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Intangible assets as of December 31, 2019 and December 31, 2018 consisted of the following:
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December 31, 2019 |
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December 31, 2018 |
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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 |
$ |
1,539 |
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$ |
1,547 |
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Trademarks (a)
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$ |
1,393 |
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$ |
1,393 |
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Amortized intangible assets: |
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Franchise agreements (b)
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$ |
895 |
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$ |
460 |
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$ |
435 |
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$ |
895 |
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$ |
434 |
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$ |
461 |
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Management agreements (c)
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137 |
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23 |
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114 |
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140 |
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13 |
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127 |
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Trademarks (d)
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3 |
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1 |
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2 |
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5 |
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1 |
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4 |
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Other (e)
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3 |
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1 |
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2 |
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6 |
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4 |
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2 |
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$ |
1,038 |
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$ |
485 |
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$ |
553 |
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$ |
1,046 |
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$ |
452 |
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$ |
594 |
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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 32 years.
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(c) |
Amortized over a period ranging from 7 to 20 with a weighted average life of 14 years.
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(d) |
Amortized over a period of 20 years.
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(e) |
Amortized over a period ranging from 1 to 8 years with a weighted average life of 5 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, 2018 |
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Goodwill Acquired During 2018 |
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2018 Adjustments to Goodwill (a)
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Balance as of December 31, 2018 |
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2019 Adjustments to Goodwill (b)
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Balance as of December 31, 2019 |
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Hotel Franchising |
$ |
385 |
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$ |
1,067 |
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$ |
(3 |
) |
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$ |
1,449 |
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$ |
(8 |
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$ |
1,441 |
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Hotel Management |
38 |
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60 |
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— |
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98 |
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— |
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98 |
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Total |
$ |
423 |
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$ |
1,127 |
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$ |
(3 |
) |
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$ |
1,547 |
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$ |
(8 |
) |
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$ |
1,539 |
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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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(b) |
Includes $8 million related to purchase price adjustments for the La Quinta acquisition in 2018.
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Amortization expense relating to amortizable intangible assets was as follows for the years ended December 31:
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2019 |
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2018 |
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2017 |
Franchise agreements |
$ |
27 |
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$ |
22 |
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$ |
16 |
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Management agreements |
10 |
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7 |
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3 |
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Trademarks |
— |
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1 |
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1 |
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Other |
1 |
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1 |
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— |
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Total (a)
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$ |
38 |
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$ |
31 |
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$ |
20 |
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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, 2019, the Company expects related amortization expense as follows:
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Amount |
2020 |
$ |
37 |
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2021 |
37 |
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2022 |
35 |
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2023 |
35 |
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2024 |
34 |
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