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

Annual report pursuant to Section 13 and 15(d)

Segment Information

Segment Information

12 Months Ended

Dec. 31, 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 expenses (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, 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.



	Hotel Franchising		Hotel Management		Corporate and Other^(a)			Total
Year Ended or as of December 31, 2018
Net revenues	$	1,135	$	726	$	7		$	1,868
Adjusted EBITDA	515		47		(55		)	507
Depreciation and amortization	72		21		6			99
Segment assets	3,829		580		567			4,976
Capital expenditures	43		27		3			73

Year Ended or as of December 31, 2017
Net revenues	$	897	$	383	$	—		$	1,280
Adjusted EBITDA	402		21		(40		)	383
Depreciation and amortization	59		16		—			75
Segment assets	1,727		400		10			2,137
Capital expenditures	35		11		—			46

Year Ended or as of December 31, 2016
Net revenues	$	881	$	388	$	—		$	1,269
Adjusted EBITDA	400		26		(38		)	388
Depreciation and amortization	58		15		—			73
Segment assets	1,564		427		7			1,998
Capital expenditures	30		12		—			42

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^(a) Includes the elimination of transactions between segments.

Provided below is a reconciliation of Net income to Adjusted EBITDA.



	Year Ended December 31,
	2018		2017		2016
Net income	$	162	$	230	$	176
Provision for income taxes	61		13		118
Depreciation and amortization	99		75		73
Interest expense, net	60		6		1
Stock-based compensation	9		11		10
Separation-related expenses	77		3		—
Transaction-related expenses, net	36		3		1
Foreign currency impact of highly inflationary countries	3		—		—
Impairment expense	—		41		—
Restructuring costs	—		1		2
Contract termination costs	—		—		7
Adjusted EBITDA	$	507	$	383	$	388

The geographic segment information provided below is classified based on the geographic location of Wyndham Hotels’ subsidiaries.



	United States		All Other Countries		Total
Year Ended or As of December 31, 2018
Net revenues	$	1,641	$	227	$	1,868
Net long-lived assets	3,681		179		3,860

Year Ended or As of December 31, 2017
Net revenues	$	1,066	$	214	$	1,280
Net long-lived assets	1,431		185		1,616

Year Ended or As of December 31, 2016
Net revenues	$	1,066	$	203	$	1,269
Net long-lived assets	1,332		204		1,536