PR Newswire | Oct 28, 2020 05:01PM EDT

10/28 16:00 CDT

Wyndham Hotels & Resorts Reports Third Quarter 2020 Results PARSIPPANY, N.J., Oct. 28, 2020

PARSIPPANY, N.J., Oct. 28, 2020 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended September 30, 2020. Highlights include:

* Diluted earnings per share was $0.29, and adjusted diluted earnings per share was $0.36. * Net income was $27 million for the third quarter and adjusted net income was $34 million. * Adjusted EBITDA was $101 million. * Generated $97 million of net cash provided by operating activities and $92 million of free cash flow. * Global comparable RevPAR declined 35% year-over-year. * System-wide rooms declined 2% year-over-year. * Paid quarterly cash dividend of $0.08 per share. * Issued $500 million aggregate principal amount of 4.375% senior unsecured notes in August 2020, due 2028, the net proceeds of which were used in full to repay then-outstanding revolver borrowings.

"In the face of continued industry uncertainty, our leisure-oriented, drive-to franchise business model generated $101 million of adjusted EBITDA and $92 million of free cash flow," said Geoffrey A. Ballotti, president and chief executive officer. "Over 99% of our domestic and over 97% of our global portfolio are open today. RevPAR improved sequentially across the globe, and in the U.S., our economy and midscale brands continued to gain market share. Third quarter room openings also improved sequentially both in the U.S. and internationally and we grew our pipeline by 3% to 185,000 rooms globally. Importantly, we executed 152 hotel agreements, including 23% more domestic conversion signings than the third quarter of 2019. As always, we remain dedicated to supporting our owners around the world during these very challenging times."

Revenues declined from $560 million in the third quarter of 2019 to $337 million in the third quarter of 2020. The decline includes lower pass-through cost-reimbursement revenues of $79 million, which have no impact on adjusted EBITDA, in the Company's hotel management business. Excluding cost-reimbursement revenues, revenues declined $144 million primarily reflecting a 35% decline in comparable RevPAR and the impact from hotels temporarily closed due to COVID-19.

The Company generated net income of $27 million, or $0.29 per diluted share, compared to $45 million, or $0.47 per diluted share, in the third quarter of 2019. The decline in net income of $18 million, or $0.18 per diluted share, was primarily due to the revenue declines, which were partially offset by cost containment initiatives, lower volume-related expenses and the absence of contract termination and transaction-related expenses. 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.

Business Segment Discussion

The following discussion of third quarter operating results focuses on revenue and adjusted EBITDA for each of the Company's segments.

Hotel Franchising

2020 2019 % Change

System size 748,200 758,400 (1)

Global RevPAR $ 28.83 $ 45.23 (36)

Revenue (millions) $ 236 $ 379 (38)

Adjusted EBITDA (millions) 117 195 (40)

The Company's franchised system, which included 8,500 rooms transferred from the hotel management segment related to the CorePoint Lodging asset sales, declined 1% globally. Excluding the transfer, franchised net rooms declined 2% globally, reflecting the Company's previously announced removal of non-compliant and brand detracting rooms, of which approximately 9,000 were removed during the second quarter and approximately 7,900 were removed during the third quarter.

RevPAR declined 36% globally, reflecting a 31% decline in the U.S. and a 50% decline internationally. On a comparable basis, which is in constant currency and excludes hotels temporarily closed due to COVID-19, global RevPAR declined 33%, reflecting a 30% decline in the U.S. and a 43% decline internationally.

Revenues decreased $143 million compared to third quarter 2019 reflecting the impact of COVID-19 on travel demand globally, while a decline in adjusted EBITDA of $78 million was partially mitigated by cost containment initiatives and lower volume-related expenses.

Hotel Management

2020 2019 % Change

System size 55,800 63,400 (12)

Global RevPAR $ 34.34 $ 66.65 (48)

Revenue (millions) $ 101 $ 180 (44)

Adjusted EBITDA (millions) 2 13 N/A

The Company's managed system globally decreased 12%, primarily reflecting the transfer of 8,500 rooms to the hotel franchising segment as a result of CorePoint Lodging asset sales. Excluding the transfer of rooms to the hotel franchising segment, the Company's managed system increased 2% primarily reflecting growth internationally, partially offset by the Company's previously announced removal of approximately 1,300 unprofitable management guarantee hotel rooms during the third quarter.

RevPAR declined 48% globally, including a 45% decline in the U.S. and a 56% decline internationally. On a comparable basis, which excludes hotels temporarily closed due to COVID-19, global RevPAR declined 46%, including a 43% decline in the U.S. and a 51% decline internationally.

Revenues decreased $79 million compared to the prior-year period primarily due to lower cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, revenues were unchanged as the unfavorable impact of COVID-19 on travel demand globally was offset by the absence of a $20 million fee credit recorded as a reduction to hotel-management revenues in the third quarter of 2019, which was considered transaction-related and therefore did not impact Adjusted EBITDA. Adjusted EBITDA declined $11 million as the RevPAR impacts were partially mitigated by cost containment initiatives and lower volume-related expenses.

Development

As of September 30, 2020, the Company's hotel system of approximately 9,000 properties and 804,000 rooms declined 2% year-over-year. During the third quarter of 2020, the Company opened 76 hotels totaling 9,600 rooms, a year-over-year decline of 34% due to delays resulting from the pandemic.

As expected, the Company's global retention rate over the last twelve months declined to 92.6% compared to 94.9% during the same period last year due to the Company's removal of approximately 9,000 non-compliant master franchise rooms in China during the second quarter; and the Company's removal of approximately 9,200 additional non-compliant, unprofitable and brand detracting rooms in the third quarter.

The Company's development pipeline consisted of 1,400 hotels and approximately 185,000 rooms, a 3% decline year-over-year, or a 3% increase sequentially. Approximately 64% of the Company's development pipeline is international and 76% is new construction, of which 33% have broken ground.

Cash and Liquidity

During the third quarter of 2020, the Company's cash balance increased $71 million to $735 million, including the issuance of $500 million of senior unsecured notes bearing interest at 4.375%, the net proceeds of which were used in full to repay then-outstanding revolver borrowings. In addition, the Company made $10 million of special-item cash outlays, primarily reflecting COVID-19 related restructuring payments, during the third quarter. As of September 30, 2020, the total capacity under the Company's revolving credit facility was $501 million and the Company had approximately $1.2 billion in total liquidity.

Dividends

The Company paid common stock dividends of $7 million, or $0.08 per share, in the third quarter of 2020.

Conference Call Information

Wyndham Hotels will hold a conference call with investors to discuss the Company's results and outlook on Thursday, October 29, 2020 at 8:30 a.m. ET. Listeners can access the webcast live through the Company's website at www.investor.wyndhamhotels.com. The conference call may also be accessed by dialing 877 876-9173 and providing the passcode "Wyndham". Listeners are urged to call at least five minutes prior to the scheduled start time. An archive of this webcast will be available on the website for approximately 90 days beginning at noon ET on October 29, 2020. A telephone replay will be available for approximately ten days beginning at noon ET on October 29, 2020 at 800 753-9197.

Presentation of Financial Information

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

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,000 hotels across approximately 90 countries on six continents. Through its network of 804,000 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 20 hotel brands, including Super 8(r), Days Inn(r), Ramada(r), Microtel(r), La Quinta(r), Baymont(r), Wingate(r), AmericInn(r), Hawthorn Suites(r), Trademark Collection(r) and Wyndham(r). Wyndham Hotels & Resorts is also a leading provider of hotel management services. The Company's award-winning Wyndham Rewards loyalty program offers 85 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of federal securities laws, including statements related to Wyndham Hotels' current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures and dividends, restructuring charges and statements related to the COVID-19 pandemic. Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham Hotels makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors,which may cause the actual results, performance or achievements of Wyndham Hotels to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions; the continuation or worsening of the effects from the COVID-19 pandemic, its scope, duration and impact on the Company's business operations, financial results, cash flows and liquidity, as well as the impact on the Company's franchisees and property owners, guests and team members, the hospitality industry and overall demand for travel; the success of the Company's mitigation efforts in response to the COVID-19 pandemic; the Company's performance in any recovery from the COVID-19 pandemic; the performance of financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising and management businesses; the Company's relationships with franchisees and property owners; the impact of war, terrorist activity or political strife; concerns with or threats of pandemics, contagious diseases or health epidemics, including the effects of the COVID-19 pandemic and any resurgence of the virus and actions governments, businesses and individuals take in response to the pandemic, including stay-in-place directives and other travel restrictions; risks related to the acquisition of La Quinta and the Company's relationship with CorePoint Lodging; the Company's ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to the Company's ability to obtain financing and the terms of such financing, including access to liquidity and capital as a result of COVID-19; and the Company's limitations related to share repurchases and ability to pay dividends under its credit facility and the timing and amount of any future dividends, as well as the risks described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

Contacts

Investors: Media:

Matt Capuzzi Dave DeCecco

Senior Vice President, Investor Group Vice President, GlobalRelations Communications

973 753-6453 973 753-7474

ir@wyndham.com WyndhamHotelsNews@wyndham.com

Table 1

WYNDHAM HOTELS & RESORTS

INCOME (LOSS) STATEMENT

(In millions, except per share data)

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Net revenues

Royalties and franchise fees $ 96 $ 140 $ 250 $ 368

Marketing, reservation and loyalty 99 167 288 421

Management and other fees 12 12 50 88

License and other fees 21 35 63 97

Cost reimbursements 82 161 274 476

Other 27 45 79 111

Net revenues 337 560 1,004 1,561

Expenses

Marketing, reservation and loyalty 107 160 311 437

Operating 25 43 82 124

General and administrative 28 33 82 98

Cost reimbursements 82 161 274 476

Depreciation and amortization 24 26 73 81

Impairments, net - - 206 45

Restructuring - - 29 -

Transaction-related, net - 12 13 30

Separation-related - - 1 22

Contract termination - 34 - 43

Total expenses 266 469 1,071 1,356

Operating income/(loss) 71 91 (67) 205

Interest expense, net 29 25 83 76

Income/(loss) before income taxes 42 66 (150) 129

Provision/(benefit) for income taxes 15 21 (25) 36

Net income/(loss) $ 27 $ 45 $ (125) $ 93

Earnings/(loss) per share

Basic $ 0.29 $ 0.47 $ (1.34) $ 0.95

Diluted 0.29 0.47 (1.34) 0.95

Weighted average shares outstanding

Basic 93.3 96.2 93.4 97.0

Diluted 93.4 96.3 93.4 97.2

Table 2

WYNDHAM HOTELS & RESORTS

HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT

The reportable segments presented below represent our operating segments forwhich separate financial information is available and is utilized on a regularbasis by our chief operating decision maker to assess performance and allocateresources. In identifying our reportable segments, we also consider the natureof services provided by our operating segments. Management evaluates theoperating results of each of our reportable segments based upon net revenuesand adjusted EBITDA. We believe that adjusted EBITDA is a useful measure ofperformance for our segments which, when considered with GAAP measures, allowsa more complete understanding of our operating performance. We use thesemeasures internally to assess operating performance, both absolutely and incomparison to other companies, and to make day to day operating decisions,including in the evaluation of selected compensation decisions. Ourpresentation of adjusted EBITDA may not be comparable to similarly-titledmeasures used by other companies.

First Quarter Second Quarter Third Quarter Fourth Quarter Full Year

Hotel Franchising

Net revenues

2020 $ 243 $ 182 $ 236 n/a n/a

2019 269 331 379 300 1,279

2018 203 289 348 295 1,135

Adjusted EBITDA

2020 $ 108 $ 83 $ 117 n/a n/a

2019 113 162 195 151 622

2018 86 129 178 122 515

Hotel Management

Net revenues

2020 $ 167 $ 76 $ 101 n/a n/a

2019 197 201 180 190 768

2018 99 146 252 229 726

Adjusted EBITDA

2020 $ 17 $ (4) $ 2 n/a n/a

2019 16 16 13 21 66

2018 16 8 5 18 47

Corporate and Other

Net revenues

2020 $ - $ - $ - n/a n/a

2019 2 1 1 2 6

2018 - - 4 3 7

Adjusted EBITDA

2020 $ (18) $ (16) $ (18) n/a n/a

2019 (18) (19) (18) (19) (75)

2018 (10) (12) (17) (15) (55)

Total Company

Net revenues

2020 $ 410 $ 258 $ 337 n/a n/a

2019 468 533 560 492 2,053

2018 302 435 604 527 1,868

Net income/(loss)

2020 $ 22 $ (174) $ 27 n/a n/a

2019 21 26 45 64 157

2018 39 21 58 43 162

Adjusted EBITDA

2020 $ 107 $ 63 $ 101 n/a n/a

2019 111 159 190 153 613

2018 92 125 166 125 507

NOTE: Amounts may not add across due to rounding.

See Table 7 for reconciliations of Total Company non-GAAP measures and Table 8for definitions.

Table 3

WYNDHAM HOTELS & RESORTS

CASH FLOWS

(In millions)

(Unaudited)

Nine Months Ended September 30,

2020 2019

Operatingactivities

Net (loss)/ $ (125) $ 93income

Depreciationand 73 81amortization

Impairment (a) 209 45

Payment of taxliabilityassumed in La - (188)Quintaacquisition

Working capitalchanges and (100) (22)other, net

Net cashprovided by 57 9operatingactivities

Investingactivities

Property andequipment (23) (35)additions

Other, net (1) (2)

Net cash usedin investing (24) (37)activities

Financingactivities

Proceeds from 1,244 -borrowings

Principalpayments on (522) (12)long-term debt

Debt issuance (10) -costs

Capitalcontribution - 68from formerParent

Dividends to (45) (84)shareholders

Repurchases of (50) (168)common stock

Other, net (8) (8)

Net cashprovided by/(used in) 609 (204)financingactivities

Effect ofchanges inexchange rates (1) -on cash, cashequivalents andrestricted cash

Net increase/(decrease) incash, cash 641 (232)equivalents andrestricted cash

Cash, cashequivalents andrestricted 94 366cash, beginningof period

Cash, cashequivalents andrestricted $ 735 $ 134cash, end ofperiod

Free Cash Flow:

We define free cash flow to be net cash provided by operating activities lessproperty and equipment additions, which we also refer to as capitalexpenditures. We believe free cash flow to be a useful operating performancemeasure to us and investors to evaluate the ability of our operations togenerate cash for uses other than capital expenditures and, after debt serviceand other obligations, our ability to grow our business through acquisitionsand investments, as well as our ability to return cash to shareholders throughdividends and share repurchases. This non-GAAP measure is not necessarily arepresentation of how we will use excess cash. A limitation of using free cashflow versus the GAAP measure of net cash provided by operating activities as ameans for evaluating Wyndham Hotels is that free cash flow does not representthe total cash movement for the period as detailed in the condensedconsolidated statement of cash flows.

Nine Months Ended September 30,

2020 2019

Net cashprovided by $ 57 $ 9operatingactivities (b)

Less: Propertyand equipment (23) (35)additions

Free cash flow $ 34 $ (26)

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

Includes special-item cash outlays of $58 million in 2020 and 2019,(b) primarily relating to transaction-related and separation-related cash payments, as well as our restructuring initiatives. Additionally, 2019 includes $188 million of payments to tax authorities related to the La Quinta acquisition.

Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)

As of As of September 30, 2020 December 31, 2019

Assets

Cash and cash equivalents $ 735 $ 94

Trade receivables, net 324 304

Property and equipment, net 284 307

Goodwill and intangible assets, net 3,250 3,485

Other current and non-current assets 301 343

Total assets $ 4,894 $ 4,533

Liabilities and stockholders' equity

Total debt $ 2,835 $ 2,122

Other current liabilities 360 441

Deferred income tax liabilities 323 387

Other non-current liabilities 413 371

Total liabilities 3,931 3,321

Total stockholders' equity 963 1,212

Total liabilities and stockholders' equity $ 4,894 $ 4,533

Our outstanding debt as of September 30, 2020 was as follows:

As of As of September 30, 2020 December 31, 2019

$750 million revolving credit facility (due May 2023) $ 234 $ -

Term loan (due May 2025) 1,558 1,568

5.375% senior unsecured notes (due April 2026) 495 494

4.375% senior unsecured notes (due August 2028) 492 -

Finance leases 56 60

Total debt 2,835 2,122

Cash and cash equivalents 735 94

Net debt $ 2,100 $ 2,028

Our outstanding debt as of September 30, 2020 matures as follows:

Amount

Within 1 year $ 21

Between 1 and 2 years 21

Between 2 and 3 years 255

Between 3 and 4 years 22

Between 4 and 5 years 1,500

Thereafter 1,016

Total $ 2,835

Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Nine Months Ended September 30,

2020 2019 Change % Change

Beginning RoomCount (January 1)

United States 510,200 506,100 4,100 1%

International 320,800 303,800 17,000 6

Total 831,000 809,900 21,100 3

Additions

United States 8,400 18,800 (10,400) (55)

International 13,100 23,500 (10,400) (44)

Total 21,500 42,300 (20,800) (49)

Deletions

United States (a) (20,900) (15,700) (5,200) (33)

International (a) (27,600) (14,700) (12,900) (88)(b)

Total (48,500) (30,400) (18,100) (60)

Ending Room Count(September 30)

United States 497,700 509,200 (11,500) (2)

International 306,300 312,600 (6,300) (2)

Total 804,000 821,800 (17,800) (2%)

As of September 30, FY 2019 Royalty Contribution 2020 2019 Change % Change

System Size

United States

Economy 253,000 261,200 (8,200) (3%)

Midscale and 204,900 207,700 (2,800) (1)Upper Midscale

Extended Stay/ 24,200 21,800 2,400 11Lifestyle

Upscale (a) 15,600 18,500 (2,900) (16)

Total United 497,700 509,200 (11,500) (2) 86%States (a)

International

Greater China (a) 142,000 151,400 (9,400) (6) 3(b)

Rest of Asia 27,000 25,300 1,700 7 1Pacific (a)

Europe, theMiddle East and 67,400 66,800 600 1 4Africa (a)

Canada 40,600 40,700 (100) - 5

Latin America 29,300 28,400 900 3 1

Total 306,300 312,600 (6,300) (2) 14International

Global 804,000 821,800 (17,800) (2%) 100%

(a) 2020 reflects the global impact from the Company's removal of approximately 9,200 non-compliant, unprofitable and brand detracting rooms during the third quarter.

(b) 2020 reflects the impact from the Company's removal of approximately 9,000 non-compliant master franchise rooms in China during the second quarter.

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Three Months Ended September 30,

Constant Currency % 2020 2019 % Change Change (a)

Regional RevPAR Growth

United States

Economy $ 33.86 $ 44.97 (25%)

Midscale and Upper Midscale 38.74 58.96 (34)

Extended Stay/Lifestyle 38.35 72.78 (47)

Upscale 41.15 108.23 (62)

Total United States $ 36.31 $ 53.79 (32)

International

Greater China $ 13.26 $ 18.60 (29) (30%)

Rest of Asia Pacific 18.59 40.52 (54) (55)

Europe, the Middle East and Africa 21.93 56.54 (61) (62)

Canada 33.01 62.18 (47) (47)

Latin America 6.84 33.60 (80) (76)

Total International $ 17.72 $ 35.63 (50) (50)

Global $ 29.23 $ 46.94 (38%) (38%)

Average Royalty Rate

United States 4.4% 4.5% (10 bps)

International 2.1% 2.1% -

Global 3.9% 3.8% 10 bps

Nine Months Ended September 30,

Constant Currency % 2020 2019 % Change Change (a)

Regional RevPAR Growth

United States

Economy $ 27.87 $ 39.26 (29%)

Midscale and Upper Midscale 33.34 54.19 (38)

Extended Stay/Lifestyle 35.51 68.59 (48)

Upscale 45.36 103.93 (56)

Total United States $ 30.99 $ 48.52 (36)

International

Greater China $ 8.94 $ 18.32 (51) (51%)

Rest of Asia Pacific 17.87 37.38 (52) (51)

Europe, the Middle East and Africa 20.43 51.88 (61) (60)

Canada 25.28 47.86 (47) (47)

Latin America 12.87 34.08 (62) (56)

Total International $ 14.69 $ 32.39 (55) (54)

Global $ 24.73 $ 42.46 (42%) (41%)

Average Royalty Rate

United States 4.5% 4.5% -

International 2.2% 2.1% 10 bps

Global 4.0% 3.8% 20 bps

(a) 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

2020 $ 25.90 $ 17.05 $ 28.83 n/a n/a

2019 $ 33.76 $ 42.04 $ 45.23 $ 34.51 $ 38.91

2018 $ 32.34 $ 41.07 $ 46.34 $ 35.39 $ 38.86

U.S. RevPAR

2020 $ 31.43 $ 23.19 $ 36.06 n/a n/a

2019 $ 37.69 $ 48.65 $ 51.93 $ 37.96 $ 44.09

2018 $ 34.20 $ 46.17 $ 52.36 $ 38.92 $ 43.04

International RevPAR

2020 $ 17.39 $ 7.66 $ 17.39 n/a n/a

2019 $ 27.56 $ 31.59 $ 34.79 $ 29.15 $ 30.80

2018 $ 29.39 $ 32.85 $ 36.42 $ 29.68 $ 32.09

Global Rooms (a)

2020 769,000 754,700 748,200 n/a n/a

2019 745,300 751,300 758,400 770,200 770,200

2018 697,300 725,700 731,200 742,800 742,800

U.S. Rooms (a)

2020 463,900 460,200 459,600 n/a n/a

2019 454,900 457,600 460,100 464,600 464,600

2018 424,500 450,900 451,100 453,900 453,900

International Rooms (a)

2020 305,100 294,500 288,600 n/a n/a

2019 290,400 293,700 298,300 305,600 305,600

2018 272,800 274,700 280,100 288,900 288,900

Hotel Management

Global RevPAR

2020 $ 50.00 $ 20.67 $ 34.34 n/a n/a

2019 $ 63.25 $ 66.67 $ 66.65 $ 59.19 $ 64.01

2018 $ 77.61 $ 76.52 $ 68.53 $ 61.00 $ 68.72

U.S. RevPAR

2020 $ 54.35 $ 23.21 $ 39.12 n/a n/a

2019 $ 65.58 $ 71.61 $ 70.75 $ 60.89 $ 67.32

2018 $ 94.28 $ 87.43 $ 71.95 $ 61.43 $ 72.76

International RevPAR

2020 $ 38.07 $ 13.78 $ 23.16 n/a n/a

2019 $ 55.12 $ 49.53 $ 52.49 $ 53.67 $ 52.69

2018 $ 61.82 $ 55.08 $ 55.19 $ 59.36 $ 57.84

Global Rooms (b)

2020 59,300 58,200 55,800 n/a n/a

2019 66,800 65,200 63,400 60,800 60,800

2018 25,700 66,700 67,000 67,200 67,200

U.S. Rooms (b)

2020 42,900 41,800 38,100 n/a n/a

2019 51,700 50,700 49,100 45,600 45,600

2018 12,800 53,400 53,300 52,200 52,200

International Rooms

2020 16,400 16,400 17,700 n/a n/a

2019 15,100 14,500 14,300 15,200 15,200

2018 12,900 13,300 13,700 15,000 15,000

Table 6 (continued)

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS

First Quarter Second Quarter Third Quarter Fourth Quarter Full Year

Total System

Global RevPAR

2020 $ 27.68 $ 17.31 $ 29.23 n/a n/a

2019 $ 36.21 $ 44.06 $ 46.94 $ 36.36 $ 40.92

2018 $ 33.95 $ 42.95 $ 48.21 $ 37.54 $ 40.80

U.S. RevPAR

2020 $ 33.45 $ 23.19 $ 36.31 n/a n/a

2019 $ 40.56 $ 50.98 $ 53.79 $ 40.09 $ 46.39

2018 $ 35.91 $ 48.50 $ 54.42 $ 41.28 $ 45.30

International RevPAR

2020 $ 18.45 $ 7.96 $ 17.72 n/a n/a

2019 $ 28.92 $ 32.47 $ 35.63 $ 30.29 $ 31.85

2018 $ 30.90 $ 33.89 $ 37.31 $ 31.08 $ 33.31

Global Rooms

2020 828,300 812,900 804,000 n/a n/a

2019 812,100 816,600 821,800 831,000 831,000

2018 723,000 792,300 798,300 809,900 809,900

U.S. Rooms

2020 506,800 502,000 497,700 n/a n/a

2019 506,600 508,300 509,200 510,200 510,200

2018 437,200 504,300 504,500 506,100 506,100

International Rooms

2020 321,500 310,900 306,300 n/a n/a

2019 305,500 308,300 312,600 320,800 320,800

2018 285,800 288,000 293,800 303,800 303,800

NOTE: Amounts may not foot due to rounding. Beginning with the second quarterof 2018, results reflect the reclassification of rooms from the HotelManagement segment to the Hotel Franchising segment related to the CorePointLodging asset sales.

Second quarter 2018 reflects the addition of 48,200 La Quinta rooms(a) (46,300 U.S. and 1,900 international) acquired in May 2018 and the deletion of 21,300 Knights Inn rooms (20,100 U.S. and 1,200 international) divested in May 2018.

(b) Second quarter 2018 reflects the addition of 40,400 La Quinta rooms in the U.S. acquired in May 2018.

Table 7

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions)

The tables below reconcile certain non-GAAP financial measures. Thepresentation of these adjustments is intended to permit the comparison ofparticular adjustments as they appear in the income statement in order toassist investors' understanding of the overall impact of such adjustments. Webelieve that adjusted EBITDA, adjusted net income and adjusted EPS financialmeasures provide useful information to investors about us and our financialcondition and results of operations because these measures are used by ourmanagement team to evaluate our operating performance and make day-to-dayoperating decisions and adjusted EBITDA is frequently used by securitiesanalysts, investors and other interested parties as a common performancemeasure to compare results or estimate valuations across companies in ourindustry. These measures also assist our investors in evaluating our ongoingoperating performance for the current reporting period and, where provided,over different reporting periods, by adjusting for certain items which may berecurring or non-recurring and which in our view do not necessarily reflectongoing performance. We also internally use these measures to assess ouroperating performance, both absolutely and in comparison to other companies,and in evaluating or making selected compensation decisions. These supplementaldisclosures are in addition to GAAP reported measures. These non-GAAPreconciliation tables should not be considered a substitute for, nor superiorto, financial results and measures determined or calculated in accordance withGAAP.

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

First Quarter Second Quarter Third Quarter Fourth Quarter Full Year

2020

Net income/(loss) $ 22 $ (174) $ 27

Provision/(benefit) 9 (48) 15for income taxes

Depreciation and 25 25 24amortization

Interest expense, 25 28 29net

Stock-based 4 5 5compensation expense

Impairments, net (a) - 206 -

Restructuring costs 13 16 -(b)

Transaction-related 8 5 -expenses, net (c)

Separation-related 1 - -expenses (d)

Foreign currencyimpact of highly - - 1inflationarycountries (e)

Adjusted EBITDA $ 107 $ 63 $ 101

2019

Net income $ 21 $ 26 $ 45 $ 64 $ 157

Provision for income 5 10 21 14 50taxes

Depreciation and 29 27 26 28 109amortization

Interest expense, 24 26 25 25 100net

Stock-based 3 4 4 4 15compensation expense

Impairment, net (f) - 45 - - 45

Contract termination - 9 34 (1) 42costs (g)

Restructuring costs - - - 8 8(h)

Transaction-related 7 11 12 10 40expenses, net (c)

Separation-related 21 1 - - 22expenses (d)

Transaction-related - - 20 - 20item (i)

Foreign currencyimpact of highly 1 - 3 1 5inflationarycountries (e)

Adjusted EBITDA $ 111 $ 159 $ 190 $ 153 $ 613

2018

Net income $ 39 $ 21 $ 58 $ 43 $ 162

Provision for income 16 8 23 14 61taxes

Depreciation and 19 22 30 29 99amortization

Interest expense, 1 10 24 25 60net

Stock-based 3 1 3 2 9compensation expense

Transaction-related 2 28 7 (1) 36expenses, net (c)

Separation-related 12 35 17 14 77expenses (d)

Foreign currencyimpact of highly - - 4 (1) 3inflationarycountries (e)

Adjusted EBITDA $ 92 $ 125 $ 166 $ 125 $ 507

NOTE: Amounts may not add across due to rounding.

Represents a non-cash charge to reduce the carrying values of certain(a) 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.

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

(c) Primarily relates to integration costs incurred in connection with our acquisition of La Quinta.

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

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

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

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

(h) Represents a charge focused on enhancing our organizational efficiency and rationalizing our operations.

(i) Represents the one-time fee credit related to our 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 EPS to Adjusted Net Income andAdjusted Diluted EPS:

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Diluted EPS $ 0.29 $ 0.47 $ (1.34) $ 0.95

Net income/(loss) $ 27 $ 45 $ (125) $ 93

Adjustments:

Impairments, net - - 206 45

Restructuring costs - - 29 -

Transaction-related expenses, net - 12 13 30

Separation-related expenses - - 1 22

Contract termination costs - 34 - 43

Transaction-related item - 20 - 20

Foreign currency impact of highly inflationary countries 1 3 2 4

Acquisition-related amortization expense (a) 9 9 28 28

Total adjustments before tax 10 78 279 192

Income tax provision (b) 3 17 65 46

Total adjustments after tax 7 61 214 146

Adjusted net income $ 34 $ 106 $ 89 $ 239

Adjustments - EPS impact 0.07 0.63 2.30 1.51

Adjusted diluted EPS $ 0.36 $ 1.10 $ 0.96 $ 2.46

Diluted weighted average shares outstanding 93.4 96.3 93.5 97.2

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

(b) Reflects the estimated tax effects of the adjustments.

Table 8WYNDHAM HOTELS & RESORTSDEFINITIONS

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

Adjusted EBITDA: Represents net income (loss) excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), foreign currency impacts of highly inflationary countries, stock-based compensation expense and income taxes. Adjusted EBITDA is a financial measure that is not recognized under U.S. GAAP and should not be considered as an alternative to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, our definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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 RevPAR: Represents RevPAR in constant currency and excluding hotels temporarily closed due to COVID-19 for the period closed and the comparable prior-year period. The use of the term "comparable" or "comparable basis" herein in connection with RevPAR refers to the defined term Comparable RevPAR.

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).

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

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

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

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SOURCE Wyndham Hotels & Resorts