PR Newswire | Apr 28, 2021 04:31PM EDT

04/28 15:30 CDT

Wyndham Hotels & Resorts Reports First Quarter 2021 ResultsCompany Updates 2021 Projections PARSIPPANY, N.J., April 28, 2021

PARSIPPANY, N.J., April 28, 2021 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2021. Highlights include:

* Diluted earnings per share was $0.26, and adjusted diluted earnings per share was $0.36. * Net income was $24 million and adjusted net income was $33 million. * Adjusted EBITDA was $97 million. * Generated $64 million of net cash provided by operating activities and $59 million of free cash flow. * Global RevPAR declined 11% compared to first quarter 2020 and 31% compared to first quarter 2019 in constant currency. * Paid quarterly cash dividend of $0.16 per share. * Redeemed all $500 million aggregate principal amount of its outstanding 5.375% Senior Notes due 2026 on April 15, 2021. * Company updates its previous 2021 projections.

"Wyndham's select-service franchise business model delivered a strong start to 2021 as leisure customers hit the road at a pace not experienced since the pandemic started and demand from our everyday business travelers continued to accelerate," said Geoffrey A. Ballotti, president and chief executive officer. "We were very pleased to see our development pipelines grow sequentially, both domestically and internationally, and our room openings and deletions improve year-over-year. We were also encouraged to see conversion room openings increase year-over-year, representing over 70% of total openings this quarter."

Revenues declined from $410 million in the first quarter of 2020 to $303 million in the first quarter of 2021. The decline includes lower pass-through cost-reimbursement revenues of $55 million in the Company's hotel management business, which have no impact on adjusted EBITDA. Excluding cost-reimbursement revenues, revenues declined $52 million primarily reflecting an 11% decline in constant-currency global RevPAR.

The Company generated net income of $24 million, or $0.26 per diluted share, compared to $22 million, or $0.23 per diluted share, in the first quarter of 2020. The increase of $2 million, or $0.03 per diluted share, was a result of the Company's COVID-19 cost mitigation plan implemented in April 2020, lower volume-related expenses and the absence of restructuring and transaction-related expenses, which were partially offset by the global RevPAR decline.

The following discussion of first 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

March 31, 2021 December 31, 2020 YTD Change (bps)

United States 486,000 487,300 (30)

International 311,200 308,600 80

Global 797,200 795,900 20

During the first quarter of 2021, the Company's global system grew 20 basis points reflecting strong growth in the Company's direct-franchising business in China, primarily offset by the impact from supply chain delays on new construction openings in the United States. As expected, terminations normalized in the first quarter and the Company remains solidly on track with its goal of achieving a 95% retention rate for the full year 2021.

RevPAR

First Quarter 2021 First Quarter 2020 First Quarter 2019 YOY % Change % Change vs. 2019

United States $ 30.62 $ 33.45 $ 40.56 (8) (25)

International 15.83 18.45 28.92 (14) (45)

Global 24.90 27.68 36.21 (10) (31)

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 basis) are more meaningful when evaluating trends. On this basis, global RevPAR declined 31% reflecting a 25% decline in the U.S. and a 45% decline internationally. The 25% decline in the U.S. represents continued sequential improvement compared to a decline of 31% in the fourth quarter of 2020. The 45% decline internationally is consistent with the fourth quarter 2020 performance.

Business Segment Results

Revenue Adjusted EBITDA

First Quarter First Quarter % Change First Quarter First Quarter % Change 2021 2020 2021 2020

Hotel Franchising $ 209 $ 243 (14) $ 105 $ 110 (5)

Hotel Management 94 167 (44) 5 17 (71)

Corporate and Other - - - (13) (18) 28

Total Company $ 303 $ 410 (26) $ 97 $ 109 (11)

Hotel Franchising revenues decreased $34 million year-over-year reflecting the global RevPAR decline, while adjusted EBITDA declined $5 million as the impact of the RevPAR decline was almost entirely offset by the Company's COVID-19 cost mitigation plan implemented in April 2020 and lower volume-related expenses.

Hotel Management revenues decreased $73 million year-over-year reflecting a $55 million reduction in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues decreased $18 million due to the global RevPAR decline and lower termination fees. Adjusted EBITDA declined $12 million year-over-year reflecting the revenue decrease, partially offset by lower volume-related expenses.

Development

The Company awarded 112 new contracts this quarter compared to 115 in first quarter 2020 and 124 in first quarter 2019. At March 31, 2021, the Company's development pipeline consisted of approximately 1,400 hotels and approximately 187,000 rooms, growing sequentially by 120 basis points, 70 basis points domestically and 150 basis points internationally. Approximately 64% of the Company's development pipeline is international and 75% is new construction. Approximately 34% of the new construction pipeline under development has broken ground.

Cash and Liquidity

The Company generated $64 million of net cash provided by operating activities in the first quarter of 2021 compared to $17 million in first quarter 2020. Free cash flow was $59 million in the first quarter of 2021 compared to $10 million (which included $15 million of special-item cash outlays) in first quarter 2020.

At March 31, 2021, the Company had $531 million of cash on its balance sheet and $1.3 billion in total liquidity. In April 2021, the Company redeemed all $500 million aggregate principal amount of its outstanding 5.375% senior notes due 2026, which also reduced the Company's total liquidity to approximately $750 million. The Company expects this redemption to reduce its annual cash interest expense by approximately $27 million. Coupled with the issuance of 4.375% senior notes in August of 2020, this redemption effectively returns the Company to pre-pandemic debt and liquidity levels while extending $500 million of maturity by approximately 2.5 years at a 100 basis point (or 19%) lower interest rate.

Dividends

The Company paid common stock dividends of $15 million, or $0.16 per share, in the first quarter of 2021.

2021 Projections

The Company is not providing a complete outlook for full-year 2021 given the RevPAR uncertainties ahead; however, the Company is updating the projections provided in February:

* Net rooms growth of 1% to 2%, consistent with February's projection. * Every point of RevPAR change versus 2020 is now expected to generate approximately $2.8 million of adjusted EBITDA change versus 2020 (increased from $2.5 million per point in February). * License fees are expected to be $70 million reflecting the minimum levels outlined in the underlying agreements, consistent with February's projection. * Marketing, reservation and loyalty expenses are not expected to exceed marketing, reservation and loyalty revenues, consistent with February's projection. As such, the Company expects no meaningful impact to full-year 2021 adjusted EBITDA from the marketing, reservation and loyalty funds. * The Company does not expect any meaningful special-item cash outlays in 2021, consistent with February's projection.

More detailed projections are available in Table 8 of this press release. The Company is providing certain financial metrics only on a non-GAAP basis because, without unreasonable efforts, it is unable to predict with reasonable certainty the occurrence or amount of all of the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

Conference Call Information

Wyndham Hotels will hold a conference call with investors to discuss the Company's results and outlook on Thursday, April 29, 2021 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 877 876-9174 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 beginning at noon ET on April 29, 2021. A telephone replay will be available for approximately ten days beginning at noon ET on April 29, 2021 at 800 723-0549.

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 over 8,900 hotels across nearly 95 countries on six continents. Through its network of over 797,000 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 87 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 the 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 coronavirus pandemic ("COVID-19"). 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," "objective," "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 COVID-19, 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 COVID-19; the Company's performance in any recovery from COVID-19; the performance of the 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, political instability or political strife; concerns with or threats of pandemics, contagious diseases or health epidemics, including the effects of COVID-19 and any resurgence or mutations 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 restructuring or strategic initiatives; risks related to 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 ability to make or pay, plans for, and the timing and amount of any future share repurchases and/or 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 973 753-6590

ir@wyndham.com WyndhamHotelsNews@wyndham.com

Table 1

WYNDHAM HOTELS & RESORTS

INCOME STATEMENT

(In millions, except per share data)

(Unaudited)

Three Months Ended March 31,

2021 2020

Net revenues

Royalties and franchise fees $ 78 $ 92

Marketing, reservation and loyalty 85 106

Management and other fees 19 32

License and other fees 20 21

Cost reimbursements 71 126

Other 30 33

Net revenues 303 410

Expenses

Marketing, reservation and loyalty 92 118

Operating 27 35

General and administrative 24 28

Cost reimbursements 71 126

Depreciation and amortization 24 25

Separation-related 2 1

Restructuring - 13

Transaction-related, net - 8

Total expenses 240 354

Operating income 63 56

Interest expense, net 28 25

Income before income taxes 35 31

Provision for income taxes 11 9

Net income $ 24 $ 22

Earnings per share

Basic $ 0.26 $ 0.23

Diluted 0.26 0.23

Weighted average shares outstanding

Basic 93.4 93.7

Diluted 93.8 93.9

Table 2

WYNDHAM HOTELS & RESORTS

HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT

The reportable segments presented below represent our operatingsegments for which separate financial information is availableand is utilized on a regular basis by our chief operatingdecision maker to assess performance and allocate resources. Inidentifying our reportable segments, we also consider the natureof services provided by our operating segments. Managementevaluates the operating results of each of our reportablesegments based upon net revenues and adjusted EBITDA. We believethat adjusted EBITDA is a useful measure of performance for oursegments which, when considered with GAAP measures, allows a morecomplete understanding of our operating performance. We use thismeasure internally to assess operating performance, bothabsolutely and in comparison to other companies, and to make dayto day operating decisions, including in the evaluation ofselected compensation decisions. Our presentation of adjustedEBITDA may not be comparable to similarly-titled measures used byother companies. During the first quarter of 2021, we modifiedthe definition of adjusted EBITDA to exclude the amortization ofdevelopment advance notes to reflect how our chief operatingdecision maker reviews operating performance beginning in 2021.We have applied the modified definition of adjusted EBITDA to allperiods presented.

First Second Third Fourth Full Quarter Quarter Quarter Quarter Year

Hotel Franchising

Net revenues

2021 $ 209 n/a n/a n/a n/a

2020 243 182 236 202 863

2019 269 331 379 300 1,279

Adjusted EBITDA (a)

2021 $ 105 n/a n/a n/a n/a

2020 110 86 119 77 392

2019 115 164 197 153 629

Hotel Management

Net revenues

2021 $ 94 n/a n/a n/a n/a

2020 167 76 101 94 437

2019 197 201 180 190 768

Adjusted EBITDA

2021 $ 5 n/a n/a n/a n/a

2020 17 (4) 2 (1) 13

2019 16 16 13 21 66

Corporate and Other

Net revenues

2021 $ - n/a n/a n/a n/a

2020 - - - - -

2019 2 1 1 2 6

Adjusted EBITDA

2021 $ (13) n/a n/a n/a n/a

2020 (18) (16) (18) (18) (69)

2019 (18) (19) (18) (19) (74)

Total Company

Net revenues

2021 $ 303 n/a n/a n/a n/a

2020 410 258 337 296 1,300

2019 468 533 560 492 2,053

Net income/(loss)

2021 $ 24 n/a n/a n/a n/a

2020 22 (174) 27 (7) (132)

2019 21 26 45 64 157

Adjusted EBITDA (a)

2021 $ 97 n/a n/a n/a n/a

2020 109 66 103 58 336

2019 113 161 192 155 621

NOTE: Amounts may not add across due to rounding. See Table 7 forreconciliations of Total Company non-GAAP measures and

Table 9 for definitions.

Adjusted EBITDA for 2020 and 2019 has been recast to exclude the(a) amortization of development advance notes to be consistent with the current year presentation.

Table 3

WYNDHAM HOTELS & RESORTS

CONDENSED CASH FLOWS

(In millions)

(Unaudited)

Three Months Ended March 31,

2021 2020

Operating activities

Net income $ 24 $ 22

Depreciation and amortization 24 25

Trade receivables 10 (17)

Accounts payable, accrued expenses and other current liabilities (24) (14)

Deferred revenues 9 (2)

Other, net 21 3

Net cash provided by operating activities 64 17

Investing activities

Property and equipment additions (5) (7)

Net cash used in investing activities (5) (7)

Financing activities

Proceeds from borrowings - 744

Principal payments on long-term debt (4) (14)

Dividends to shareholders (15) (30)

Repurchases of common stock - (50)

Other, net (2) (3)

Net cash (used in)/provided by financing activities (21) 647

Effect of changes in exchange rates on cash, cash equivalents and restricted - (2)cash

Net increase in cash, cash equivalents and restricted cash 38 655

Cash, cash equivalents and restricted cash, beginning of period 493 94

Cash, cash equivalents and restricted cash, end of period $ 531 $ 749

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, to the extent permitted. This non-GAAP measureis not necessarily a representation of how we will use excess cash. Alimitation of using free cash flow versus the GAAP measure of net cash providedby operating activities as a means for evaluating Wyndham Hotels is that freecash flow does not represent the total cash movement for the period as detailedin the condensed consolidated statement of cash flows.

Three Months Ended March 31,

2021 2020

Net cash provided by operating activities $ 64 $ 17

Less: Property and equipment additions (5) (7)

Free cash flow $ 59 $ 10

Adjusted free cash flow (a) n/a $ 25

Reflects the adjustment of $15 million for payments in connection with our(a) acquisition of La Quinta, our spin-off from Wyndham Worldwide and our agreement with CorePoint Lodging for the three months ended March 31, 2020. There are no adjustments in the three months ended March 31, 2021.

Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)

As of As of March 31, 2021 December 31, 2020

Assets

Cash and cash equivalents 531 $ 493

Trade receivables, net 274 295

Property and equipment, net 268 278

Goodwill and intangible assets, net 3,230 3,240

Other current and non-current assets 337 338

Total assets $ 4,640 $ 4,644

Liabilities and stockholders' equity

Total debt $ 2,592 $ 2,597

Other current liabilities 308 325

Deferred income tax liabilities 364 359

Other non-current liabilities 385 400

Total liabilities 3,649 3,681

Total stockholders' equity 991 963

Total liabilities and stockholders' equity $ 4,640 $ 4,644

Our outstanding debt was as follows:

As of As of March 31, 2021 December 31, 2020

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

Term loan (due May 2025) 1,550 1,554

5.375% senior unsecured notes (due April 2026) (a) 496 496

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

Finance leases 54 55

Total debt 2,592 2,597

Cash and cash equivalents 531 493

Net debt $ 2,061 $ 2,104

Our outstanding debt as of March 31, 2021 matures as follows:

Amount

Within 1 year (b) $ 516

Between 1 and 2 years 21

Between 2 and 3 years 22

Between 3 and 4 years 22

Between 4 and 5 years 1,493

Thereafter 518

Total $ 2,592

(a) The Company redeemed these notes on April 15, 2021 primarily with available cash.

(b) Includes 5.375% senior unsecured notes, which we redeemed on April 15, 2021.

Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Three Months Ended March 31,

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 3,500 2,900 600 21

International 4,100 3,300 800 24

Global 7,600 6,200 1,400 23

Deletions

United States (4,800) (6,300) 1,500 24

International (1,500) (2,600) 1,100 42

Global (6,300) (8,900) 2,600 29

Ending Room Count (March 31)

United States 486,000 506,800 (20,800) (4)

International 311,200 321,500 (10,300) (3)

Global 797,200 828,300 (31,100) (4%)

As of March 31, FY 2019 Royalty Contribution (b) 2021 2020 Change % Change (a)

System Size

United States

Economy 249,200 256,800 (7,600) (3%)

Midscale and Upper Midscale 203,400 209,200 (5,800) (3)

Extended Stay/Lifestyle 16,800 23,800 (7,000) (29)

Upscale 16,600 17,000 (400) (2)

Total United States 486,000 506,800 (20,800) (4) 86%

International

Greater China 146,500 153,900 (7,400) (5) 3

Rest of Asia Pacific 27,900 28,600 (700) (2) 1

Europe, the Middle East and Africa 66,500 68,900 (2,400) (3) 4

Canada 40,500 40,800 (300) (1) 5

Latin America 29,800 29,300 500 2 1

Total International 311,200 321,500 (10,300) (3) 14

Global 797,200 828,300 (31,100) (4%) 100%

2021 includes the global impacts from the Company's previously announced(a) termination events in 2020 resulting in the deletion of approximately 26,700 rooms.

(b) FY 2019 provided to illustrate pre-pandemic results.

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS

Three Months Ended March 31,

Constant Currency % Two-Year Basis % 2021 2020 % Change Change (b) Change (a)

Regional RevPAR Growth

United States

Economy $ 27.41 $ 26.74 3% (13%)

Midscale and Upper Midscale 33.12 37.41 (11) (29)

Extended Stay/Lifestyle 37.85 47.68 (21) (33)

Upscale 43.89 74.28 (41) (52)

Total United States $ 30.62 $ 33.45 (8) (25)

International

Greater China $ 13.72 $ 5.34 157 139% (25%)

Rest of Asia Pacific 20.97 26.68 (21) (28) (46)

Europe, the Middle East and Africa 15.66 34.01 (54) (54) (65)

Canada 20.92 29.09 (28) (32) (42)

Latin America 14.60 29.13 (50) (41) (43)

Total International $ 15.83 $ 18.45 (14) (17) (45)

Global $ 24.90 $ 27.68 (10%) (11%) (31%)

Average Royalty Rate

United States 4.6% 4.6% -

International 2.0% 2.2% (20 bps)

Global 4.0% 4.0% -

(a) Excludes the impact of currency exchange movements.

(b) Compares 2021 to 2019; international excludes the impact of currency exchange movements.

Table 6

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS

First Quarter Second Third Fourth Full Quarter Quarter Quarter Year

HotelFranchising

Global RevPAR

2021 $ 24.02 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

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 n/a n/a n/a n/a

2020 321,500 310,900 306,300 308,600 308,600

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

Amounts may not foot due to rounding. Results reflect the reclassification ofNOTE: 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. 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 Second Third Fourth Full Quarter Quarter Quarter Quarter Year

2021

Net income $ 24

Provision for income taxes 11

Depreciation and amortization 24

Interest expense, net 28

Stock-based compensation expense 5

Development advance notes amortization (a) 2

Separation-related expenses (b) 2

Foreign currency impact of highly inflationary countries (c) 1

Adjusted EBITDA $ 97

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 (a) 2 2 2 2 9

Impairments, net (d) - 206 - - 206

Restructuring costs (e) 13 16 - 5 34

Transaction-related expenses, net (f) 8 5 - - 12

Separation-related expenses (b) 1 - - 1 2

Foreign currency impact of highly inflationary countries (c) - - 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 (a) 2 2 2 2 8

Impairment, net (g) - 45 - - 45

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

Restructuring costs (i) - - - 8 8

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

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

Transaction-related item (j) - - 20 - 20

Foreign currency impact of highly inflationary countries (c) 1 - 3 1 5

Adjusted EBITDA $ 113 $ 161 $ 192 $ 155 $ 621

NOTE: Amounts may not add due to rounding.

(a) Represents the non-cash amortization of development advance notes, which is now excluded from adjusted EBITDA to reflect how our chief operating decision maker reviews operating performance.

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

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

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

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

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

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

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

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

(j) 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.

Reconciliation of Adjusted EBITDA Margin:

Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by netrevenues excluding cost reimbursements. The calculation of adjusted EBITDAmargin excludes cost reimbursement revenues, which primarily represent payrollcosts for operational employees at certain of the Company's managed hotels.Although these costs are funded by hotel owners, accounting guidance requiresthe Company to report these costs on a gross basis as both revenues andexpenses. As there are no resultant earnings from these revenues, the Companyexcludes these amounts from the adjusted EBITDA margin calculation.

Three Months Ended March 31,

2021 2019

Net revenues $ 303 $ 468

Less: Cost reimbursements 71 155

Net revenues excluding cost reimbursements $ 232 $ 313

Adjusted EBITDA (see table above) $ 97 $ 113

Adjusted EBITDA margin 42% 36%

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 andAdjusted Diluted EPS:

Three Months Ended March 31,

2021 2020

Diluted EPS $ 0.26 $ 0.23

Net income $ 24 $ 22

Adjustments:

Separation-related expenses 2 1

Restructuring costs - 13

Transaction-related expenses, net - 8

Foreign currency impact of highly inflationary countries 1 -

Acquisition-related amortization expense (a) 9 10

Total adjustments before tax 12 32

Income tax provision (b) 3 7

Total adjustments after tax 9 25

Adjusted net income $ 33 $ 47

Adjustments - EPS impact 0.10 0.27

Adjusted diluted EPS $ 0.36 $ 0.50

Diluted weighted average shares outstanding 93.8 93.9

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

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

Table 8

WYNDHAM HOTELS & RESORTS

2021 PROJECTIONS

As of April 28, 2021

(In millions)

Projections as of Projections as of April 28, 2021 February 10, 2021

Adjusted EBITDA sensitivity to global RevPAR change (a) $ 2.8 per point $ 2.5 per point

License fees (b) $ 70 $ 70

Marketing, reservation and loyalty funds Break even Break even

Depreciation and amortization expense (c) $ 60 - 62 $ 60 - 62

Stock-based compensation expense $ 27 - 29 $ 27 - 29

Interest expense, net (d) $ 94 - 96 $ 113 - 115

Adjusted tax rate 28% 28%

Capital expenditures Approx. $40 Approx. $40

Development advance notes Approx. $40 Approx. $40

Free cash flow conversion rate (e) Approx. 50% Approx. 50%

Diluted shares (f) 94.1 94.1

Year-over-Year Growth

Number of rooms 1% - 2% 1% - 2%

(a) Excludes impacts from license fees and the marketing funds. Change from February reflects better-than-expected results at our two owned hotels and the removal of the conservatism embedded in February's estimate.

(b) Reflects the minimum levels outlined in the underlying agreements.

(c) Excludes amortization of acquisition-related intangible assets of $36 - $38 million.

Change from February reflects the savings achieved in connection with the(d) Company's redemption of the 5.375% senior unsecured notes. Excludes redemption premium and non-cash expenses associated with the early extinguishment of the notes.

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

(f) Excludes the impact of any share repurchases in 2021.

In determining adjusted EBITDA sensitivity to global RevPAR, interest expense,net, the adjusted tax rate and the free cash flow conversion rate, we excludecertain items which are otherwise included in determining the comparable GAAPfinancial measures. We are providing these measures on a non-GAAP basis onlybecause, without unreasonable efforts, we are unable to predict with reasonablecertainty the occurrence or amount of all the adjustments or other potentialadjustments that may arise in the future during the forward-looking period,which can be dependent on future events that may not be reliably predicted.Based on past reported results, where one or more of these items have beenapplicable, such excluded items could be material, individually or in theaggregate, to the reported results.

Table 9

WYNDHAM HOTELS & RESORTS

DEFINITIONS

Adjusted Net Income and Adjusted Diluted EPS: Represents net income (loss) anddiluted earnings (loss) per share excluding acquisition-related amortization,impairment charges, restructuring and related charges, contract terminationcosts, transaction-related items (acquisition-, disposition-, orseparation-related) and foreign currency impacts of highly inflationarycountries. We calculate the income tax effect of the adjustments using anestimated effective tax rate applicable to each adjustment.

Adjusted EBITDA: Represents net income (loss) excluding net interest expense,depreciation and amortization, impairment charges, restructuring and relatedcharges, contract termination costs, transaction-related items (acquisition-,disposition-, or separation-related), foreign currency impacts of highlyinflationary countries, stock-based compensation expense, income taxes anddevelopment advance notes amortization. Adjusted EBITDA is a financial measurethat is not recognized under U.S. GAAP and should not be considered as analternative to net income (loss) or other measures of financial performance orliquidity derived in accordance with U.S. GAAP. In addition, our definition ofadjusted EBITDA may not be comparable to similarly titled measures of othercompanies.

During the first quarter of 2021, we modified the definition of adjusted EBITDAto exclude the amortization of development advance notes to reflect how ourchief operating decision maker reviews operating performance beginning in 2021.We have applied the modified definition of adjusted EBITDA to all periodspresented.

Adjusted Free Cash Flow: Adjusted free cash flow represents free cash flowexcluding special-item cash outlays, which are related to our acquisition of LaQuinta, our spin-off from Wyndham Worldwide and our agreement with CorePointLodging. We believe adjusted free cash flow to be a useful operatingperformance measure to us and investors to evaluate the ability of ouroperations to generate cash for uses other than capital expenditures and, afterdebt service and other obligations, our ability to grow our business throughacquisitions and investments, as well as our ability to return cash toshareholders through dividends and share repurchases, to the extent permitted.This non-GAAP measure is not necessarily a representation of how we will useexcess cash. A limitation of using adjusted free cash flow versus the GAAPmeasure of net cash provided by operating activities as a means for evaluatingWyndham Hotels is that adjusted free cash flow does not represent the totalcash movement for the period as detailed in the consolidated statement of cashflows.

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

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

Constant Currency: Represents a comparison eliminating the effects of foreignexchange rate fluctuations between periods (foreign currency translation) andthe impact caused by any foreign exchange related activities (i.e., hedges,balance sheet remeasurements and/or adjustments).

Free Cash Flow: See Table 3 for definition.

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

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

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

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SOURCE Wyndham Hotels & Resorts