Transactions With Former Parent |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2020 | ||||
| Related Party Transactions [Abstract] | ||||
| Transactions With Former Parent |
The Company has a number of arrangements with its former Parent for services provided between both parties as described below.
License agreement and other agreements with former Parent
In connection with the Company’s spin-off, the Company and Wyndham Worldwide entered into long-term exclusive license agreements to retain Wyndham Destinations’ affiliations with one of the hospitality industry’s top-rated loyalty programs, Wyndham Rewards, as well as to continue to collaborate on inventory-sharing and customer cross-sell initiatives.
The Company also entered into several agreements with Wyndham Destinations that govern the relationship of the parties following the spin-off, including a separation and distribution agreement, an employee matters agreement, a tax matters agreement and a transition services agreement. Revenues recorded in connection with these agreements were not material for the three months ended March 31, 2020 and $2 million for the three months ended March 31, 2019. Such revenues are reported within other revenues on the Condensed Consolidated Statements of Income.
In addition, Wyndham Hotels recorded revenues from Wyndham Destinations in the amount of $17 million and $21 million for a license, development and non-competition agreement and $3 million and $6 million for activities associated with the Wyndham Rewards program for the three months ended March 31, 2020 and 2019, respectively. The Company also recorded revenues from a former affiliate for license fees of $1 million and $2 million for the three months ended March 31, 2020 and 2019, respectively. Such fees are recorded within license and other revenues from former Parent on the Condensed Consolidated Statements of Income.
Transfer of former Parent liabilities and issuances of guarantees to former Parent and affiliates
Upon the distribution of the Company’s common stock to Wyndham Worldwide shareholders, the Company entered into certain guarantee commitments with its former Parent. These guarantee arrangements relate to certain former Parent contingent tax and other corporate liabilities. The Company assumed and is responsible for one-third of such contingent liabilities while its former Parent is responsible for the remaining two-thirds. The amount of liabilities assumed by the Company in connection with the spin-off was $21 million and $22 million as of March 31, 2020 and December 31, 2019, respectively, which were included within other non-current liabilities on its Condensed Consolidated Balance Sheets. The Company also had a $2 million liability due to its former Parent which was included within current liabilities on its Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019. In addition, the Company had $4 million of tax-related receivables due from former Parent as of March 31, 2020 and December 31, 2019, which were included within current assets on its Condensed Consolidated Balance Sheets.
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