Wyndham Hotels & Resorts, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

Segment Information

9 Months Ended

Sep. 30, 2018

The reportable segments presented below represent Wyndham Hotels’ operating segments for which separate financial information is available and is utilized on a regular basis by its chief operating decision maker to assess performance and allocate resources. In identifying its reportable segments, Wyndham Hotels also considers the nature of services provided by its operating segments. Management evaluates the operating results of each of its reportable segments based upon net revenues and “Adjusted EBITDA”, which is defined as net income excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related costs (acquisition-, disposition- or separation-related), foreign currency impacts of highly inflationary countries, stock-based compensation expense, early extinguishment of debt costs and income taxes. Beginning with the third quarter of 2018, Wyndham Hotels’ calculation of Adjusted EBITDA excludes the currency effects of highly inflationary countries. Wyndham Hotels believes that Adjusted EBITDA is a useful measure of performance for its segments which, when considered with U.S. GAAP measures, Wyndham Hotels believes allows a more complete understanding of its operating performance. Wyndham Hotels’ presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.



	Three Months Ended September 30, 2018
	2018					2017
	Net Revenues		Adjusted EBITDA			Net Revenues		Adjusted EBITDA
Hotel Franchising	$	348	$	178		$	258	$	132
Hotel Management	252		5			89		1
Total Reportable Segments	600		183			347		133
Corporate and Other	4		(17		)	—		(9		)
Total Company	$	604	$	166		$	347	$	124

Reconciliation of Net income to Adjusted EBITDA



	Three Months Ended September 30, 2018
	2018		2017
Net income	$	58	$	58
Provision for income taxes	23		42
Depreciation and amortization	30		19
Interest expense, net	24		2
Stock-based compensation	3		2
Separation-related	17		—
Transaction-related, net	7		1
Foreign currency impact of highly inflationary countries	4		—
Adjusted EBITDA	$	166	$	124



	Nine Months Ended September 30, 2018
	2018					2017
	Net Revenues		Adjusted EBITDA			Net Revenues		Adjusted EBITDA
Hotel Franchising	$	840	$	394		$	682	$	321
Hotel Management	497		29			285		15
Total Reportable Segments	1,337		423			967		336
Corporate and Other	4		(41		)	—		(29		)
Total Company	$	1,341	$	382		$	967	$	307

Reconciliation of Net income to Adjusted EBITDA



	Nine Months Ended September 30, 2018
	2018		2017
Net income	$	118	$	138
Provision for income taxes	47		98
Depreciation and amortization	71		56
Interest expense, net	36		5
Stock-based compensation	6		8
Separation-related	63		—
Transaction-related, net	37		1
Foreign currency impact of highly inflationary countries	4		—
Restructuring	—		1
Adjusted EBITDA	$	382	$	307