Intangible Assets
Intangible assets consisted of:
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As of December 31, 2018 |
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As of December 31, 2017 |
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Gross
Carrying
Amount |
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Accumulated
Amortization |
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Net
Carrying
Amount |
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Gross
Carrying
Amount |
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Accumulated
Amortization |
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Net
Carrying
Amount |
Unamortized Intangible Assets: |
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Goodwill |
$ |
1,547 |
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$ |
423 |
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Trademarks (a)
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$ |
1,393 |
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$ |
683 |
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Amortized Intangible Assets: |
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Franchise agreements (b)
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$ |
895 |
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$ |
434 |
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$ |
461 |
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$ |
640 |
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$ |
417 |
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$ |
223 |
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Management agreements (c)
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140 |
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13 |
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127 |
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33 |
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8 |
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25 |
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Trademarks (d)
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5 |
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1 |
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4 |
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10 |
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1 |
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9 |
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Other (e)
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6 |
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4 |
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2 |
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6 |
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3 |
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3 |
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$ |
1,046 |
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$ |
452 |
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$ |
594 |
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$ |
689 |
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$ |
429 |
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$ |
260 |
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______________________
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(a) |
Comprised of various trademarks that the Company has acquired. These trademarks are expected to generate future cash flows for an indefinite period of time. |
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(b) |
Amortized over a period ranging from 20 to 40 years with a weighted average life of 31 years.
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(c) |
Amortized over a period ranging from 7 to 22 years with a weighted average life of 15 years.
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(d) |
Amortized over a period of 20 years with a weighted average life of 20 years.
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(e) |
Amortized over a period ranging from 3 to 5 years with a weighted average life of 4 years.
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The changes in the carrying amount of goodwill are as follows:
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Balance as of January 1, 2017 |
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Goodwill Acquired During 2017 |
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Balance as of December 31, 2017 |
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Goodwill Acquired During 2018 |
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Adjustments to Goodwill (a)
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Balance as of December 31, 2018 |
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Hotel Franchising |
$ |
340 |
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$ |
45 |
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$ |
385 |
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$ |
1,067 |
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$ |
(3 |
) |
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$ |
1,449 |
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Hotel Management |
37 |
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1 |
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38 |
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60 |
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— |
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98 |
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Total |
$ |
377 |
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$ |
46 |
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$ |
423 |
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$ |
1,127 |
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$ |
(3 |
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$ |
1,547 |
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______________________
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(a) |
Includes $2 million related to the sale of Knights Inn brand in May 2018.
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Amortization expense relating to amortizable intangible assets was as follows:
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2018 |
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2017 |
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2016 |
Franchise agreements |
$ |
22 |
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$ |
16 |
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$ |
15 |
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Management agreements |
7 |
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3 |
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2 |
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Trademarks |
1 |
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1 |
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— |
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Other |
1 |
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— |
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1 |
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Total (a)
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$ |
31 |
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$ |
20 |
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$ |
18 |
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______________________
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(a) |
Included as a component of depreciation and amortization on the Consolidated and Combined Statements of Income. |
Based on Wyndham Hotels’ amortizable intangible assets as of December 31, 2018, the Company expects related amortization expense as follows:
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Amount |
2019 |
$ |
37 |
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2020 |
37 |
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2021 |
37 |
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2022 |
35 |
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2023 |
34 |
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