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, 2019

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 items (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,
	2019					2018
	Net Revenues		Adjusted EBITDA			Net Revenues		Adjusted EBITDA
Hotel Franchising	$	379	$	195		$	348	$	178
Hotel Management	180		13			252		5
Total Reportable Segments	559		208			600		183
Corporate and Other	1		(18		)	4		(17		)
Total Company	$	560	$	190		$	604	$	166

The table below is a reconciliation of Net income to Adjusted EBITDA.



	Three Months Ended September 30,
	2019		2018
Net income	$	45	$	58
Provision for income taxes	21		23
Depreciation and amortization	26		30
Interest expense, net	25		24
Stock-based compensation	4		3
Contract termination costs	34		—
Transaction-related item	20		—
Separation-related expenses	—		17
Transaction-related expenses, net	12		7
Foreign currency impact of highly inflationary countries	3		4
Adjusted EBITDA	$	190	$	166



	Nine Months Ended September 30,
	2019					2018
	Net Revenues		Adjusted EBITDA			Net Revenues		Adjusted EBITDA
Hotel Franchising	$	979	$	470		$	840	$	394
Hotel Management	578		45			497		29
Total Reportable Segments	1,557		515			1,337		423
Corporate and Other	4		(54		)	4		(41		)
Total Company	$	1,561	$	461		$	1,341	$	382

The table below is a reconciliation of Net income to Adjusted EBITDA.



	Nine Months Ended September 30,
	2019		2018
Net income	$	93	$	118
Provision for income taxes	36		47
Depreciation and amortization	81		71
Interest expense, net	76		36
Stock-based compensation	11		6
Impairment, net	45		—
Contract termination costs	43		—
Transaction-related item	20		—
Separation-related expenses	22		63
Transaction-related expenses, net	30		37
Foreign currency impact of highly inflationary countries	4		4
Adjusted EBITDA	$	461	$	382