, the Middle East and Africa

54.93

76

42

Canada

72.55

38

15

Latin America

42.52

143

66

Total International

$

34.79

46 %

17 %

Global

$

49.17

12 %

11 %

Three Months Ended September 30,

2022

2021

% Change

Average Royalty Rate

United States

4.6 %

4.6 %

International

2.1 %

2.2 %

(10 bps)

Global

3.9 %

4.1 %

(20 bps)

Nine Months

Ended

September 30, 2022

Constant Currency

% Change (a)

Three-Year Basis

% Change (b)

Regional RevPAR Growth

United States

Economy

$

44.31

9 %

13 %

Midscale and Upper Midscale

58.03

17

5

Upscale and Above

96.36

34

(7)

Total United States

$

52.32

15 %

8 %

International

Greater China

$

13.84

(13 %)

(27 %)

Rest of Asia Pacific

27.46

43

(23)

Europe, the Middle East and Africa

43.58

121

13

Canada

52.41

60

6

Latin America

36.85

150

45

Total International

$

28.19

50 %

— %

Global

$

42.58

22 %

4 %

Nine Months Ended September 30,

2022

2021

% Change

Average Royalty Rate

United States

4.6 %

4.6 %

International

2.1 %

2.2 %

(10 bps)

Global

4.0 %

4.1 %

(10 bps)

____________________

(a)

International excludes the impact of currency exchange movements.

(b)

Compares 2022 to 2019; international excludes the impact of currency exchange movements.

Table 6

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Full

Year

Hotel Franchising

Global RevPAR

2022

$

33.08

$

43.74

$

48.61

n/a

n/a

2021

$

24.02

$

35.69

$

44.67

$

34.77

$

34.85

2020

$

25.90

$

17.05

$

28.83

$

23.19

$

23.74

2019

$

33.76

$

42.04

$

45.23

$

34.51

$

38.91

U.S. RevPAR

2022

$

41.01

$

54.70

$

58.45

n/a

n/a

2021

$

29.68

$

46.99

$

56.38

$

42.45

$

43.95

2020

$

31.43

$

23.19

$

36.06

$

27.28

$

29.50

2019

$

37.69

$

48.65

$

51.93

$

37.96

$

44.09

International RevPAR

2022

$

21.05

$

26.80

$

33.90

n/a

n/a

2021

$

15.26

$

18.21

$

26.62

$

23.13

$

20.86

2020

$

17.39

$

7.66

$

17.39

$

16.71

$

14.75

2019

$

27.56

$

31.59

$

34.79

$

29.15

$

30.80

Global Rooms (a)

2022

793,200

799,200

816,300

n/a

n/a

2021

748,700

752,500

758,600

769,400

769,400

2020

769,000

754,700

748,200

746,500

746,500

2019

745,300

751,300

758,400

770,200

770,200

U.S. Rooms

2022

486,600

487,600

488,100

n/a

n/a

2021

452,500

454,200

458,000

465,100

465,100

2020

463,900

460,200

459,600

452,600

452,600

2019

454,900

457,600

460,100

464,600

464,600

International Rooms (a)

2022

306,600

311,600

328,200

n/a

n/a

2021

296,200

298,300

300,600

304,300

304,300

2020

305,100

294,500

288,600

293,900

293,900

2019

290,400

293,700

298,300

305,600

305,600

Hotel Management

Global RevPAR

2022

$

56.55

$

65.13

$

71.54

n/a

n/a

2021

$

38.17

$

56.08

$

64.63

$

57.57

$

53.81

2020

$

50.00

$

20.67

$

34.34

$

32.91

$

34.67

2019

$

63.25

$

66.67

$

66.65

$

59.19

$

64.01

U.S. RevPAR

2022

$

69.92

$

135.35

$

126.34

n/a

n/a

2021

$

42.89

$

67.42

$

78.27

$

66.77

$

63.20

2020

$

54.35

$

23.21

$

39.12

$

34.14

$

37.97

2019

$

65.58

$

71.61

$

70.75

$

60.89

$

67.32

International RevPAR

2022

$

40.26

$

40.89

$

53.57

n/a

n/a

2021

$

27.12

$

31.20

$

37.53

$

40.96

$

34.31

2020

$

38.07

$

13.78

$

23.16

$

29.86

$

26.21

2019

$

55.12

$

49.53

$

52.49

$

53.67

$

52.69

Global Rooms

2022

20,100

19,700

19,700

n/a

n/a

2021

48,500

45,500

44,000

40,700

40,700

2020

59,300

58,200

55,800

49,400

49,400

2019

66,800

65,200

63,400

60,800

60,800

U.S. Rooms

2022

5,300

4,800

4,800

n/a

n/a

2021

33,500

30,600

28,800

25,500

25,500

2020

42,900

41,800

38,100

34,700

34,700

2019

51,700

50,700

49,100

45,600

45,600

International Rooms

2022

14,800

14,900

14,900

n/a

n/a

2021

15,000

14,900

15,200

15,200

15,200

2020

16,400

16,400

17,700

14,700

14,700

2019

15,100

14,500

14,300

15,200

15,200

Table 6 (continued)

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Full

Year

Total System

Global RevPAR

2022

$

34.06

$

44.28

$

49.17

n/a

n/a

2021

$

24.90

$

36.92

$

45.80

$

35.99

$

35.95

2020

$

27.68

$

17.31

$

29.23

$

23.84

$

24.51

2019

$

36.21

$

44.06

$

46.94

$

36.36

$

40.92

U.S. RevPAR

2022

$

42.11

$

55.57

$

59.15

n/a

n/a

2021

$

30.62

$

48.37

$

57.73

$

43.84

$

45.19

2020

$

33.45

$

23.19

$

36.31

$

27.80

$

30.20

2019

$

40.56

$

50.98

$

53.79

$

40.09

$

46.39

International RevPAR

2022

$

21.95

$

27.46

$

34.79

n/a

n/a

2021

$

15.83

$

18.84

$

27.15

$

23.99

$

21.52

2020

$

18.45

$

7.96

$

17.72

$

17.37

$

15.35

2019

$

28.92

$

32.47

$

35.63

$

30.29

$

31.85

Global Rooms (a)

2022

813,300

818,900

836,000

n/a

n/a

2021

797,200

798,000

802,600

810,100

810,100

2020

828,300

812,900

804,000

795,900

795,900

2019

812,100

816,600

821,800

831,000

831,000

U.S. Rooms

2022

491,900

492,400

492,900

n/a

n/a

2021

486,000

484,800

486,800

490,600

490,600

2020

506,800

502,000

497,700

487,300

487,300

2019

506,600

508,300

509,200

510,200

510,200

International Rooms (a)

2022

321,400

326,500

343,100

n/a

n/a

2021

311,200

313,200

315,800

319,500

319,500

2020

321,500

310,900

306,300

308,600

308,600

2019

305,500

308,300

312,600

320,800

320,800

____________________

NOTE:

Amounts may not foot due to rounding. Results reflect the reclassification of rooms from the Hotel Management segment to the Hotel Franchising segment related to the CorePoint Lodging asset sales, including approximately 19,000 rooms in first quarter 2022.

(a)

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/(Loss) to Adjusted EBITDA:

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Full

Year

2022

Net income

$

106

$

92

$

101

Provision for income taxes

34

31

38

Depreciation and amortization

24

17

18

Interest expense, net

20

20

21

Early extinguishment of debt (a)

2

Stock-based compensation expense

8

9

8

Development advance notes amortization (b)

3

3

3

Separation-related (income)/expenses (c)

(1)

1

Gain on asset sale, net (d)

(36)

1

Foreign currency impact of highly inflationary countries (e)

1

1

Adjusted EBITDA

$

159

$

175

$

191

2021

Net income

$

24

$

68

$

103

$

48

$

244

Provision for income taxes

11

25

36

19

91

Depreciation and amortization

24

24

23

25

95

Interest expense, net

28

22

22

22

93

Early extinguishment of debt (a)

18

18

Stock-based compensation expense

5

8

7

8

28

Development advance notes amortization (b)

2

2

3

3

11

Impairments, net (f)

6

6

Separation-related expenses (c)

2

1

3

Foreign currency impact of highly inflationary countries (e)

1

1

Adjusted EBITDA

$

97

$

168

$

194

$

131

$

590

2020

Net income/(loss)

$

22

$

(174)

$

27

$

(7)

$

(132)

Provision for/(benefit from) income taxes

9

(48)

15

(2)

(26)

Depreciation and amortization

25

25

24

24

98

Interest expense, net

25

28

29

30

112

Stock-based compensation expense

4

5

5

5

19

Development advance notes amortization (b)

2

2

2

2

9

Impairments, net (f)

206

206

Restructuring costs (g)

13

16

5

34

Transaction-related expenses, net (h)

8

5

12

Separation-related expenses (c)

1

1

2

Foreign currency impact of highly inflationary countries (e)

1

2

Adjusted EBITDA

$

109

$

66

$

103

$

58

$

336

Table 7 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions)

First

Quarter

Second

Quarter

Third

Quarter

Fourth

Quarter

Full

Year

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 (i)

45

45

Contract termination costs (j)

9

34

(1)

42

Restructuring costs (k)

8

8

Transaction-related expenses, net (h)

7

11

12

10

40

Separation-related expenses (c)

21

1

22

Transaction-related item (l)

20

20

Foreign currency impact of highly inflationary countries (e)

1

3

1

5

Adjusted EBITDA

$

113

$

161

$

192

$

155

$

621

___________________

NOTE:

Amounts may not add due to rounding.

(a)

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 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)

Represents net gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort. There was no gain or loss on sale of the Company's Wyndham Grand Rio Mar Resort as the proceeds received approximated adjusted net book value.

(e)

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

(f)

2021 represents a non-cash charge to reduce the carrying values of the Company's owned hotels long-lived assets to their fair value in connection with the Company's Board approval of a plan to sell these assets in 2022. 2020 represents a non-cash charge to reduce the carrying values of certain intangible assets to their fair values principally attributable to higher discount rates primarily resulting from increased share price volatility, partially offset by $3 million of cash proceeds from a previously impaired asset.

(g)

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

(h)

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

(i)

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

(j)

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

(k)

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

(l)

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2022

2021

2022

2021

Diluted earnings per share

$

1.13

$

1.09

$

3.26

$

2.08

Net income

$

101

$

103

$

299

$

195

Adjustments:

     Acquisition-related amortization expense (a)

7

9

25

27

     Early extinguishment of debt (b)

2

18

Foreign currency impact of highly inflationary countries

1

2

1

     Gain on asset sale, net (c)

(35)

Separation-related expenses

1

3

Total adjustments before tax

9

9

(6)

49

     Income tax provision/(benefit) (d)

2

3

(3)

12

Total adjustments after tax

7

6

(3)

37

Adjusted net income

$

108

$

109

$

296

$

232

Adjustments - EPS impact

0.08

0.07

(0.04)

0.39

Adjusted diluted EPS

$

1.21

$

1.16

$

3.22

$

2.47

Diluted weighted average shares outstanding

89.9

94.1

91.7

93.9

___________________

(a)

Reflected in depreciation and amortization on the income statement.

(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.

(c)

Represents net gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort. There was no gain or loss on sale of the Company's Wyndham Grand Rio Mar Resort as the proceeds received approximated adjusted net book value.

(d)

Reflects the estimated tax effects of the adjustments.

Table 8

WYNDHAM HOTELS & RESORTS

2022 OUTLOOK

As of October 25, 2022

(In millions, except per share data)

2022 Outlook

Fee-related and other revenues

$

1,327 - 1,343

Adjusted EBITDA (a)

636 - 644

Depreciation and amortization expense (b)

44 - 46

Development advance notes amortization expense

12

Stock-based compensation expense

32 - 34

Interest expense, net

81 - 83

Adjusted income before income taxes

464 - 472

Income tax expense (c)

115 - 118

Adjusted net income (a)

$

349 - 354

Adjusted diluted EPS

$

3.84 - 3.89

Diluted shares (d)

91.0

Marketing, reservation and loyalty funds (e)

Approx. $20

Capital expenditures

Approx. $40

Development advance notes

Approx. $55

Free cash flow conversion rate (f)

Approx. 55%

Year-over-Year Growth

Global RevPAR (g)

14% - 16%

Number of rooms

~4%

____________________

(a)

Includes $18 million from 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. Net income for full-year 2021 was $244 million. Please see Table 7 for reconciliation.

(b)

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

(c)

Outlook assumes an effective tax rate of approximately 25%.

(d)

Excludes the impact of any share repurchases after September 30, 2022.

(e)

Represents recovery of $49 million investment made by the Company in 2020. Combined with $18 million recovered in 2021, the Company expects to have recaptured $38 million of the $49 million investment, with the remaining $11 million expected to be recaptured in future years.

(f)

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

(g)

Outlook represents global RevPAR growth of 0% to 2% compared to 2019.

Table 1

WYNDHAM HOTELS & RESORTS

INCOME STATEMENT

(In millions, except per share data)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2022

2021

2022

2021

Net revenues

Royalties and franchise fees

$

152

$

144

$

394

$

344

Marketing, reservation and loyalty

159

149

416

353

Management and other fees

3

32

54

82

License and other fees

28

20

74

60

Other

33

32

107

92

Fee-related and other revenues

375

377

1,045

931

Cost reimbursements

32

86

119

242

Net revenues

407

463

1,164

1,173

Expenses

Marketing, reservation and loyalty

147

130

384

327

Operating

20

33

85

92

General and administrative

29

30

88

81

Cost reimbursements

32

86

119

242

Depreciation and amortization

18

23

58

70

Gain on asset sale, net

(35)

Separation-related

1

3

Total expenses

247

302

699

815

Operating income

160

161

465

358

Interest expense, net

21

22

60

73

Early extinguishment of debt

2

18

Income before income taxes

139

139

403

267

Provision for income taxes

38

36

104

72

Net income

$

101

$

103

$

299

$

195

Earnings per share

Basic

$

1.13

$

1.10

$

3.28

$

2.09

Diluted

1.13

1.09

3.26

2.08

Weighted average shares outstanding

Basic

89.5

93.6

91.2

93.5

Diluted

89.9

94.1

91.7

93.9