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

Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition (Tables)

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Deferred income amounts as of September 30, 2019 and December 31, 2018 are as follows:



	September 30, 2019		December 31, 2018
Deferred initial franchise fee revenue	$	135	$	127
Deferred loyalty program revenue	85		74
Deferred co-branded credit card program revenue	—		30
Deferred hotel management fee revenue	3		21
Deferred other revenue	29		21
Total	$	252	$	273

Schedule of Performance Obligations

The following table summarizes the Company’s remaining performance obligations for the twelve-month periods set forth below:



	10/1/2019- 9/30/2020		10/1/2020- 9/30/2021		10/1/2021- 9/30/2022		Thereafter		Total
Initial franchise fee revenue	$	22	$	14	$	12	$	87	$	135
Loyalty program revenue	53		21		9		2		85
Hotel management fee revenue	2		—		—		1		3
Other revenue	17		3		2		7		29
Total	$	94	$	38	$	23	$	97	$	252

Schedule of Disaggregation of Net Revenues

The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products for each of the Company’s segments:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Hotel Franchising
Royalties and franchise fees	$	136		$	137	$	359	$	326
Marketing, reservation and loyalty	166			151		418		357
License and other revenues from former Parent	35			36		97		79
Other	42			24		105		78
Total Hotel Franchising	379			348		979		840

Hotel Management
Royalties and franchise fees	4			1		9		6
Marketing, reservation and loyalty	1			—		3		2
Hotel management - owned properties	18			17		67		58
Hotel management - managed properties	(6		)	15		21		32
Cost reimbursements	161			219		476		398
Other	2			—		2		1
Total Hotel Management	180			252		578		497

Corporate and Other	1			4		4		4

Net Revenues	$	560		$	604	$	1,561	$	1,341

Capitalized Contract Costs

The Company incurs certain direct and incremental sales commissions costs in order to obtain hotel franchise and management contracts. Such costs are capitalized and subsequently amortized beginning upon hotel opening over the first non-cancellable period of the agreement. In the event an agreement is terminated prior to the end of the first non-cancellable period, any unamortized cost is immediately expensed. In addition, the Company also capitalizes costs associated with the sale and installation of property management systems to our franchisees, which are amortized over the remaining non-cancellable period of the franchise agreement. As of September 30, 2019 and December 31, 2018, capitalized contract costs were $31 million and $24 million, respectively, of which $6 million and $8 million, respectively, were included in other current assets, and $25 million and $16 million, respectively, were included in other non-current assets on its Condensed Consolidated Balance Sheets.