Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Information
13. SEGMENT INFORMATION
The reportable segments presented below represent the Company’s 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, the Company 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 net interest expense, depreciation and amortization, early extinguishment of debt charges, 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, income taxes and development advance notes amortization. The Company 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. The Company uses this measure 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. The Company’s presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company’s chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.
Three Months Ended September 30,
2021 2020
Net Revenues
Adjusted EBITDA
Net Revenues
Adjusted EBITDA (a)
Hotel Franchising
 $ 337  $ 193  $ 236  $ 119 
Hotel Management
 126  16  101  2 
Total Reportable Segments
 463  209  337  121 
Corporate and Other
 —  (15) —  (18)
Total Company
 $ 463  $ 194  $ 337  $ 103 
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(a)Adjusted EBITDA for 2020 has been recasted to conform with the current year presentation.
The table below is a reconciliation of net income to adjusted EBITDA.
Three Months Ended September 30,
2021
2020 (a)
Net income $ 103  $ 27 
Provision for income taxes 36  15 
Depreciation and amortization 23  24 
Interest expense, net 22  29 
Stock-based compensation expense 7  5 
Development advance notes amortization 3  2 
Foreign currency impact of highly inflationary countries
 —  1 
Adjusted EBITDA
 $ 194  $ 103 
______________________
(a)Adjusted EBITDA for 2020 has been recasted to conform with the current year presentation.