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, 2019

15. SEGMENT INFORMATION

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 and income taxes. 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 uses these measures internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. 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, 2019
Net revenues	$	1,279	$	768	$	6		$	2,053
Adjusted EBITDA	622		66		(75		)	613
Depreciation and amortization	72		26		11			109
Segment assets	3,817		500		216			4,533
Capital expenditures	35		8		7			50

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

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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,
	2019		2018		2017
Net income	$	157	$	162	$	230
Provision for income taxes	50		61		13
Depreciation and amortization	109		99		75
Interest expense, net	100		60		6
Stock-based compensation expense	15		9		11
Impairment, net	45		—		41
Contract termination costs	42		—		—
Transaction-related expenses, net	40		36		3
Separation-related expenses	22		77		3
Transaction-related item	20		—		—
Restructuring costs	8		—		1
Foreign currency impact of highly inflationary countries	5		3		—
Adjusted EBITDA	$	613	$	507	$	383

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



	United States		All Other Countries ^(a)		Total
Year Ended or As of December 31, 2019
Net revenues	$	1,805	$	248	$	2,053
Net long-lived assets	3,619		173		3,792

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

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(a)

Includes U.S. territories.