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

Quarterly report pursuant to Section 13 or 15(d)

Other Expenses and Charges

Other Expenses and Charges

9 Months Ended

Sep. 30, 2021


14. OTHER EXPENSES AND CHARGES

Separation-related

Separation-related expenses associated with the Company’s spin-off from Wyndham Worldwide were not material for the three months ended September 30, 2021 and September 30, 2020. For the nine months ended September 30, 2021 and 2020, the Company incurred separation-related charges associated with its spin-off of $3 million and $1 million, respectively.

Restructuring

The Company incurred $29 million of charges during the nine months ended September 30, 2020 related to three restructuring initiatives implemented in response to COVID-19. The first quarter of 2020 plan resulted in a reduction of 262 employees for a charge of $13 million. The Company initiated another plan in the second quarter of 2020 to further reduce headcount by 180 employees and to consolidate its corporate facilities, resulting in a charge of $16 million. During the third quarter of 2020, the Company initiated another restructuring plan to further reduce headcount by 186 full and part-time employees, primarily at the Company’s owned hotels, resulting in a charge of less than $1 million. In addition, during the fourth quarter of 2019, the Company had implemented restructuring initiatives, primarily focused on enhancing its organizational efficiency and rationalizing its operations. Below is the activity for the nine months ended September 30, 2020 relating to restructuring activities by plan:


			2020 Activity
	Liability as of December 31, 2019		Costs Recognized		Cash Payments		Other (a)		Liability as of September 30, 2020
2019 Plan
Personnel-related	$	8	$	—	$	(6)	$	(1)	$	1
2020 Plans
Personnel-related	—		23		(17)		(1)		5
Facility-related	—		5		(1)		—		4
Other	—		1		(1)		—		—
Total 2020 Plans	—		29		(19)		(1)		9
Total accrued restructuring	$	8	$	29	$	(25)	$	(2)	$	10

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(a)Represents non-cash payments in Company stock.

The Company did not incur restructuring charges during the three or nine months ended September 30, 2021. Below is the activity for the nine months ended September 30, 2021 relating to all three of the Company’s restructuring plans implemented in 2020:


			2021 Activity
	Liability as of December 31, 2020		Cash Payments		Liability as of September 30, 2021
Personnel-related	$	7	$	(6)	$	1
Facility-related	3		(2)		1
Total accrued restructuring	$	10	$	(8)	$	2

The remaining liability of $2 million as of September 30, 2021 is expected to be primarily paid by the end of 2021.

Impairments, net

As a result of COVID-19 and the significant negative impact it had on travel demand during 2020, the Company reviewed its intangible assets for potential impairment and determined that the carrying value of certain intangible assets were in excess of their fair values. Accordingly, the Company recorded impairment charges of $205 million in the second quarter of 2020, primarily related to certain trademarks and goodwill associated with its owned hotel reporting unit. See Note 6 - Long-Lived Assets for more information. Additionally, in the second quarter of 2020, the Company incurred a $4 million non-cash impairment charge for the write-off of a receivable associated with the expected termination of an unprofitable hotel-management agreement. See Note 11 - Commitments and Contingencies for more information. The Company also recovered cash proceeds of $3 million of a previously impaired asset in the second quarter of 2020. These charges were all reported within impairments, net on the Condensed Consolidated Statement of Income/(Loss).

Transaction-related, net

Transaction-related expenses incurred by the Company were not material during the three months ended September 30, 2020 and $13 million during the nine months ended September 30, 2020. These expenses were primarily related to integration activities for the acquisition of La Quinta. There were no transaction-related expenses incurred in the three or nine months ended September 30, 2021.