Transactions With Former Parent |
12 Months Ended | ||||||
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Dec. 31, 2021 | |||||||
| Related Party Transactions [Abstract] | |||||||
| Transactions With Former Parent |
The Company has a number of arrangements with its former Parent for services provided between both parties as described below.
License Agreement and Other Agreements with Former Parent
In connection with the Company’s spin-off, the Company and former Parent entered into long-term exclusive license agreements to retain former Parents’ affiliations with one of the hospitality industry’s top-rated loyalty programs, Wyndham Rewards, as well as to continue to collaborate on inventory-sharing and customer cross-sell initiatives.
In connection with the Company’s license, development and non-competition agreement, the Company recorded license fees from former Parent in the amounts of $90 million, $83 million and $65 million during 2023, 2022 and 2021, respectively. Further, the Company recorded revenues of $15 million, $10 million and $9 million during 2023, 2022 and 2021, respectively, for activities associated with the Wyndham Rewards program. The Company also recorded license fees from a former affiliate of $7 million during 2023 and 2022 and $5 million during 2021. Such fees are recorded within license and other fees on the Consolidated Statements of Income.
Transfer of Former Parent Liabilities and Issuances of Guarantees to Former Parent and Affiliates
Upon the distribution of the Company’s common stock to former Parent stockholders, the Company entered into certain guarantee commitments with its former Parent. These guarantee arrangements relate to certain former Parent contingent tax and other corporate liabilities. The Company assumed and is responsible for one-third of such contingent liabilities while its former Parent is responsible for the remaining two-thirds. The amount of liabilities assumed by the Company in connection with the spin-off was $20 million as of December 31, 2023 and 2022, of which $20 million and $3 million, respectively were included within accrued expenses and other current liabilities and $17 million in 2022 was included within other non-current liabilities on its Consolidated Balance Sheets. In addition, the Company had $3 million of receivables due from former Parent as of both December 31, 2023 and 2022 which were included within current assets on its Consolidated Balance Sheets.
Former Parent’s Sale of its European Vacation Rentals Business
In connection with the sale of the European Vacation Rentals business, the Company was entitled to one-third of the excess of net proceeds from the sale above a pre-set amount. During 2019, the Buyer notified former Parent of certain proposed post-closing adjustments of approximately $44 million which could serve to reduce the net consideration received from the sale of the European Vacation Rentals business. On December 13, 2021, former Parent entered into a settlement agreement, contingent upon regulatory approval, to settle the post-closing adjustment claims for $7 million which was split one-third and two-thirds between the Company and former Parent, respectively. The Company had a $2 million reserve for such settlement as of December 31, 2021. During the third quarter of 2022, the settlement was approved by the regulatory authority and as a result, the Company paid $2 million for its obligation of the settlement and all claims on the Company were dismissed.
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