Document and Entity Information
Document and Entity Information Document and Entity Information | 9 Months Ended |
Sep. 30, 2018shares | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | WYNDHAM HOTELS & RESORTS, INC. |
Entity Central Index Key | 1,722,684 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 99,184,320 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net revenues | ||||
Net revenues | $ 604 | $ 347 | $ 1,341 | $ 967 |
Expenses | ||||
Operating | 51 | 46 | 139 | 135 |
General and administrative | 36 | 20 | 85 | 65 |
Depreciation and amortization | 30 | 19 | 71 | 56 |
Separation-related | 17 | 0 | 63 | 0 |
Transaction-related, net | 7 | 1 | 37 | 1 |
Restructuring | 0 | 0 | 0 | 1 |
Total expenses | 499 | 245 | 1,140 | 726 |
Operating income | 105 | 102 | 201 | 241 |
Interest expense, net | 24 | 2 | 36 | 5 |
Income before income taxes | 81 | 100 | 165 | 236 |
Provision for income taxes | 23 | 42 | 47 | 98 |
Net income | $ 58 | $ 58 | $ 118 | $ 138 |
Earnings per share | ||||
Basic (in usd per share) | $ 0.58 | $ 0.58 | $ 1.19 | $ 1.39 |
Diluted (in usd per share) | 0.58 | 0.58 | 1.19 | 1.39 |
Cash dividends declared per share (in usd per share) | $ 0.25 | $ 0 | $ 0.5 | $ 0 |
Royalties and franchise fees | ||||
Net revenues | ||||
Net revenues | $ 138 | $ 107 | $ 332 | $ 277 |
Marketing, reservation and loyalty | ||||
Net revenues | ||||
Net revenues | 151 | 109 | 359 | 282 |
Expenses | ||||
Cost of revenues | 139 | 95 | 347 | 269 |
Hotel management | ||||
Net revenues | ||||
Net revenues | 32 | 22 | 90 | 78 |
License and other revenues from former Parent | ||||
Net revenues | ||||
Net revenues | 36 | 20 | 79 | 56 |
Cost reimbursements | ||||
Net revenues | ||||
Net revenues | 219 | 64 | 398 | 199 |
Expenses | ||||
Cost of revenues | 219 | 64 | 398 | 199 |
Other | ||||
Net revenues | ||||
Net revenues | $ 28 | $ 25 | $ 83 | $ 75 |
Condensed Consolidated and Co_2
Condensed Consolidated and Combined Statements of Comprehensive Income Condensed Consolidated and Combined Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 58 | $ 58 | $ 118 | $ 138 |
Other comprehensive income/(loss), net of tax | ||||
Foreign currency translation adjustments | (4) | 2 | (8) | 5 |
Unrealized gains on cash flow hedges | 5 | 0 | 7 | 0 |
Other comprehensive income/(loss), net of tax | 1 | 2 | (1) | 5 |
Comprehensive income | $ 59 | $ 60 | $ 117 | $ 143 |
Condensed Consolidated and Co_3
Condensed Consolidated and Combined Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 387 | $ 57 |
Trade receivables, net | 309 | 194 |
Prepaid expenses | 41 | 29 |
Other current assets | 113 | 54 |
Total current assets | 850 | 334 |
Property and equipment, net | 331 | 250 |
Goodwill | 1,513 | 423 |
Other non-current assets | 267 | 187 |
Total assets | 4,991 | 2,137 |
Current liabilities: | ||
Current portion of long-term debt | 21 | 0 |
Current portion of debt due to former Parent | 0 | 103 |
Accounts payable | 74 | 38 |
Deferred income | 75 | 84 |
Accrued expenses and other current liabilities | 532 | 186 |
Total current liabilities | 702 | 411 |
Long-term debt | 2,124 | 0 |
Debt due to former Parent | 0 | 81 |
Deferred income taxes | 400 | 173 |
Deferred income | 172 | 164 |
Other non-current liabilities | 150 | 46 |
Total liabilities | 3,548 | 875 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value, authorized 6,000,000 shares, none issued and outstanding | 0 | 0 |
Common stock, $.01 par value, authorized 600,000,000 shares, 100,149,475 issued as of 2018 and none issued and outstanding as of 2017 | 1 | 0 |
Treasury stock, at cost – 1,023,472 shares in 2018 | (59) | 0 |
Additional paid-in capital | 1,446 | 0 |
Retained earnings | 51 | 0 |
Former Parent’s net investment | 0 | 1,257 |
Accumulated other comprehensive income | 4 | 5 |
Total stockholders’ equity | 1,443 | 1,262 |
Total liabilities and equity | 4,991 | 2,137 |
Trademarks, net | ||
Current assets: | ||
Intangible assets, net | 1,445 | 692 |
Franchise agreements and other intangibles, net | ||
Current assets: | ||
Intangible assets, net | $ 585 | $ 251 |
Condensed Consolidated and Co_4
Condensed Consolidated and Combined Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0 |
Preferred stock, authorized (in shares) | 6,000,000 | 0 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0 |
Common stock, shares authorized (in shares) | 600,000,000 | 0 |
Common stock, shares issued (in shares) | 100,149,475 | 0 |
Common stock, shares outstanding (in shares) | 0 | |
Treasury stock, shares (in shares) | 1,023,472 | 0 |
Condensed Consolidated and Co_5
Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 118 | $ 138 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 71 | 56 |
Gain on sale | (23) | 0 |
Deferred income taxes | (11) | 13 |
Stock-based compensation | 17 | 0 |
Net change in assets and liabilities: | ||
Trade receivables | (69) | (27) |
Prepaid expenses | 0 | (2) |
Other current assets | (19) | (2) |
Accounts payable, accrued expenses and other current liabilities | 82 | 2 |
Payment of tax liability assumed in La Quinta acquisition | (35) | 0 |
Deferred income | (29) | (22) |
Payments of development advance notes, net | (11) | (1) |
Other, net | 10 | (3) |
Net cash provided by operating activities | 101 | 152 |
Investing Activities | ||
Property and equipment additions | (55) | (27) |
Acquisition of business, net of cash acquired | (1,696) | 0 |
Proceeds from sale of assets, net | 27 | 0 |
Proceeds from/(issuance of) loans, net | 13 | (20) |
Insurance proceeds | 14 | 0 |
Net cash used in investing activities | (1,697) | (47) |
Financing Activities | ||
Net transfer to former Parent | (38) | (91) |
Proceeds from borrowings from former Parent | 13 | 2 |
Capital lease payments | (2) | (1) |
Proceeds from long-term debt | 2,100 | 0 |
Debt issuance costs | (28) | 0 |
Capital contribution from former Parent | 106 | 0 |
Dividend to former Parent | (90) | 0 |
Dividends to shareholders | (52) | 0 |
Repurchases of common stock | (57) | 0 |
Net share settlement of incentive equity awards | (27) | 0 |
Other, net | (1) | 0 |
Net cash provided by/(used in) financing activities | 1,924 | (90) |
Effect of changes in exchange rates on cash, cash equivalents and restricted cash | 0 | (1) |
Net increase in cash, cash equivalents and restricted cash | 328 | 14 |
Cash, cash equivalents and restricted cash, beginning of period | 59 | 30 |
Cash, cash equivalents and restricted cash, end of period | $ 387 | $ 44 |
Condensed Consolidated and Co_6
Condensed Consolidated and Combined Statements of Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Treasury Stock | Former Parent’s Net Investment | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) |
Beginning balance, shares at Dec. 31, 2016 | 0 | ||||||
Balance as of beginning of period, value at Dec. 31, 2016 | $ 1,085 | $ 0 | $ 0 | $ 1,085 | $ 0 | $ 0 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 138 | 138 | |||||
Other comprehensive loss | 5 | ||||||
Net transfers to former Parent | (91) | (91) | |||||
Ending balance, shares at Sep. 30, 2017 | 0 | ||||||
Balance as of end of period, value at Sep. 30, 2017 | 1,132 | $ 0 | 0 | 1,132 | 0 | 0 | 0 |
Beginning balance, shares at Dec. 31, 2016 | 0 | ||||||
Balance as of beginning of period, value at Dec. 31, 2016 | 1,085 | $ 0 | 0 | 1,085 | 0 | 0 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 230 | ||||||
Ending balance, shares at Dec. 31, 2017 | 0 | ||||||
Balance as of end of period, value at Dec. 31, 2017 | 1,262 | $ 0 | 0 | 1,257 | 0 | 0 | 5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of change in accounting standard | (15) | (15) | |||||
Net income | 118 | 43 | 75 | ||||
Other comprehensive loss | (1) | (1) | |||||
Net transfers to former Parent | (38) | (38) | |||||
Net contribution from former Parent | 233 | 233 | |||||
Dividends | (50) | (25) | (25) | ||||
Transfer of net investment to additional paid-in capital | 0 | (1,455) | 1,455 | ||||
Issuance of common stock (in shares) | 100 | ||||||
Issuance of common stock | 1 | $ 1 | |||||
Net share settlement of incentive equity awards | (27) | (27) | |||||
Repurchase of common stock | (59) | (59) | |||||
Change in deferred compensation | 17 | 17 | |||||
Other | 2 | 1 | 1 | ||||
Ending balance, shares at Sep. 30, 2018 | 100 | ||||||
Balance as of end of period, value at Sep. 30, 2018 | $ 1,443 | $ 1 | $ (59) | $ 0 | $ 1,446 | $ 51 | $ 4 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels” or the “Company”) is a leading global hotel franchisor, licensing its renowned hotel brands to hotel owners in more than 80 countries around the world. Prior to May 31, 2018, the Company was wholly owned by Wyndham Worldwide Corporation (‘‘Wyndham Worldwide’’ and, collectively with its consolidated subsidiaries, ‘‘former Parent’’). In May 2018, the Wyndham Worldwide board of directors approved the spin-off of its hotel franchising and management businesses (“Wyndham Hotels & Resorts Businesses”) through a pro rata distribution of all of the outstanding shares of Wyndham Hotels & Resorts, Inc.’s common stock to Wyndham Worldwide stockholders (the “Distribution”). Pursuant to the Distribution, on May 31, 2018, Wyndham Worldwide stockholders received one share of Wyndham Hotels & Resorts, Inc.’s common stock for each share of Wyndham Worldwide common stock held as of the close of business on May 18, 2018. In conjunction with the Distribution, Wyndham Hotels & Resorts, Inc. underwent an internal reorganization following which it became the holder, directly or through its subsidiaries, of the Wyndham Hotels & Resorts Businesses. Also in conjunction with the Distribution, Wyndham Worldwide Corporation was renamed Wyndham Destinations, Inc. (“Wyndham Destinations”). The Condensed Consolidated and Combined Financial Statements have been prepared on a stand-alone basis and prior to May 31, 2018 are derived from the consolidated financial statements and accounting records of Wyndham Worldwide. The Condensed Consolidated and Combined Financial statements include Wyndham Hotels’ assets, liabilities, revenues, expenses and cash flows and all entities in which Wyndham Hotels has a controlling financial interest. The accompanying Condensed Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in the Condensed Consolidated and Combined Financial Statements. Wyndham Hotels’ Condensed Consolidated and Combined Financial Statements include certain indirect general and administrative costs allocated to it by former Parent for certain functions and services including, but not limited to, executive office, finance and other administrative support. These expenses have been allocated to Wyndham Hotels on the basis of direct usage when identifiable, with the remainder allocated primarily based on its pro-rata share of combined revenues or headcount. Both Wyndham Hotels and former Parent consider the basis on which expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by Wyndham Hotels during the periods presented. In presenting the Condensed Consolidated and Combined Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Condensed Consolidated and Combined Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated and Combined Financial Statements should be read in conjunction with the Company’s 2017 Combined Financial Statements included in Amendment No. 1 to Wyndham Hotels & Resorts, Inc.’s Registration Statement on Form 10, filed with the U.S. Securities and Exchange Commission on April 19, 2018. When evaluating an entity for consolidation, the Company first determines whether an entity is within the scope of the guidance for consolidation of variable interest entities (“VIEs”) and if it is deemed to be a VIE. If the entity is considered to be a VIE, Wyndham Hotels determines whether it would be considered the entity’s primary beneficiary. The Company consolidates those VIEs for which it has determined that it is the primary beneficiary. Wyndham Hotels will consolidate an entity not deemed a VIE upon a determination that it has a controlling financial interest. For entities where Wyndham Hotels does not have a controlling financial interest, the investments in such entities are classified as available-for-sale securities or accounted for using the equity or cost method, as appropriate. Business Description Wyndham Hotels operates in the following segments: • Hotel franchising — licenses the Company’s lodging brands and provides related services to third-party hotel owners and others. • Hotel management — provides hotel management services for full-service and limited-service hotels as well as two hotels that are owned by the Company. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Issued Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which requires companies generally to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company intends to adopt this guidance on January 1, 2019, and is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Simplifying the Test for Goodwill Impairment . In January 2017, the FASB issued guidance which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for the interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued guidance to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, with early adoption permitted. This guidance should be applied on either a retrospective or prospective basis. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, the FASB issued guidance on revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the statement of financial position. The Company adopted the guidance on January 1, 2018 utilizing the full retrospective transition method. This adoption primarily affected the accounting for initial franchise fees, upfront costs, marketing and reservation expenses and loyalty revenues. Specifically, under the new guidance, initial fees are recognized ratably over the life of the noncancelable period of the franchise agreement, and incremental upfront contract costs are deferred and expensed over the life of the noncancelable period of the franchise agreement. Loyalty revenues are deferred and primarily recognized over the loyalty points’ redemption pattern. Additionally, the Company no longer accrues a liability for future marketing and reservation costs when marketing and reservation revenues earned exceed costs incurred. Marketing and reservation costs incurred in excess of revenues earned continue to be expensed as incurred. The tables below summarize the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Income Statement: Year Ended December 31, 2017 Net revenues Previously Reported Balance New Revenue Standard Adjusted Balance Royalties and franchise fees $ 375 $ (11 ) $ 364 Marketing, reservation and loyalty 407 (36 ) 371 Other 118 (20 ) 98 Net revenues 1,347 (67 ) 1,280 Expenses Marketing, reservation and loyalty 406 (33 ) 373 Operating 205 (22 ) 183 Total expenses 1,086 (55 ) 1,031 Income/(loss) before income taxes 255 (12 ) * 243 Provision for income taxes 12 1 * 13 Net income/(loss) 243 (13 ) 230 * The income tax provision consists of (i) a $4 million deferred tax provision resulting from a reduction in deferred tax assets recorded in connection with the retrospective adoption of the new revenue standard and the impact of the lower U.S. corporate income tax rate from the enactment of the U.S. Tax Cuts and Jobs Act and (ii) $3 million tax benefit related to the $12 million loss before income taxes. The table below summarizes the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Balance Sheet: At December 31, 2017 Assets Previously Reported Balance New Revenue Standard Adjusted Balance Other current assets $ 50 $ 4 $ 54 Total current assets 330 4 334 Other non-current assets 176 11 187 Total assets 2,122 15 2,137 Liabilities and net investment Deferred income 79 5 84 Total current liabilities 406 5 411 Deferred income taxes 181 (8 ) 173 Deferred income 76 88 164 Other non-current liabilities 78 (32 ) 46 Total liabilities 822 53 875 Former Parent’s net investment 1,295 (38 ) 1,257 Total liabilities and net investment 2,122 15 2,137 In addition, the cumulative impact from the adoption of the new revenue standard to the Company’s Former Parent’s net investment at January 1, 2016, was a decrease of $29 million . Intra-Entity Transfers of Assets Other Than Inventory . In October 2016, the FASB issued guidance which requires companies to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance requires the modified retrospective approach and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required, which resulted in a cumulative-effect benefit to retained earnings of $15 million . Clarifying the Definition of a Business . In January 2017, the FASB issued guidance clarifying the definition of a business, which assists entities when evaluating whether transactions should be accounted for as acquisitions of businesses or of assets. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. There was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. Compensation - Stock Compensation. In May 2017, the FASB issued guidance which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. There was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. Statement of Cash Flows . In August 2016, the FASB issued guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance requires the retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. The impact of this new guidance resulted in payments of, and proceeds from, development advance notes being recorded within operating activities on its Condensed Consolidated and Combined Statements of Cash Flows. Restricted Cash . In November 2016, the FASB issued guidance which requires amounts generally described as restricted cash be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required, using a retrospective transition method. The impact of this guidance resulted in escrow deposits and restricted cash being included with cash, cash equivalents and restricted cash on the Condensed Consolidated and Combined Statements of Cash Flows. As of September 30, 2018 , there was no restricted cash. As of December 31, 2017, total cash, cash equivalents and restricted cash was $59 million , comprised of $57 million of cash and cash equivalents and $2 million of restricted cash, which is included within other current assets on the Condensed Consolidated and Combined Balance Sheet. Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities. In August 2017, the FASB issued guidance intended to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance will expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance on April 1, 2018 and there was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The principal source of revenues from franchising hotels is ongoing royalty fees, which are typically a percentage of gross room revenues of each franchised hotel. The Company recognizes royalty fee revenues as and when the underlying sales occur. The Company also receives non-refundable initial franchise fees, which are recognized as revenues over the initial non-cancellable period of the franchise agreement, commencing when all material services or conditions have been substantially performed. This occurs when a franchised hotel opens for business or when a franchise agreement is terminated after it has been determined that the franchised hotel will not open. The Company’s franchise agreements also require the payment of marketing and reservation fees, which are intended to reimburse the Company for expenses associated with operating an international, centralized reservation system, e-commerce channels such as the Company’s brand.com websites, as well as access to third-party distribution channels, such as online travel agents, advertising and marketing programs, global sales efforts, operations support, training and other related services. Marketing and reservation fees are recognized as revenue when the underlying sales occur. Although the Company is generally contractually obligated to spend the marketing and reservation fees it collects from franchisees in accordance with the franchise agreements, marketing and reservations costs are expensed as incurred. The Company earns revenues from its Wyndham Rewards loyalty program when a member stays at a participating hotel. These revenues are derived from a fee the Company charges a franchised or managed hotel based upon a percentage of room revenues generated from a Wyndham Rewards member’s stay. These fees are to reimburse the Company for expenses associated with member redemptions and activities that are related to the administering and marketing of the program. Revenues related to the loyalty program represent variable consideration and are recognized net of redemptions over time based upon loyalty point redemption patterns, which include an estimate of loyalty points that will expire or will never be redeemed. The Company earns revenue from its Wyndham Rewards co-branded credit card program, which is primarily generated by cardholder spending and the enrollment of new cardholders. The advance payments received under the program are recognized as a contract liability. The program primarily contains two performance obligations: (i) brand performance services, for which revenue is recognized over the contract term on a straight-line basis, and (ii) issuance and redemption of loyalty points, for which revenue is recognized over time based upon the redemption patterns of the loyalty points earned under the program, including an estimate of loyalty points that will expire or will never be redeemed. The Company provides management services for hotels under management contracts, which offer hotel owners all the benefits of a global brand and a full range of management, marketing and reservation services. In addition to the standard franchise services described above, the Company’s hotel management business provides hotel owners with professional oversight and comprehensive operations support services. The Company’s standard management agreement typically has a term of up to 25 years . The Company’s management fees are comprised of base fees, which are typically a specified percentage of gross revenues from hotel operations, and, in some cases, incentive fees, which are typically a specified percentage of a hotel’s gross operating profit. The base fees are recognized when the underlying sales occur and the management services are performed. Incentive fees are recognized when determinable, which is when the Company has met hotel operating performance metrics and the Company has determined that a significant reversal of revenues recognized will not occur. The Company also recognizes reimbursable payroll costs for operational employees and other reimbursable costs at certain of the Company’s managed hotels as revenue. Although these costs are funded by hotel owners, accounting guidance requires the Company to report these fees on a gross basis as both revenues and expenses. Additionally, the Company recognizes occupancy taxes on a net basis. The Company recognizes license and other revenues from Wyndham Destinations for use of the “Wyndham” trademark and certain other trademarks. In addition, the Company earns revenues from its two owned hotels, which consist primarily of (i) gross room rentals, (ii) food and beverage services and (iii) on-site spa, casino, golf and shop revenues. These revenues are recognized upon the completion of services. Contract Liabilities Contract liabilities generally represent payments or consideration received in advance for goods or services that the Company has not yet provided to the customer. Contract liabilities as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 Deferred initial franchise fee revenue $ 128 $ 116 Deferred loyalty program revenue 74 54 Deferred co-branded credit card programs revenue — 37 Deferred hotel management fee revenue 24 19 Deferred other revenue 21 22 Total $ 247 $ 248 The table above has been revised to include certain deferred revenues that were excluded from the previously reported amounts as of December 31, 2017. Deferred initial franchise fee revenue has been revised from $98 million to $116 million , Deferred other revenue has been revised from $8 million to $22 million , and Total deferred revenue has been revised from $216 million to $248 million . This revision had no effect on the Company’s previously reported combined financial statements as of and for the year ended December 31, 2017. Deferred initial franchise fees represent payments received in advance from prospective franchisees upon the signing of a franchise agreement and are generally recognized to revenue within 12 years. Deferred loyalty revenues represent the portion of loyalty program fees charged to franchisees, net of redemption costs, that have been deferred and will be recognized over time based upon loyalty point redemption patterns. Deferred co-branded credit card program revenue represents payments received in advance from the Company’s co-branded credit card partners primarily for card member activity, which is typically recognized within one year. Capitalized Contract Costs The Company incurs certain direct and incremental sales commissions costs in order to obtain hotel franchise and management contracts. Such costs are capitalized and subsequently amortized upon hotel opening over the first non-cancellable period of the agreement. In the event an agreement is terminated prior to the end of the first non-cancellable period, any unamortized cost is immediately expensed. As of September 30, 2018 and December 31, 2017 , capitalized contract costs were $24 million and $26 million , respectively. Practical Expedients The Company has not adjusted the consideration for the effects of a significant financing component if it expects, at contract inception, that the period between when the Company satisfied the performance obligation and when the customer paid for that good or service was one year or less. For contracts with customers that were modified before the beginning of the earliest reporting period presented, the Company did not retrospectively restate the revenue associated with the contract for those modifications. Instead, it reflected the aggregate effect of all prior modifications in determining (i) the performance obligations and transaction prices and (ii) the allocation of such transaction prices to the performance obligations. Performance Obligations A performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. The consideration received from a customer is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. The following table summarizes the Company’s remaining performance obligations for the twelve-month periods set forth below: 10/1/2018- 9/30/2019 10/1/2019- 9/30/2020 10/1/2020- 9/30/2021 Thereafter Total Initial franchise fee revenue $ 10 $ 14 $ 13 $ 91 $ 128 Loyalty program revenue 46 18 7 3 74 Hotel management fee revenue 2 — 2 20 24 Other revenue 17 1 1 2 21 Total $ 75 $ 33 $ 23 $ 116 $ 247 Disaggregation of Net Revenues The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products for each of the Company’s segments: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Hotel Franchising Royalties and franchise fees $ 137 $ 104 $ 326 $ 271 Marketing, reservation and loyalty 151 109 357 281 License and other revenues from former Parent 36 20 79 56 Other 24 25 78 74 Total Hotel Franchising 348 258 840 682 Hotel Management Royalties and franchise fees 1 3 6 6 Marketing, reservation, and loyalty — — 2 1 Hotel management - owned properties 17 16 58 60 Hotel management - managed properties 15 6 32 18 Cost reimbursements 219 64 398 199 Other — — 1 1 Total Hotel Management 252 89 497 285 Corporate and Other 4 — 4 — Net Revenues $ 604 $ 347 $ 1,341 $ 967 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The computation of basic and diluted earnings per share (“EPS”) is based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. On June 1, 2018, the Company’s separation from Wyndham Worldwide was effected through a tax-free distribution to Wyndham Worldwide’s stockholders of one share of the Company’s common stock for every one share of Wyndham Worldwide common stock held as of the close of business on May 18, 2018. As a result, on June 1, 2018, the Company had 99.5 million shares of common stock outstanding. This share amount is being utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the date of separation. The following table sets forth the computation of basic and diluted EPS (in millions, except per-share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income $ 58 $ 58 $ 118 $ 138 Basic weighted average shares outstanding 99.8 99.8 99.8 99.8 Stock options and restricted stock units (“RSUs”) 0.3 — 0.1 — Diluted weighted average shares outstanding 100.1 99.8 99.9 99.8 Earnings per share: Basic $ 0.58 $ 0.58 $ 1.19 $ 1.39 Diluted 0.58 0.58 1.19 1.39 Dividends: Aggregate dividends paid to shareholders $ 25 $ — $ 52 $ — Stock Repurchase Program On May 9, 2018, the Company’s Board of Directors approved a stock repurchase program, which became effective immediately following the Distribution, under which it is authorized to repurchase up to $300 million of its outstanding common stock. The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data): Shares Cost Average Price Per Share As of May 31, 2018 — $ — $ — For the four months ended September 30, 2018 1.0 59 57.84 As of September 30, 2018 1.0 $ 59 57.84 The Company had $241 million of remaining availability under its program as of September 30, 2018 . |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition Assets acquired and liabilities assumed in business combinations were recorded on the Condensed Consolidated and Combined Balance Sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the Condensed Consolidated and Combined Statements of Income since their respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed was allocated to goodwill. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations may be subject to revision when the Company receives final information, including appraisals and other analyses. Any revisions to the fair values during the allocation period will be recorded by the Company as further adjustments to the purchase price allocations. Although, in certain circumstances, the Company has substantially integrated the operations of its acquired businesses, additional future costs relating to such integration may occur. These costs may result from integrating operating systems, relocating employees, closing facilities, reducing duplicative efforts and exiting and consolidating other activities. These costs will be recorded on the Condensed Consolidated and Combined Statements of Income as expenses. The La Quinta Acquisition On May 30, 2018, the Company completed its previously announced acquisition of La Quinta Holdings Inc.’s hotel franchising and hotel management business (“La Quinta”) for $1.95 billion in cash, which includes $15 million of purchase price that the Company withheld to pay La Quinta employee-related liabilities. The addition of La Quinta’s over 900 franchised hotels and nearly 89,000 rooms increases Wyndham Hotels’ midscale presence and expands its reach further into the upper-midscale segment of the lodging industry. In addition, this transaction expands the Company’s number of managed hotel properties from 116 to more than 430 . This acquisition will strengthen the Company’s position in the midscale and upper-midscale segments of the hotel industry, which has been and continues to be one of the Company’s strategic priorities. In conjunction with the acquisition, stockholders of La Quinta Holdings received $16.80 per share in cash (approximately $1.0 billion in aggregate), and Wyndham Hotels repaid approximately $715 million of La Quinta Holdings’ debt and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta Holdings’ owned real estate assets into CorePoint Lodging, Inc. (“CorePoint”), which occurred immediately prior to the acquisition of La Quinta. Wyndham Hotels financed the $1.95 billion acquisition with proceeds from its $500 million offering of 5.375% senior notes due 2026 completed in April 2018 and a $1.6 billion term loan due 2025 that closed in connection with the acquisition. The preliminary allocation of the purchase price is summarized as follows: Amount Total consideration (a) $ 1,951 Cash withheld to repay La Quinta Holdings Inc.’s estimated tax liability (b) (240 ) Cash withheld to pay employee-related liabilities (15 ) Net cash consideration 1,696 Cash escrowed from CorePoint (c) $ 985 Payment of La Quinta Holdings Inc.’s long‑term debt (c) (985 ) — — Cash utilized to repay La Quinta Holdings Inc.’s long‑term debt (d) (715 ) Net cash consideration (to shareholders of La Quinta Holdings Inc.) $ 981 Total current assets (e) $ 68 Property and equipment 19 Trademarks (f) 759 Franchise agreements (f) 228 Management contracts (f) 137 Other assets 5 Total assets acquired $ 1,216 Total current liabilities (e) $ 105 Deferred income taxes (g) 258 Long‑term debt repaid at acquisition (c) 715 Assumed tax liability (b) 240 Other liabilities 11 Total liabilities assumed 1,329 Net identifiable liabilities acquired (113 ) Goodwill (h) 1,094 Total consideration transferred $ 981 (a) Includes additional consideration of $1 million net debt adjustment paid to CorePoint during the third quarter of 2018. (b) Reflects a portion of the purchase price which is expected to be paid in late 2018 or early 2019 to tax authorities and/or CorePoint. During the third quarter of 2018, the Company paid $35 million related to this liability. As such, the balance at September 30, 2018 was $205 million , which is reported within Accrued expenses and other current liabilities on the Condensed Consolidated and Combined Balance Sheet. (c) As a result of a change in control provision within La Quinta’s long-term indebtedness, CorePoint deposited $985 million into an escrow account which was utilized to repay a portion of La Quinta Holdings Inc.’s existing indebtedness. (d) Reflects the portion of La Quinta Holdings Inc.’s long-term debt that was required to be paid by the Company upon a change in control. (e) The fair values of total current assets and total current liabilities are estimated to approximate their current carrying values. (f) The identifiable intangible assets consist of trademarks with an indefinite life, franchise agreements which have a weighted average life of 25 years and management agreements which have a weighted average life of 15 years . The preliminary fair valuation was performed with the assistance of a third‑party valuation firm, which included the consideration of various valuation techniques that the Company deems appropriate for the measurement of fair value of the assets acquired and liabilities assumed. The final valuation is expected to be completed in late 2018 and may be different from the preliminary results which could result in a change to the fair value of the intangible assets acquired. The preliminary valuations of the franchise agreements and management agreements are based on a discounted cash flow method utilizing forecasted cash flows from La Quinta’s existing franchise agreements and CorePoint franchise agreements and management agreements (the “CorePoint agreements”) that are estimated to be generated over the estimated terms of such contracts. The expected cash flows projections were based on the terms of the agreements, and adjusted for inflation and the costs and expenses required to generate the revenues under such agreements. The significant assumptions that were utilized for La Quinta’s franchise agreements were: (i) forecasted gross room revenues, (ii) a franchise fee of 4.5% , tax affected, and (iii) a discount rate of 9.5% . The significant assumptions that were utilized for the CorePoint agreements were: (i) forecasted gross room revenues, (ii) franchise and management fee rates of 5.0% each, which were tax affected, and (iii) a discount rate of 9.5% and 9.0% for CorePoint franchise and management agreements, respectively. (g) The deferred tax liability primarily results from the fair value adjustments for the identifiable intangible assets. This estimate of deferred tax liabilities was determined based on the book and tax basis differences attributable to the identifiable intangible assets acquired at a combined federal and state effective tax rate. (h) The goodwill recognized in the La Quinta acquisition is not expected to be deductible for income tax purposes. La Quinta’s incremental contributions to Net revenues and Operating income for the three months ended September 30, 2018 were $238 million and $31 million , respectively. Pro forma Net revenues and Operating income would have been $1,694 million and $212 million , respectively, during the nine months ended September 30, 2018, if La Quinta’s historical results had been included in the Company’s Condensed Consolidated and Combined Statement of Operations since January 1, 2018. For 2017, pro forma Net revenues and Net income would have been $2,041 million and $263 million , respectively. This acquisition was assigned to the Company’s Hotel Franchising and Hotel Management segments. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of: As of September 30, 2018 As of December 31, 2017 Gross Accumulated Net Gross Accumulated Net Unamortized Intangible Assets: Goodwill $ 1,513 $ 423 Trademarks $ 1,441 $ 683 Amortized Intangible Assets: Franchise agreements $ 863 $ 427 $ 436 $ 640 $ 417 $ 223 Management agreements 157 11 146 33 8 25 Trademarks 5 1 4 10 1 9 Other 6 3 3 6 3 3 $ 1,031 $ 442 $ 589 $ 689 $ 429 $ 260 The changes in the carrying amount of goodwill are as follows: Balance as of December 31, 2017 Goodwill Acquired During 2018 Adjustments to Goodwill Balance as of September 30, 2018 Hotel Franchising $ 385 $ 1,027 $ (4 ) $ 1,408 Hotel Management 38 67 — 105 Total $ 423 $ 1,094 $ (4 ) $ 1,513 Amortization expense relating to amortizable intangible assets was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Franchise agreements $ 6 $ 4 $ 15 $ 11 Management agreements 3 1 5 2 Other 1 — 2 2 Total * $ 10 $ 5 $ 22 $ 15 * Included as a component of depreciation and amortization on the Condensed Consolidated and Combined Statements of Income. |
Franchising, Marketing and Rese
Franchising, Marketing and Reservation Activities | 9 Months Ended |
Sep. 30, 2018 | |
Franchisors [Abstract] | |
Franchising and Marketing and Reservation Activities | Franchising, Marketing and Reservation Activities Royalties and franchise fee revenues on the Condensed Consolidated and Combined Statements of Income include initial franchise fees of $5 million and $4 million for the three months ended September 30, 2018 and 2017 , respectively, and $14 million and $11 million for the nine months ended September 30, 2018 and 2017 , respectively. In accordance with its franchise agreements, generally Wyndham Hotels is contractually obligated to expend the marketing and reservation fees it collects from franchisees for the operation of an international, centralized, brand-specific reservation system and for marketing purposes such as advertising, promotional and co-marketing programs, and training for the respective franchisees. Additionally, the Company is required to provide certain services to its franchisees, including technology and purchasing programs. The Company may, at its discretion, provide development advance notes to certain franchisees or hotel owners in order to assist them in converting to one of Wyndham Hotels’ brands, building a new hotel to be flagged under one of Wyndham Hotels’ brands or in assisting in other franchisee expansion efforts. Provided the franchisee/hotel owner is in compliance with the terms of the franchise/management agreement, all or a portion of the development advance notes may be forgiven by Wyndham Hotels over the period of the franchise/management agreement, which typically ranges from 10 to 20 years. Otherwise, the related principal is due and payable to Wyndham Hotels. In certain instances, Wyndham Hotels may earn interest on unpaid franchisee development advance notes. Such interest was not significant during the three months ended September 30, 2018 and 2017 , and was $1 million during the nine months ended September 30, 2018 and 2017 . Development advance notes recorded on the Condensed Consolidated and Combined Balance Sheets amounted to $76 million and $64 million as of September 30, 2018 and December 31, 2017 , respectively, and are classified within other non-current assets on the Condensed Consolidated and Combined Balance Sheets. During the three months ended September 30, 2018 and 2017 , the Company recorded $2 million related to the forgiveness of these notes. Further, during the nine months ended September 30, 2018 and 2017 , the Company recorded $5 million related to the forgiveness of these notes. Such amounts are recorded as a reduction of franchise fees on the Condensed Consolidated and Combined Statements of Income. The Company recorded less than $1 million during both the three and nine months ended September 30, 2018 and 2017 of bad debt expenses related to development advance notes. Such expenses were reported within operating expenses on the Condensed Consolidated and Combined Statements of Income. The Company received $1 million and less than $1 million of proceeds from repayment of development advance notes during the three months ended September 30, 2018 and 2017 , and issued $11 million and $1 million of development advance notes during the three months ended September 30, 2018 and 2017 , respectively. The Company received $11 million and $4 million of proceeds from repayment of development advance notes during the nine months ended September 30, 2018 and 2017 , respectively, and issued $22 million and $5 million of development advance notes during the nine months ended September 30, 2018 and 2017 , respectively. These amounts are reflected net in operating activities on the Condensed Consolidated and Combined Statements of Cash Flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files income tax returns in the U.S. federal and state jurisdictions, as well as in foreign jurisdictions. The Company was part of a consolidated U.S. federal income tax return and consolidated and combined state returns through the date of Distribution with its former Parent and other subsidiaries that are not included in its Condensed Combined Financial Statements. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2014, as part of the Company’s former Parent’s filings. The Company is no longer subject to state and local, or foreign, income tax examinations for years prior to 2009. During the nine months ended September 30, 2018 and 2017 , the Company's former Parent paid $27 million and $75 million , respectively, of federal and state income tax liabilities related to the Company, which is reflected in its Condensed Consolidated and Combined Financial Statements as an increase to former Parent’s net investment. In the four months following the Distribution, the Company made federal and state income tax payments, net of refunds, in the amount of $27 million , excluding any assumed La Quinta tax liabilities. Additionally, the Company made foreign income tax payments, net of refunds, in the amount of $9 million during the nine months ended September 30, 2018 and 2017 . The Company’s effective tax rates were 28.4% and 42.0% during the three months ended September 30, 2018 and 2017 , respectively. The decrease was principally due to the reduction in the corporate income tax rate resulting from the enactment of the U.S. Tax Cuts and Jobs Act. The Company’s effective tax rates were 28.5% and 41.5% during the nine months ended September 30, 2018 and 2017, respectively. The decrease was principally due to the reduction in the corporate income tax rate resulting from the enactment of the U.S. Tax Cuts and Jobs Act. The Company did not make any additional measurement-period adjustments related to the impact from the U.S. Tax Cuts and Jobs Act recorded for 2017 during third quarter. The Company was part of its former Parent’s consolidated 2017 U.S. federal income tax return that was filed during the fourth quarter 2018 and will be part of consolidated and combined returns for other jurisdictions that will be filed in the fourth quarter. As a result, the Company will be analyzing the impact on its estimates from the U.S. Tax Cuts and Jobs Act recorded in 2017, and expects to record any required adjustments during the fourth quarter of 2018. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Wyndham Hotels measures its financial assets and liabilities at fair value on a recurring basis and utilizes the fair value hierarchy to determine such fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable. Level 3: Unobservable inputs used when little or no market data is available. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input (closest to Level 3) that is significant to the fair value measurement. Wyndham Hotels’ assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The fair value of financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The carrying amounts of cash and cash equivalents, trade receivables, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The carrying amounts and estimated fair values of all other financial instruments are as follows: September 30, 2018 Carrying Amount Estimated Fair Value Debt Total debt $ 2,145 $ 2,176 The Company estimates the fair value of its debt, excluding capital leases, using Level 2 inputs based on indicative bids from investment banks or quoted market prices. Financial Instruments Changes in interest rates and foreign exchange rates expose Wyndham Hotels to market risk. The Company also uses cash flow hedges as part of its overall strategy to manage its exposure to market risks associated with fluctuations in interest rates and foreign currency exchange rates. As a matter of policy, the Company only enters into transactions that it believes will be highly effective at offsetting the underlying risk, and it does not use derivatives for trading or speculative purposes. Foreign Currency Risk The Company has foreign currency rate exposure to exchange rate fluctuations worldwide particularly with respect to the Canadian Dollar, the Chinese Yuan, the Euro, the British Pound and the Argentine Peso. The Company uses foreign currency forward contracts at various times to manage and reduce the foreign currency exchange rate risk associated with its foreign currency denominated receivables and payables, forecasted royalties, and forecasted earnings and cash flows of foreign subsidiaries and other transactions. Losses recognized in income from freestanding foreign currency exchange contracts were $3 million and $2 million for the nine months ended September 30, 2018 and 2017 , respectively. As required, the Company began accounting for Argentina as a highly inflationary economy as of July 1, 2018. The Company incurred $4 million in foreign currency exchange losses related to Argentina during the three and nine months ended September 30, 2018. Such losses are included in operating expenses in the Condensed Consolidated and Combined Statements of Income. Credit Risk and Exposure The Company is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and often by requiring collateral in instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amounts at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties. As of September 30, 2018 , Wyndham Hotels had $40 million of management guarantee receivables related to hotel management agreements that provides the owner of the hotels with a guarantee of a certain level of profitability based upon various metrics. The collectability of these receivables is contingent on the future profitability of the managed hotels subject to the management agreements. See Note 11 - Commitments and Contingencies for further detail. |
Long-Term Debt and Borrowing Ar
Long-Term Debt and Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Borrowing Arrangements | Long-Term Debt and Borrowing Arrangements The Company’s indebtedness consisted of: September 30, 2018 December 31, 2017 Long-term debt: * $750 million revolving credit facility (due May 2023) $ — $ — Term loan (due May 2025) 1,585 — 5.375% senior unsecured notes (due April 2026) 493 — Capital leases 67 — Debt due to former Parent — 184 Total long-term debt 2,145 184 Less: Current portion of long-term debt 21 103 Long-term debt $ 2,124 $ 81 * The carrying amount of the term loan and senior unsecured notes are net of debt issuance costs of $21 million as of September 30, 2018. Maturities and Capacity The Company’s outstanding debt as of September 30, 2018 matures as follows: Long-Term Debt Within 1 year $ 21 Between 1 and 2 years 21 Between 2 and 3 years 21 Between 3 and 4 years 21 Between 4 and 5 years 21 Thereafter 2,040 Total $ 2,145 As of September 30, 2018, the available capacity under the Company’s revolving credit facility was as follows: Revolving Credit Facility Total capacity $ 750 Less: Letters of credit 14 Available capacity $ 736 Long-Term Debt $750 million Revolving Credit Facility . During May 2018, the Company entered into an agreement for a $750 million revolving credit facility expiring in May 2023. This facility is subject to an interest rate per annum equal to, at Wyndham Hotels’ option, either a base rate plus a margin ranging from 0.50% to 1.00% or LIBOR plus a margin ranging from 1.50% to 2.00% , in either case based upon the total leverage ratio of the Company and its restricted subsidiaries. In addition, Wyndham Hotels will pay a commitment fee on the unused portion of the revolving credit facility of 0.20% per annum. $1.6 billion Term Loan Agreement . During May 2018, the Company entered a credit agreement for a $1.6 billion term loan (“Term Loan”) expiring in May 2025. The interest rate per annum applicable to the Term Loan is equal to, at the Company’s option, either a base rate plus a margin of 0.75% or LIBOR plus a margin of 1.75% . The LIBOR rate with respect to the Term Loan is subject to a “floor” of 0.00% . The Term Loan will amortize in equal quarterly installments beginning in the fourth quarter of 2018 in aggregate annual amounts equal to 1.00% of the original principal amount thereof. The Term Loan is subject to standard mandatory prepayment provisions including (i) 100% of the net cash proceeds from issuances or incurrence of debt by Wyndham Hotels or any of its restricted subsidiaries (other than with respect to certain permitted indebtedness); (ii) 100% (with step-downs to 50% and 0% based upon achievement of specified first-lien leverage ratios) of the net cash proceeds from certain sales or other dispositions of assets by Wyndham Hotels or any of its restricted subsidiaries in excess of a certain amount and subject to customary reinvestment provisions and certain other exceptions; and (iii) 50% (with step-downs to 25% and 0% based upon achievement of specified first-lien leverage ratios) of annual (commencing with the 2019 fiscal year) excess cash flow of Wyndham Hotels and its restricted subsidiaries, subject to customary exceptions and limitations. The revolving credit facility and term loan (the “Credit Facilities”) are guaranteed, jointly and severally, by certain of Wyndham Hotels & Resorts, Inc.’s wholly-owned domestic subsidiaries and secured by a first-priority security interest in substantially all of the assets of Wyndham Hotels & Resorts, Inc. and those subsidiaries. The Credit Facilities were initially guaranteed by Wyndham Worldwide, which guarantee was released immediately prior to the consummation of the spin-off. The Credit Facilities contain customary covenants that, among other things, restrict, subject to certain exceptions, Wyndham Hotels & Resorts, Inc. and its restricted subsidiaries’ ability to grant liens on Wyndham Hotels & Resorts, Inc. and its restricted subsidiaries’ assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations and pay certain dividends and other restricted payments. The Credit Facilities require Wyndham Hotels & Resorts, Inc. to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum first-lien leverage ratio. Subject to customary conditions and restrictions, Wyndham Hotels & Resorts, Inc. may obtain incremental term loans and/or revolving loans in an aggregate amount not to exceed (i) the greater of $550 million and 100% of EBITDA, plus (ii) the amount of all voluntary prepayments and commitment reductions under the Credit Facilities, plus (iii) additional amounts subject to certain leverage-based ratio tests. The Credit Facilities also contain certain customary events of default, including, but not limited to: (i) failure to pay principal, interest, fees or other amounts under the Credit Facilities when due, taking into account any applicable grace period; (ii) any representation or warranty proving to have been incorrect in any material respect when made; (iii) failure to perform or observe covenants or other terms of the Credit Facilities subject to certain grace periods; (iv) a cross-default and cross-acceleration with certain other material debt; (v) bankruptcy events; (vi) certain defaults under ERISA; and (vii) the invalidity or impairment of security interests. 5.375% Senior Unsecured Notes . In April 2018, the Company issued $500 million of senior unsecured notes, which mature in 2026 and bear interest at a rate of 5.375% per year, for net proceeds of $493 million . Interest is payable semi-annually in arrears on October 15 and April 15 of each year, commencing on October 15, 2018. The notes were initially guaranteed by Wyndham Worldwide on a senior unsecured basis and, immediately prior to the consummation of the spin-off, Wyndham Worldwide’s guarantee of the notes was released. During May 2018, the Company entered into a second supplemental indenture with certain of its wholly owned domestic subsidiaries, pursuant to which they became guarantors of the notes. The Company used the net cash proceeds from the notes to replace a portion of Wyndham Worldwide’s bridge term loan facility, reducing former Parent’s outstanding bridge term loan facility commitments to approximately $1.5 billion . The remainder of the bridge term loan facility, which had been put in place to provide funding for the La Quinta acquisition, was terminated in conjunction with the issuance of the Term Loan. Wyndham Worldwide paid $12 million to obtain such financing commitments. Capital Lease . In connection with the Company’s separation from Wyndham Worldwide, Wyndham Hotels was assigned the lease for its corporate headquarters located in Parsippany, New Jersey from its former Parent, which resulted in the Company recording a capital lease obligation and asset of $66 million and $43 million , respectively. Such capital lease has an interest rate of 4.5% during 2018. Deferred Financing Costs The Company classifies debt issuance costs related to its revolving credit facility within other non-current assets on the Consolidated and Combined Balance Sheets. The Company had debt issuance costs of $5 million as of September 30, 2018. Cash Flow Hedge On May 30, 2018, Wyndham Hotels hedged a portion of its $1.6 billion term loan. The pay-fixed/receive-variable interest rate swaps have a total notional amount $1.0 billion , of which $500 million has an initial term of five years and $500 million has an initial term of two and half years, with fixed rates of 2.66% and 2.52% , respectively. The variable rates of the swap agreements are based on one-month LIBOR. The aggregate fair value of these interest rate swaps was a $9 million asset as of September 30, 2018, which was included within other non-current assets on the Condensed Consolidated and Combined Balance Sheet. Gains recognized in Accumulated other comprehensive income for the three and nine months ended September 30, 2018 were $5 million and $7 million , respectively. Debt Due to former Parent During May 2018, the Company’s former Parent contributed $197 million of debt that was due from a subsidiary of Wyndham Hotels. Such outstanding borrowings are eliminated within the Condensed Consolidated and Combined Financial Statements. As of December 31, 2017, Wyndham Hotels had $184 million of outstanding borrowings from its former Parent. Interest Expense, Net Wyndham Hotels incurred net interest expense of $24 million and $2 million for the three months ended September 30, 2018 and 2017 , respectively, and $36 million and $5 million for the nine months ended September 30, 2018 and 2017 , respectively. Cash paid related to such interest was $22 million for the three and nine months ended September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in claims, legal and regulatory proceedings, and governmental inquiries related to the Company’s business. Litigation Wyndham Hotels is involved, at times, in claims, legal and regulatory proceedings and governmental inquiries arising in the ordinary course of its business, including but not limited to: breach of contract, fraud and bad faith claims with franchisees in connection with franchise agreements and with owners in connection with management contracts, negligence, breach of contract, fraud, employment, consumer protection and other statutory claims asserted in connection with alleged acts or occurrences at owned, franchised or managed properties or in relation to guest reservations and bookings. The Company may also at times be involved in claims, legal and regulatory proceedings and governmental inquiries relating to bankruptcy proceedings involving efforts to collect receivables from a debtor in bankruptcy, employment matters, claims of infringement upon third parties’ intellectual property rights, claims relating to information security, privacy and consumer protection, fiduciary duty/trust claims, tax claims, environmental claims and landlord/tenant disputes. The Company will assume one-third of certain contingent and other corporate liabilities of Wyndham Worldwide incurred prior to the spin-off, including liabilities of Wyndham Worldwide related to, arising out of or resulting from certain terminated or divested businesses, certain general corporate matters of Wyndham Worldwide and any actions with respect to the separation plan or the distribution made or brought by any third party. Wyndham Hotels records an accrual for legal contingencies when it determines, after consultation with outside counsel, that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In making such determinations, Wyndham Hotels evaluates, among other things, the degree of probability of an unfavorable outcome, and when it is probable that a liability has been incurred, its ability to make a reasonable estimate of loss. Wyndham Hotels reviews these accruals each reporting period and makes revisions based on changes in facts and circumstances, including changes to its strategy in dealing with these matters. Wyndham Hotels believes that it has adequately accrued for such matters with reserves of $28 million and $3 million as of September 30, 2018 and December 31, 2017 . For matters not requiring accrual, Wyndham Hotels believes that such matters will not have a material effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and, although Wyndham Hotels believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to Wyndham Hotels with respect to earnings and/or cash flows in any given reporting period. The Company had receivables of $25 million as of September 30, 2018 for certain matters which are covered by insurance and were included in other current assets on its Condensed Consolidated and Combined Balance Sheet. As of September 30, 2018 , the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to $28 million in excess of recorded accruals. However, Wyndham Hotels does not believe that the impact of such litigation will result in a material liability to Wyndham Hotels in relation to its combined financial position or liquidity. Hotel Management Guarantees The Company has entered into hotel management agreements that provide the hotel owner with a guarantee of a certain level of profitability based upon various metrics. Under such agreements, the Company would be required to compensate the hotel owner for any profitability shortfall over the life of the management agreement up to a specified aggregate amount. For certain agreements, the Company may be able to recapture all or a portion of the shortfall payments in the event that future operating results exceed targets. The original terms of the Company’s existing guarantees range from nine to ten years. As of September 30, 2018 , the maximum potential amount of future payments that may be made under these guarantees was $104 million with a combined annual cap of $26 million . These guarantees have a remaining life of approximately four to six years with a weighted average life of approximately five years. In connection with its performance guarantees, as of September 30, 2018 , the Company maintained a liability of $23 million , of which $15 million was included in other non-current liabilities and $8 million was included in accrued expenses and other current liabilities on its Condensed Consolidated and Combined Balance Sheet. As of September 30, 2018 , the Company also had a corresponding $11 million asset related to these guarantees, of which $10 million was included in other non-current assets and $1 million was included in other current assets on its Condensed Consolidated and Combined Balance Sheet. As of December 31, 2017 , the Company maintained a liability of $23 million , of which $16 million was included in other non-current liabilities and $7 million was included in accrued expenses and other current liabilities on its Condensed Consolidated and Combined Balance Sheet. As of December 31, 2017 , the Company also had a corresponding $12 million asset related to the guarantees, of which $1 million was included in other current assets and $11 million was included in other non-current assets on its Condensed Consolidated and Combined Balance Sheet. Such assets are being amortized on a straight-line basis over the life of the agreements. The amortization expense for the performance guarantees noted above was $1 million for the three months ended September 30, 2018 and 2017 , and $1 million and $3 million for the nine months ended September 30, 2018 and 2017 , respectively. For guarantees subject to recapture provisions, the Company had a receivable of $44 million as of September 30, 2018 , of which $42 million was included in other non-current assets and $2 million was included in other current assets on its Condensed Consolidated and Combined Balance Sheet. As of December 31, 2017 , the Company had a receivable of $41 million which was included in other non-current assets on its Condensed Consolidated and Combined Balance Sheet. Such receivables were the result of payments made to date that are subject to recapture and which the Company believes will be recoverable from future operating performance. Credit Support Provided and Other Indemnifications relating to Wyndham Worldwide’s Sale of its European Vacation Rentals Business In May 2018, Wyndham Destination Network, LLC (“WDN”), a subsidiary of Wyndham Worldwide Corporation, and certain other Parent subsidiaries, completed the previously announced sale of the European Vacation Rentals business to Compass IV Limited, an affiliate of Platinum Equity, LLC. I n connection with the sale of the European Vacation Rentals business, the Company has provided certain post-closing credit support in the form of guarantees of up to approximately $87 million to ensure that the business meets the requirements of certain credit card service providers, travel association and regulatory authorities. The fair value of the Company's post-closing credit support of $87 million in guarantees resulted in the Company recording a liability of $41 million and a $27 million receivable from its former Parent representing two-thirds of such guarantee. In addition, WDN has agreed that either it or Wyndham Hotels will provide an additional $46 million in post-closing credit support to certain regulatory authorities by September 30, 2018. In connection with such additional post-closing credit support, former Parent has deposited $46 million in escrow account funding. The escrow account funding will be released to Wyndham Destinations to the extent alternative post-closing credit support is provided by September 30, 2018, and the Company may receive one-third of any amount received in respect to the release of the escrow account. During third quarter 2018, the Company provided $46 million of credit support and recorded a liability of $22 million for the fair value of such credit support. Wyndham Destinations is responsible for two-thirds of such guarantee, and thus the Company recorded a receivable for two-thirds of the fair value of the guarantee, which amounted to $15 million . In connection with the alternative post-closing credit support, the Company also provided a guarantee in favor of Platinum Equity, LLC as credit support. As a result of the Company providing the credit support, the escrow deposit of $46 million was released to the Company’s former Parent. The Company is entitled to one-third of the escrow deposit and recorded a receivable of approximately $15 million from Wyndham Destinations. This receivable will be settled with the Company’s former Parent in conjunction with the final calculation of the net proceeds from the sale of the European Vacation Rentals business to Compass IV Limited. Such post-closing credit support may be called if the European Vacation Rentals business fails to meets its primary obligation to pay amounts when due. Compass IV Limited has provided an indemnity to Wyndham Worldwide Corporation in the event that the post-closing credit support is enforced or called upon. Pursuant to the terms of the Separation and Distribution Agreement that was entered into in connection with the Distribution, the Company will assume one-third and Wyndham Destinations will assume two-thirds of any such losses actually incurred by Wyndham Destinations or the Company in the event that these credit support arrangements are enforced or called upon by any beneficiary and of any amounts received by Wyndham Destinations in respect of any indemnification claims made. The total fair value of the Company’s post-closing credit support guarantees amounted to $63 million and was included in other non-current liabilities, and a $42 million receivable from its former Parent representing two-thirds of such guarantee which was included in other non-current assets on its Condensed Consolidated and Combined Balance Sheet. License Agreement related to Wyndham Worldwide’s Sale of its European Vacation Rentals Business In connection with its sale, the European Vacation Rentals business has entered into a 20 -year agreement under which it will pay Wyndham Hotels a royalty fee of 1% of net revenue for the right to use the “by Wyndham” endorser brand. The Company recorded $3 million and $4 million of royalty fees related to this agreement for the three and nine months ended September 30, 2018, respectively. 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 remaining amount of liabilities which were assumed by the Company in connection with the spin-off was $27 million as of September 30, 2018, of which $26 million was included within other non-current liabilities and $1 million was included within current liabilities on its Condensed Consolidated and Combined Balance Sheet. In addition, the Company had $32 million of receivables due from former Parent and subsidiaries relating to income taxes as of September 30, 2018, which was included within current assets on its Condensed Consolidated and Combined Balance Sheet. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has a stock-based compensation plan available to grant non-qualified stock options, incentive stock options, stock-settled appreciation rights (“SSARs”), RSUs, performance-vesting restricted stock units (“PSUs”) and other stock or cash-based awards to key employees, non-employee directors, advisors and consultants. Under the Wyndham Hotels & Resorts, Inc. 2018 Equity and Incentive Plan, which became effective on May 14, 2018, a maximum of 10.0 million shares of common stock may be awarded. As of September 30, 2018 , 7.4 million shares remained available. Incentive Equity Awards Granted by the Company On May 17, 2018, Wyndham Hotels’ Board of Directors approved an incentive equity award grant to key employees and senior officers of Wyndham Hotels in the form of RSUs and stock options. Such awards were converted to Wyndham Hotels equity awards on the first day of trading after the Company’s separation from Wyndham Worldwide. The Company granted 0.5 million RSUs and 0.5 million options to key employees during the nine months ended September 30, 2018 that vest ratably over a four -year period. The activity related to the Company’s incentive equity awards from June 1, 2018 through September 30, 2018 consisted of the following: RSUs Options Number of Weighted Number Weighted Balance as of May 31, 2018 — $ — — $ — Granted (a) 0.5 61.40 0.5 61.40 Vested/exercised — — — — Balance as of September 30, 2018 0.5 (b) $ 61.40 0.5 (c) $ 61.40 (a) Represents awards granted by the Company primarily on June 1, 2018. (b) Approximately 0.5 million RSUs as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $29 million , which is expected to be recognized over a weighted average period of 3.7 years . (c) Approximately 0.5 million options outstanding as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $6 million , which is expected to be recognized over a weighted average period of 3.7 years . The fair value of stock options granted by Wyndham Hotels on June 1, 2018 was estimated to be $11.72 per option on the date of the grant using the Black-Scholes option-pricing model with the relevant weighted average assumptions outlined in the table below. Expected volatility is based on both historical and implied volatilities of the stock of comparable companies over the estimated expected life of the options. The expected life represents the period of time the options are expected to be outstanding. The-risk free interest rate is based on yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the options. The projected dividend yield was based on the Company’s anticipated annual dividend divided by the price of the Company’s stock on the date of the grant. 2018 Grant date strike price $61.40 Expected volatility 22.72% Expected life 4.25 years Risk-free interest rate 2.73% Projected dividend yield 1.63% Stock-Based Compensation Expense for Awards Granted by the Company Stock-based compensation expense for the awards granted in 2018 to employees amounted to $2 million and $3 million for the three and nine months ended September 30, 2018, respectively. The Company also recorded stock-based compensation expense for non-employee directors of $1 million for the three and nine months ended September 30, 2018. Incentive Equity Awards Granted by Wyndham Worldwide Wyndham Worldwide maintained a stock-based compensation plan (the “Stock Plan”) for the benefit of its officers, directors and employees. All share-based compensation awards granted under the Stock Plan related to Wyndham Worldwide common stock. As such, all related equity account balances are reflected in Wyndham Worldwide’s Consolidated Statements of Equity and have not been reflected in Wyndham Hotels’ Condensed Consolidated and Combined Financial Statements. The following disclosures represent stock-based compensation activity attributable to Wyndham Hotels employees under Wyndham Worldwide’s Stock Plan. Incentive Equity Awards Conversion Upon the Company’s separation, all outstanding share-based compensation awards granted by Worldwide Worldwide were converted at a ratio of one Wyndham Hotels equity award and one Wyndham Destinations equity award for every one Wyndham Worldwide equity award. Incentive Equity Award Modification In August 2017, in conjunction with the anticipated spin-off of Wyndham Hotels, the Wyndham Worldwide board of directors approved certain modifications to the incentive equity awards granted by Wyndham Worldwide. Such modifications were contingent upon the spin-off becoming probable. On May 9, 2018, Wyndham Worldwide’s board of directors approved the spin-off of Wyndham Hotels, resulting in an acceleration of vesting for all outstanding equity awards granted prior to 2018. As a result of this acceleration, 0.1 million RSUs and PSUs vested on June 1, 2018 and 0.3 million RSUs are expected to vest on November 30, 2018. In addition, 0.1 million RSUs not subject to modification will vest in July 2019. The activity related to RSUs and PSUs granted by Wyndham Worldwide to Wyndham Hotels employees for the nine months ended September 30, 2018 consisted of the following: RSUs PSUs Number of Weighted (b) Number Weighted Balance as of December 31, 2017 0.3 $ 60.80 0.1 $ 60.80 Granted (a) 0.1 64.46 — — Transferred from former Parent (c) 0.2 61.65 — — Vested/canceled (0.2 ) 60.84 (0.1 ) 60.80 Balance as of September 30, 2018 0.4 (d) $ 61.58 — $ — (a) Represents awards granted by Wyndham Worldwide on March 1, 2018. (b) Weighted average grant prices were adjusted to reflect changes resulting from the modification and separation from Wyndham Worldwide. (c) Represents awards related to employees that transferred from Wyndham Worldwide to Wyndham Hotels upon separation. (d) Approximately 0.4 million outstanding RSUs as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $10 million which is expected to be recognized over a weighted average period of 0.5 years. Stock-Based Compensation Expense Granted by Wyndham Worldwide Under the Stock Plan, the Company recorded $10 million and $33 million of stock-based compensation expense for the three and nine months ended September 30, 2018 , respectively, for awards granted to Wyndham Hotel employees, of which $10 million and $30 million , respectively, were recorded within separation-related costs on the Condensed Consolidated and Combined Statements of Income. Such separation-related costs included $15 million of expense for the nine months ended September 30, 2018 as a result of the modification of the Stock Plan. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 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 costs (acquisition-, disposition- or separation-related), foreign currency impacts of highly inflationary countries, stock-based compensation expense, early extinguishment of debt costs and income taxes. Beginning with the third quarter of 2018, Wyndham Hotels’ calculation of Adjusted EBITDA excludes the currency effects of highly inflationary countries. Wyndham Hotels believes that Adjusted EBITDA is a useful measure of performance for its segments which, when considered with U.S. GAAP measures, Wyndham Hotels believes allows a more complete understanding of its operating performance. Wyndham Hotels’ presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. Three Months Ended September 30, 2018 2018 2017 Net Revenues Adjusted EBITDA Net Revenues Adjusted EBITDA Hotel Franchising $ 348 $ 178 $ 258 $ 132 Hotel Management 252 5 89 1 Total Reportable Segments 600 183 347 133 Corporate and Other 4 (17 ) — (9 ) Total Company $ 604 $ 166 $ 347 $ 124 Reconciliation of Net income to Adjusted EBITDA Three Months Ended September 30, 2018 2018 2017 Net income $ 58 $ 58 Provision for income taxes 23 42 Depreciation and amortization 30 19 Interest expense, net 24 2 Stock-based compensation 3 2 Separation-related 17 — Transaction-related, net 7 1 Foreign currency impact of highly inflationary countries 4 — Adjusted EBITDA $ 166 $ 124 Nine Months Ended September 30, 2018 2018 2017 Net Revenues Adjusted EBITDA Net Revenues Adjusted EBITDA Hotel Franchising $ 840 $ 394 $ 682 $ 321 Hotel Management 497 29 285 15 Total Reportable Segments 1,337 423 967 336 Corporate and Other 4 (41 ) — (29 ) Total Company $ 1,341 $ 382 $ 967 $ 307 Reconciliation of Net income to Adjusted EBITDA Nine Months Ended 2018 2017 Net income $ 118 $ 138 Provision for income taxes 47 98 Depreciation and amortization 71 56 Interest expense, net 36 5 Stock-based compensation 6 8 Separation-related 63 — Transaction-related, net 37 1 Foreign currency impact of highly inflationary countries 4 — Restructuring — 1 Adjusted EBITDA $ 382 $ 307 |
Separation-Related and Transact
Separation-Related and Transaction-Related Costs | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Separation-Related and Transaction-Related Costs | Separation-Related and Transaction-Related Costs Separation-Related On May 31, 2018, Wyndham Worldwide completed the Distribution, which resulted in Wyndham Hotels & Resorts, Inc. becoming a separate, publicly traded company (see Note 1 - Basis of Presentation for further details). For the three and nine months ended September 30, 2018 , the Company incurred $17 million and $63 million , respectively, of separation-related costs associated with its spin-off from Wyndham Worldwide. These costs primarily consist of severance, stock-based compensation and other employee-related costs. Transaction-Related, Net For the three months ended September 30, 2018 , the Company incurred $7 million of transaction-related costs primarily related to the Company’s acquisition of La Quinta. For the nine months ended September 30, 2018 , the Company incurred $37 million of transaction-related costs consisting of $60 million primarily related to the Company’s acquisition of La Quinta partially offset by a $23 million gain on the sale of its Knights Inn brand in May 2018. This sale was not material to the Company’s results of operations or financial position. |
Transactions With Former Parent
Transactions With Former Parent | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Transactions With Former Parent | Transactions with Former Parent Wyndham Hotels has a number of existing arrangements whereby former Parent has provided services to Wyndham Hotels. Cash Management Former Parent uses a centralized cash management process. Prior to the Distribution, the majority of Wyndham Hotels’ daily cash receipts were transferred to former Parent and former Parent funded Wyndham Hotels’ operating and investing activities as needed. Accordingly, the cash and cash equivalents held by former Parent were not allocated to Wyndham Hotels prior to the Distribution. During such periods, Wyndham Hotels reflected transfers of cash between the Company and former Parent as a component of Due to former Parent, net on its Condensed Consolidated and Combined Balance Sheets. Net Transfer to Former Parent The components of net transfers to former Parent in the Condensed Consolidated and Combined Statements of former Parent’s Net Investment were as follows: Nine Months Ended September 30, 2018 2017 Cash pooling and general financing activities $ (110 ) $ (220 ) Indirect general corporate overhead allocations 12 25 Corporate allocations for shared services 13 21 Stock-based compensation allocations 20 8 Income taxes 27 75 Net transfers to former Parent $ (38 ) $ (91 ) Net Contribution from Former Parent The components of net contribution from former Parent in the Condensed Consolidated and Combined Statements of former Parent’s Net Investment were as follows: Nine Months Ended September 30, 2018 Contribution of outstanding borrowings due to former Parent $ 197 Capital contribution from former Parent 106 Dividend to former Parent (90 ) Other contributions from former Parent, net 20 Net contribution from former Parent $ 233 Debt Due to Former Parent Wyndham Hotels had $184 million of outstanding borrowings from its former Parent as of December 31, 2017 . See Note 10 - Long-Term Debt and Borrowing Arrangements for further detail. Services Provided by Former Parent Prior to the Distribution, Wyndham Hotels’ combined financial statements include costs for services that its former Parent provided to the Company, including, but not limited to, information technology support, financial services, human resources and other shared services. Historically, these costs were charged to Wyndham Hotels on a basis determined by its former Parent to reflect a reasonable allocation of actual costs incurred to perform the services. During the nine months ended September 30, 2018 and 2017 , Wyndham Hotels was charged $13 million and $21 million , respectively, for such services, which were included in Operating and General and administrative expenses in Wyndham Hotels’ Condensed Consolidated and Combined Statements of Income. Additionally, former Parent allocated indirect general corporate overhead costs to Wyndham Hotels for certain functions and services provided, including, but not limited to, executive facilities, shared service technology platforms, finance and other administrative support. Accordingly, the Company recorded $12 million and $25 million of expenses for indirect general corporate overhead from former Parent during the nine months ended September 30, 2018 and 2017 , respectively, which are included in General and administrative expenses within its Condensed Consolidated and Combined Statements of Income. These allocations may not, however, reflect the expense Wyndham Hotels would have incurred as an independent, publicly traded company for the periods presented. Actual costs that may have been incurred had Wyndham Hotels been a stand-alone company would depend on a number of factors, including the chosen organizational structure, the functions Wyndham Hotels might have performed itself or outsourced and strategic decisions Wyndham Hotels might have made in areas such as information technology and infrastructure. Following the Distribution, Wyndham Hotels will perform these functions using its own resources or purchased services from either former Parent or third parties. For an interim period some of these functions will continue to be provided by former Parent under a transition services agreement. Insurance Prior to the Distribution, former Parent provided the Company with insurance coverage for general liability, property, business interruption and other risks with respect to business operations and charged the Company a fee based on estimates of claims. Wyndham Hotels was charged $1 million and $2 million for insurance during the nine months ended September 30, 2018 and 2017 , respectively, which was included in the Condensed Consolidated and Combined Statements of Income. Defined Contribution Benefit Plans Prior to the Distribution, former Parent administered and maintained domestic defined contribution savings plans and a domestic deferred compensation plan that provide eligible employees of Wyndham Hotels an opportunity to accumulate funds for retirement. Former Parent matched the contributions of participating employees on the basis specified by each plan. Wyndham Hotels’ cost for these plans was $2 million and $4 million during the nine months ended September 30, 2018 and 2017 , respectively. Transactions with Former Parent In connection with the Distribution, Wyndham Hotels and Wyndham Worldwide entered into long-term exclusive license agreements to retain Wyndham Destination’s affiliations with one of the industry’s top-rated loyalty programs, Wyndham Rewards, as well as to continue to collaborate on inventory-sharing and customer cross-sell initiatives. Wyndham Hotels 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, a transition services agreement and a license, development and noncompetition agreement. In connection with these agreements, the Company recorded $4 million of revenues during the three and nine months ended September 30, 2018, which are reported within Corporate and Other. These agreements have either not existed historically, or may be on different terms than the terms of the arrangement or agreements that existed prior to the spin-off. These Condensed Consolidated and Combined Financial Statements do not reflect the effect of these new and/or revised agreements for periods prior to the Distribution. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | All intercompany balances and transactions have been eliminated in the Condensed Consolidated and Combined Financial Statements. Wyndham Hotels’ Condensed Consolidated and Combined Financial Statements include certain indirect general and administrative costs allocated to it by former Parent for certain functions and services including, but not limited to, executive office, finance and other administrative support. These expenses have been allocated to Wyndham Hotels on the basis of direct usage when identifiable, with the remainder allocated primarily based on its pro-rata share of combined revenues or headcount. Both Wyndham Hotels and former Parent consider the basis on which expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by Wyndham Hotels during the periods presented. The Condensed Consolidated and Combined Financial Statements have been prepared on a stand-alone basis and prior to May 31, 2018 are derived from the consolidated financial statements and accounting records of Wyndham Worldwide. The Condensed Consolidated and Combined Financial statements include Wyndham Hotels’ assets, liabilities, revenues, expenses and cash flows and all entities in which Wyndham Hotels has a controlling financial interest. |
Basis of Accounting | The accompanying Condensed Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. |
Use of Estimate | In presenting the Condensed Consolidated and Combined Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which requires companies generally to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company intends to adopt this guidance on January 1, 2019, and is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Simplifying the Test for Goodwill Impairment . In January 2017, the FASB issued guidance which simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for the interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued guidance to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, with early adoption permitted. This guidance should be applied on either a retrospective or prospective basis. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures. Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, the FASB issued guidance on revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the statement of financial position. The Company adopted the guidance on January 1, 2018 utilizing the full retrospective transition method. This adoption primarily affected the accounting for initial franchise fees, upfront costs, marketing and reservation expenses and loyalty revenues. Specifically, under the new guidance, initial fees are recognized ratably over the life of the noncancelable period of the franchise agreement, and incremental upfront contract costs are deferred and expensed over the life of the noncancelable period of the franchise agreement. Loyalty revenues are deferred and primarily recognized over the loyalty points’ redemption pattern. Additionally, the Company no longer accrues a liability for future marketing and reservation costs when marketing and reservation revenues earned exceed costs incurred. Marketing and reservation costs incurred in excess of revenues earned continue to be expensed as incurred. The tables below summarize the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Income Statement: Year Ended December 31, 2017 Net revenues Previously Reported Balance New Revenue Standard Adjusted Balance Royalties and franchise fees $ 375 $ (11 ) $ 364 Marketing, reservation and loyalty 407 (36 ) 371 Other 118 (20 ) 98 Net revenues 1,347 (67 ) 1,280 Expenses Marketing, reservation and loyalty 406 (33 ) 373 Operating 205 (22 ) 183 Total expenses 1,086 (55 ) 1,031 Income/(loss) before income taxes 255 (12 ) * 243 Provision for income taxes 12 1 * 13 Net income/(loss) 243 (13 ) 230 * The income tax provision consists of (i) a $4 million deferred tax provision resulting from a reduction in deferred tax assets recorded in connection with the retrospective adoption of the new revenue standard and the impact of the lower U.S. corporate income tax rate from the enactment of the U.S. Tax Cuts and Jobs Act and (ii) $3 million tax benefit related to the $12 million loss before income taxes. The table below summarizes the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Balance Sheet: At December 31, 2017 Assets Previously Reported Balance New Revenue Standard Adjusted Balance Other current assets $ 50 $ 4 $ 54 Total current assets 330 4 334 Other non-current assets 176 11 187 Total assets 2,122 15 2,137 Liabilities and net investment Deferred income 79 5 84 Total current liabilities 406 5 411 Deferred income taxes 181 (8 ) 173 Deferred income 76 88 164 Other non-current liabilities 78 (32 ) 46 Total liabilities 822 53 875 Former Parent’s net investment 1,295 (38 ) 1,257 Total liabilities and net investment 2,122 15 2,137 In addition, the cumulative impact from the adoption of the new revenue standard to the Company’s Former Parent’s net investment at January 1, 2016, was a decrease of $29 million . Intra-Entity Transfers of Assets Other Than Inventory . In October 2016, the FASB issued guidance which requires companies to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance requires the modified retrospective approach and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required, which resulted in a cumulative-effect benefit to retained earnings of $15 million . Clarifying the Definition of a Business . In January 2017, the FASB issued guidance clarifying the definition of a business, which assists entities when evaluating whether transactions should be accounted for as acquisitions of businesses or of assets. This guidance is effective on a prospective basis for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. There was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. Compensation - Stock Compensation. In May 2017, the FASB issued guidance which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. There was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. Statement of Cash Flows . In August 2016, the FASB issued guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This guidance requires the retrospective transition method and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required. The impact of this new guidance resulted in payments of, and proceeds from, development advance notes being recorded within operating activities on its Condensed Consolidated and Combined Statements of Cash Flows. Restricted Cash . In November 2016, the FASB issued guidance which requires amounts generally described as restricted cash be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted the guidance on January 1, 2018, as required, using a retrospective transition method. The impact of this guidance resulted in escrow deposits and restricted cash being included with cash, cash equivalents and restricted cash on the Condensed Consolidated and Combined Statements of Cash Flows. Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities. In August 2017, the FASB issued guidance intended to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance will expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance on April 1, 2018 and there was no material impact on its Condensed Consolidated and Combined Financial Statements and related disclosures. |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Impact of Adoption | The tables below summarize the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Income Statement: Year Ended December 31, 2017 Net revenues Previously Reported Balance New Revenue Standard Adjusted Balance Royalties and franchise fees $ 375 $ (11 ) $ 364 Marketing, reservation and loyalty 407 (36 ) 371 Other 118 (20 ) 98 Net revenues 1,347 (67 ) 1,280 Expenses Marketing, reservation and loyalty 406 (33 ) 373 Operating 205 (22 ) 183 Total expenses 1,086 (55 ) 1,031 Income/(loss) before income taxes 255 (12 ) * 243 Provision for income taxes 12 1 * 13 Net income/(loss) 243 (13 ) 230 * The income tax provision consists of (i) a $4 million deferred tax provision resulting from a reduction in deferred tax assets recorded in connection with the retrospective adoption of the new revenue standard and the impact of the lower U.S. corporate income tax rate from the enactment of the U.S. Tax Cuts and Jobs Act and (ii) $3 million tax benefit related to the $12 million loss before income taxes. The table below summarizes the impact of the adoption of the new revenue standard on the Company’s Condensed Combined Balance Sheet: At December 31, 2017 Assets Previously Reported Balance New Revenue Standard Adjusted Balance Other current assets $ 50 $ 4 $ 54 Total current assets 330 4 334 Other non-current assets 176 11 187 Total assets 2,122 15 2,137 Liabilities and net investment Deferred income 79 5 84 Total current liabilities 406 5 411 Deferred income taxes 181 (8 ) 173 Deferred income 76 88 164 Other non-current liabilities 78 (32 ) 46 Total liabilities 822 53 875 Former Parent’s net investment 1,295 (38 ) 1,257 Total liabilities and net investment 2,122 15 2,137 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Liabilities | Contract liabilities as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 Deferred initial franchise fee revenue $ 128 $ 116 Deferred loyalty program revenue 74 54 Deferred co-branded credit card programs revenue — 37 Deferred hotel management fee revenue 24 19 Deferred other revenue 21 22 Total $ 247 $ 248 |
Schedule of Performance Obligations | The following table summarizes the Company’s remaining performance obligations for the twelve-month periods set forth below: 10/1/2018- 9/30/2019 10/1/2019- 9/30/2020 10/1/2020- 9/30/2021 Thereafter Total Initial franchise fee revenue $ 10 $ 14 $ 13 $ 91 $ 128 Loyalty program revenue 46 18 7 3 74 Hotel management fee revenue 2 — 2 20 24 Other revenue 17 1 1 2 21 Total $ 75 $ 33 $ 23 $ 116 $ 247 |
Schedule of Disaggregation of Net Revenues | The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products for each of the Company’s segments: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Hotel Franchising Royalties and franchise fees $ 137 $ 104 $ 326 $ 271 Marketing, reservation and loyalty 151 109 357 281 License and other revenues from former Parent 36 20 79 56 Other 24 25 78 74 Total Hotel Franchising 348 258 840 682 Hotel Management Royalties and franchise fees 1 3 6 6 Marketing, reservation, and loyalty — — 2 1 Hotel management - owned properties 17 16 58 60 Hotel management - managed properties 15 6 32 18 Cost reimbursements 219 64 398 199 Other — — 1 1 Total Hotel Management 252 89 497 285 Corporate and Other 4 — 4 — Net Revenues $ 604 $ 347 $ 1,341 $ 967 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted EPS | The following table sets forth the computation of basic and diluted EPS (in millions, except per-share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income $ 58 $ 58 $ 118 $ 138 Basic weighted average shares outstanding 99.8 99.8 99.8 99.8 Stock options and restricted stock units (“RSUs”) 0.3 — 0.1 — Diluted weighted average shares outstanding 100.1 99.8 99.9 99.8 Earnings per share: Basic $ 0.58 $ 0.58 $ 1.19 $ 1.39 Diluted 0.58 0.58 1.19 1.39 Dividends: Aggregate dividends paid to shareholders $ 25 $ — $ 52 $ — |
Schedule of Stock Repurchase Activity | The following table summarizes stock repurchase activity under the current stock repurchase program (in millions, except per share data): Shares Cost Average Price Per Share As of May 31, 2018 — $ — $ — For the four months ended September 30, 2018 1.0 59 57.84 As of September 30, 2018 1.0 $ 59 57.84 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Allocation of Purchase Price | The preliminary allocation of the purchase price is summarized as follows: Amount Total consideration (a) $ 1,951 Cash withheld to repay La Quinta Holdings Inc.’s estimated tax liability (b) (240 ) Cash withheld to pay employee-related liabilities (15 ) Net cash consideration 1,696 Cash escrowed from CorePoint (c) $ 985 Payment of La Quinta Holdings Inc.’s long‑term debt (c) (985 ) — — Cash utilized to repay La Quinta Holdings Inc.’s long‑term debt (d) (715 ) Net cash consideration (to shareholders of La Quinta Holdings Inc.) $ 981 Total current assets (e) $ 68 Property and equipment 19 Trademarks (f) 759 Franchise agreements (f) 228 Management contracts (f) 137 Other assets 5 Total assets acquired $ 1,216 Total current liabilities (e) $ 105 Deferred income taxes (g) 258 Long‑term debt repaid at acquisition (c) 715 Assumed tax liability (b) 240 Other liabilities 11 Total liabilities assumed 1,329 Net identifiable liabilities acquired (113 ) Goodwill (h) 1,094 Total consideration transferred $ 981 (a) Includes additional consideration of $1 million net debt adjustment paid to CorePoint during the third quarter of 2018. (b) Reflects a portion of the purchase price which is expected to be paid in late 2018 or early 2019 to tax authorities and/or CorePoint. During the third quarter of 2018, the Company paid $35 million related to this liability. As such, the balance at September 30, 2018 was $205 million , which is reported within Accrued expenses and other current liabilities on the Condensed Consolidated and Combined Balance Sheet. (c) As a result of a change in control provision within La Quinta’s long-term indebtedness, CorePoint deposited $985 million into an escrow account which was utilized to repay a portion of La Quinta Holdings Inc.’s existing indebtedness. (d) Reflects the portion of La Quinta Holdings Inc.’s long-term debt that was required to be paid by the Company upon a change in control. (e) The fair values of total current assets and total current liabilities are estimated to approximate their current carrying values. (f) The identifiable intangible assets consist of trademarks with an indefinite life, franchise agreements which have a weighted average life of 25 years and management agreements which have a weighted average life of 15 years . The preliminary fair valuation was performed with the assistance of a third‑party valuation firm, which included the consideration of various valuation techniques that the Company deems appropriate for the measurement of fair value of the assets acquired and liabilities assumed. The final valuation is expected to be completed in late 2018 and may be different from the preliminary results which could result in a change to the fair value of the intangible assets acquired. The preliminary valuations of the franchise agreements and management agreements are based on a discounted cash flow method utilizing forecasted cash flows from La Quinta’s existing franchise agreements and CorePoint franchise agreements and management agreements (the “CorePoint agreements”) that are estimated to be generated over the estimated terms of such contracts. The expected cash flows projections were based on the terms of the agreements, and adjusted for inflation and the costs and expenses required to generate the revenues under such agreements. The significant assumptions that were utilized for La Quinta’s franchise agreements were: (i) forecasted gross room revenues, (ii) a franchise fee of 4.5% , tax affected, and (iii) a discount rate of 9.5% . The significant assumptions that were utilized for the CorePoint agreements were: (i) forecasted gross room revenues, (ii) franchise and management fee rates of 5.0% each, which were tax affected, and (iii) a discount rate of 9.5% and 9.0% for CorePoint franchise and management agreements, respectively. (g) The deferred tax liability primarily results from the fair value adjustments for the identifiable intangible assets. This estimate of deferred tax liabilities was determined based on the book and tax basis differences attributable to the identifiable intangible assets acquired at a combined federal and state effective tax rate. (h) The goodwill recognized in the La Quinta acquisition is not expected to be deductible for income tax purposes. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Intangible assets consisted of: As of September 30, 2018 As of December 31, 2017 Gross Accumulated Net Gross Accumulated Net Unamortized Intangible Assets: Goodwill $ 1,513 $ 423 Trademarks $ 1,441 $ 683 Amortized Intangible Assets: Franchise agreements $ 863 $ 427 $ 436 $ 640 $ 417 $ 223 Management agreements 157 11 146 33 8 25 Trademarks 5 1 4 10 1 9 Other 6 3 3 6 3 3 $ 1,031 $ 442 $ 589 $ 689 $ 429 $ 260 |
Change in Goodwill | The changes in the carrying amount of goodwill are as follows: Balance as of December 31, 2017 Goodwill Acquired During 2018 Adjustments to Goodwill Balance as of September 30, 2018 Hotel Franchising $ 385 $ 1,027 $ (4 ) $ 1,408 Hotel Management 38 67 — 105 Total $ 423 $ 1,094 $ (4 ) $ 1,513 |
Amortization Expense of Amortizable Intangible Assets | Amortization expense relating to amortizable intangible assets was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Franchise agreements $ 6 $ 4 $ 15 $ 11 Management agreements 3 1 5 2 Other 1 — 2 2 Total * $ 10 $ 5 $ 22 $ 15 * Included as a component of depreciation and amortization on the Condensed Consolidated and Combined Statements of Income. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments | The carrying amounts and estimated fair values of all other financial instruments are as follows: September 30, 2018 Carrying Amount Estimated Fair Value Debt Total debt $ 2,145 $ 2,176 |
Long-Term Debt and Borrowing _2
Long-Term Debt and Borrowing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Indebtedness | The Company’s indebtedness consisted of: September 30, 2018 December 31, 2017 Long-term debt: * $750 million revolving credit facility (due May 2023) $ — $ — Term loan (due May 2025) 1,585 — 5.375% senior unsecured notes (due April 2026) 493 — Capital leases 67 — Debt due to former Parent — 184 Total long-term debt 2,145 184 Less: Current portion of long-term debt 21 103 Long-term debt $ 2,124 $ 81 * The carrying amount of the term loan and senior unsecured notes are net of debt issuance costs of $21 million as of September 30, 2018. |
Schedule of Outstanding Debt Maturities | The Company’s outstanding debt as of September 30, 2018 matures as follows: Long-Term Debt Within 1 year $ 21 Between 1 and 2 years 21 Between 2 and 3 years 21 Between 3 and 4 years 21 Between 4 and 5 years 21 Thereafter 2,040 Total $ 2,145 |
Schedule of Available Capacity Under Borrowing Arrangements | As of September 30, 2018, the available capacity under the Company’s revolving credit facility was as follows: Revolving Credit Facility Total capacity $ 750 Less: Letters of credit 14 Available capacity $ 736 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Activity Related to Incentive Equity Awards | The activity related to the Company’s incentive equity awards from June 1, 2018 through September 30, 2018 consisted of the following: RSUs Options Number of Weighted Number Weighted Balance as of May 31, 2018 — $ — — $ — Granted (a) 0.5 61.40 0.5 61.40 Vested/exercised — — — — Balance as of September 30, 2018 0.5 (b) $ 61.40 0.5 (c) $ 61.40 (a) Represents awards granted by the Company primarily on June 1, 2018. (b) Approximately 0.5 million RSUs as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $29 million , which is expected to be recognized over a weighted average period of 3.7 years . (c) Approximately 0.5 million options outstanding as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $6 million , which is expected to be recognized over a weighted average period of 3.7 years . The activity related to RSUs and PSUs granted by Wyndham Worldwide to Wyndham Hotels employees for the nine months ended September 30, 2018 consisted of the following: RSUs PSUs Number of Weighted (b) Number Weighted Balance as of December 31, 2017 0.3 $ 60.80 0.1 $ 60.80 Granted (a) 0.1 64.46 — — Transferred from former Parent (c) 0.2 61.65 — — Vested/canceled (0.2 ) 60.84 (0.1 ) 60.80 Balance as of September 30, 2018 0.4 (d) $ 61.58 — $ — (a) Represents awards granted by Wyndham Worldwide on March 1, 2018. (b) Weighted average grant prices were adjusted to reflect changes resulting from the modification and separation from Wyndham Worldwide. (c) Represents awards related to employees that transferred from Wyndham Worldwide to Wyndham Hotels upon separation. (d) Approximately 0.4 million outstanding RSUs as of September 30, 2018 are expected to vest over time and have an aggregate unrecognized compensation expense of $10 million which is expected to be recognized over a weighted average period of 0.5 years. |
Schedule of Valuation Assumptions | 2018 Grant date strike price $61.40 Expected volatility 22.72% Expected life 4.25 years Risk-free interest rate 2.73% Projected dividend yield 1.63% |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Net Revenues and Adjusted EBITDA by Segment | Three Months Ended September 30, 2018 2018 2017 Net Revenues Adjusted EBITDA Net Revenues Adjusted EBITDA Hotel Franchising $ 348 $ 178 $ 258 $ 132 Hotel Management 252 5 89 1 Total Reportable Segments 600 183 347 133 Corporate and Other 4 (17 ) — (9 ) Total Company $ 604 $ 166 $ 347 $ 124 Nine Months Ended September 30, 2018 2018 2017 Net Revenues Adjusted EBITDA Net Revenues Adjusted EBITDA Hotel Franchising $ 840 $ 394 $ 682 $ 321 Hotel Management 497 29 285 15 Total Reportable Segments 1,337 423 967 336 Corporate and Other 4 (41 ) — (29 ) Total Company $ 1,341 $ 382 $ 967 $ 307 |
Reconciliation of Net Income to Adjusted EBITDA | Reconciliation of Net income to Adjusted EBITDA Three Months Ended September 30, 2018 2018 2017 Net income $ 58 $ 58 Provision for income taxes 23 42 Depreciation and amortization 30 19 Interest expense, net 24 2 Stock-based compensation 3 2 Separation-related 17 — Transaction-related, net 7 1 Foreign currency impact of highly inflationary countries 4 — Adjusted EBITDA $ 166 $ 124 Reconciliation of Net income to Adjusted EBITDA Nine Months Ended 2018 2017 Net income $ 118 $ 138 Provision for income taxes 47 98 Depreciation and amortization 71 56 Interest expense, net 36 5 Stock-based compensation 6 8 Separation-related 63 — Transaction-related, net 37 1 Foreign currency impact of highly inflationary countries 4 — Restructuring — 1 Adjusted EBITDA $ 382 $ 307 |
Transactions With Former Pare_2
Transactions With Former Parent (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Net Parent Transfers | The components of net transfers to former Parent in the Condensed Consolidated and Combined Statements of former Parent’s Net Investment were as follows: Nine Months Ended September 30, 2018 2017 Cash pooling and general financing activities $ (110 ) $ (220 ) Indirect general corporate overhead allocations 12 25 Corporate allocations for shared services 13 21 Stock-based compensation allocations 20 8 Income taxes 27 75 Net transfers to former Parent $ (38 ) $ (91 ) The components of net contribution from former Parent in the Condensed Consolidated and Combined Statements of former Parent’s Net Investment were as follows: Nine Months Ended September 30, 2018 Contribution of outstanding borrowings due to former Parent $ 197 Capital contribution from former Parent 106 Dividend to former Parent (90 ) Other contributions from former Parent, net 20 Net contribution from former Parent $ 233 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Jun. 01, 2018 | May 31, 2018 | Sep. 30, 2018hotelcountry |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of countries operating in (more than) | country | 80 | ||
Tax-free distribution, conversion ratio | 1 | 1 | 1 |
Owned hotel properties | hotel | 2 |
New Accounting Pronouncements_2
New Accounting Pronouncements (Impact of Adoption on Condensed Consolidated Income Statement) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Net revenues | |||||
Net revenues | $ 604 | $ 347 | $ 1,341 | $ 967 | $ 1,280 |
Expenses | |||||
Operating | 51 | 46 | 139 | 135 | 183 |
Total expenses | 499 | 245 | 1,140 | 726 | 1,031 |
Income/(loss) before income taxes | 81 | 100 | 165 | 236 | 243 |
Provision (benefit) for income taxes | 23 | 42 | 47 | 98 | 13 |
Net income | 58 | 58 | 118 | 138 | 230 |
Royalties and franchise fees | |||||
Net revenues | |||||
Net revenues | 138 | 107 | 332 | 277 | 364 |
Marketing, reservation and loyalty | |||||
Net revenues | |||||
Net revenues | 151 | 109 | 359 | 282 | 371 |
Expenses | |||||
Cost of revenues | 139 | 95 | 347 | 269 | 373 |
Other | |||||
Net revenues | |||||
Net revenues | $ 28 | $ 25 | $ 83 | $ 75 | 98 |
Accounting Standards Update 2014-09 | |||||
Expenses | |||||
Provision (benefit) for income taxes | (4) | ||||
Previously Reported Balance | |||||
Net revenues | |||||
Net revenues | 1,347 | ||||
Expenses | |||||
Operating | 205 | ||||
Total expenses | 1,086 | ||||
Income/(loss) before income taxes | 255 | ||||
Provision (benefit) for income taxes | 12 | ||||
Net income | 243 | ||||
Previously Reported Balance | Royalties and franchise fees | |||||
Net revenues | |||||
Net revenues | 375 | ||||
Previously Reported Balance | Marketing, reservation and loyalty | |||||
Net revenues | |||||
Net revenues | 407 | ||||
Expenses | |||||
Cost of revenues | 406 | ||||
Previously Reported Balance | Other | |||||
Net revenues | |||||
Net revenues | 118 | ||||
New Revenue Standard Adjustments | |||||
Expenses | |||||
Income tax benefit from impact of U.S. Tax Cuts and Jobs Act | (3) | ||||
New Revenue Standard Adjustments | Accounting Standards Update 2014-09 | |||||
Net revenues | |||||
Net revenues | (67) | ||||
Expenses | |||||
Operating | (22) | ||||
Total expenses | (55) | ||||
Income/(loss) before income taxes | (12) | ||||
Provision (benefit) for income taxes | 1 | ||||
Net income | (13) | ||||
New Revenue Standard Adjustments | Accounting Standards Update 2014-09 | Royalties and franchise fees | |||||
Net revenues | |||||
Net revenues | (11) | ||||
New Revenue Standard Adjustments | Accounting Standards Update 2014-09 | Marketing, reservation and loyalty | |||||
Net revenues | |||||
Net revenues | (36) | ||||
Expenses | |||||
Cost of revenues | (33) | ||||
New Revenue Standard Adjustments | Accounting Standards Update 2014-09 | Other | |||||
Net revenues | |||||
Net revenues | $ (20) |
New Accounting Pronouncements_3
New Accounting Pronouncements (Impact of Adoption on Condensed Consolidated Balance Sheet) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Other current assets | $ 113 | $ 54 |
Total current assets | 850 | 334 |
Other non-current assets | 267 | 187 |
Total assets | 4,991 | 2,137 |
Liabilities and net investment | ||
Deferred income | 75 | 84 |
Total current liabilities | 702 | 411 |
Deferred income taxes | 400 | 173 |
Deferred income | 172 | 164 |
Other non-current liabilities | 150 | 46 |
Total liabilities | 3,548 | 875 |
Former Parent’s net investment | 0 | 1,257 |
Total liabilities and net investment | $ 4,991 | 2,137 |
Previously Reported Balance | ||
Assets | ||
Other current assets | 50 | |
Total current assets | 330 | |
Other non-current assets | 176 | |
Total assets | 2,122 | |
Liabilities and net investment | ||
Deferred income | 79 | |
Total current liabilities | 406 | |
Deferred income taxes | 181 | |
Deferred income | 76 | |
Other non-current liabilities | 78 | |
Total liabilities | 822 | |
Former Parent’s net investment | 1,295 | |
Total liabilities and net investment | 2,122 | |
New Revenue Standard Adjustments | Accounting Standards Update 2014-09 | ||
Assets | ||
Other current assets | 4 | |
Total current assets | 4 | |
Other non-current assets | 11 | |
Total assets | 15 | |
Liabilities and net investment | ||
Deferred income | 5 | |
Total current liabilities | 5 | |
Deferred income taxes | (8) | |
Deferred income | 88 | |
Other non-current liabilities | (32) | |
Total liabilities | 53 | |
Former Parent’s net investment | (38) | |
Total liabilities and net investment | $ 15 |
New Accounting Pronouncements_4
New Accounting Pronouncements (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of change in accounting standard - increase (decrease) | $ (15) | |||
Total cash, cash equivalents and restricted cash | $ 387 | 59 | $ 44 | $ 30 |
Cash and cash equivalents | 387 | 57 | ||
Other current assets | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash | $ 0 | 2 | ||
Accounting Standards Update 2014-09 | New Revenue Standard Adjustments | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of change in accounting standard - increase (decrease) | $ (29) | |||
Accounting Standards Update 2016-16 | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of change in accounting standard - increase (decrease) | $ 15 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)hotelperformance_obligations | Dec. 31, 2017USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of performance obligations | performance_obligations | 2 | |
Standard management agreement term (up to) | 25 years | |
Number of hotels from hotel ownership portfolio earning revenue | hotel | 2 | |
Franchise agreement, revenue recognition period (within) | 12 years | |
Co-branded credit card program, revenue recognition period (within) | 1 year | |
Capitalized contract costs | $ | $ 24 | $ 26 |
Period between performance obligation satisfaction and customer payment (or less) | 1 year |
Revenue Recognition (Contract L
Revenue Recognition (Contract Liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 247 | $ 248 |
Previously Reported Balance | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 216 | |
New Revenue Standard Adjustments | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 248 | |
Deferred initial franchise fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 128 | 116 |
Deferred initial franchise fee revenue | Previously Reported Balance | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 98 | |
Deferred initial franchise fee revenue | New Revenue Standard Adjustments | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 116 | |
Deferred loyalty program revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 74 | 54 |
Deferred co-branded credit card programs revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 0 | 37 |
Deferred hotel management fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 24 | 19 |
Deferred other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 21 | 22 |
Deferred other revenue | Previously Reported Balance | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 8 | |
Deferred other revenue | New Revenue Standard Adjustments | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 22 |
Revenue Recognition (Performanc
Revenue Recognition (Performance Obligations) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 75 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Initial franchise fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 10 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Loyalty program revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 46 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Hotel management fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 2 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Other revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 17 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 33 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Initial franchise fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 14 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Loyalty program revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 18 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Hotel management fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Other revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 23 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Initial franchise fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 13 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Loyalty program revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 7 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Hotel management fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 2 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | Other revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1 |
Remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 116 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Initial franchise fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 91 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Loyalty program revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Hotel management fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 20 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Other revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 2 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 247 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Initial franchise fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 128 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Loyalty program revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 74 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Hotel management fee revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 24 |
Remaining performance obligation, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Other revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 21 |
Remaining performance obligation, period |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Net Revenues) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | $ 604 | $ 347 | $ 1,341 | $ 967 | $ 1,280 |
Royalties and franchise fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 138 | 107 | 332 | 277 | 364 |
Marketing, reservation and loyalty | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 151 | 109 | 359 | 282 | 371 |
License and other revenues from former Parent | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 36 | 20 | 79 | 56 | |
Cost reimbursements | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 219 | 64 | 398 | 199 | |
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 28 | 25 | 83 | 75 | $ 98 |
Reportable Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 600 | 347 | 1,337 | 967 | |
Reportable Segments | Hotel Franchising | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 348 | 258 | 840 | 682 | |
Reportable Segments | Hotel Franchising | Royalties and franchise fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 137 | 104 | 326 | 271 | |
Reportable Segments | Hotel Franchising | Marketing, reservation and loyalty | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 151 | 109 | 357 | 281 | |
Reportable Segments | Hotel Franchising | License and other revenues from former Parent | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 36 | 20 | 79 | 56 | |
Reportable Segments | Hotel Franchising | Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 24 | 25 | 78 | 74 | |
Reportable Segments | Hotel Management | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 252 | 89 | 497 | 285 | |
Reportable Segments | Hotel Management | Royalties and franchise fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 1 | 3 | 6 | 6 | |
Reportable Segments | Hotel Management | Marketing, reservation and loyalty | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 0 | 0 | 2 | 1 | |
Reportable Segments | Hotel Management | Hotel management - owned properties | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 17 | 16 | 58 | 60 | |
Reportable Segments | Hotel Management | Hotel management - managed properties | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 15 | 6 | 32 | 18 | |
Reportable Segments | Hotel Management | Cost reimbursements | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 219 | 64 | 398 | 199 | |
Reportable Segments | Hotel Management | Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 0 | 0 | 1 | 1 | |
Corporate and Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | $ 4 | $ 0 | $ 4 | $ 0 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) | Jun. 01, 2018shares | May 31, 2018 | Sep. 30, 2018USD ($) | May 09, 2018USD ($) | Dec. 31, 2017shares |
Earnings Per Share [Abstract] | |||||
Tax-free distribution, conversion ratio | 1 | 1 | 1 | ||
Common stock, shares outstanding (in shares) | shares | 99,500,000 | 0 | |||
Share repurchase, authorized amount (up to) | $ 300,000,000 | ||||
Share repurchase, remaining availability | $ 241,000,000 |
Earnings Per Share (Computation
Earnings Per Share (Computation of Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||
Net income | $ 58 | $ 58 | $ 118 | $ 138 | $ 230 |
Basic weighted average shares outstanding (in shares) | 99.8 | 99.8 | 99.8 | 99.8 | |
Stock Options and restricted stock units (RSUs) (in shares) | 0.3 | 0 | 0.1 | 0 | |
Diluted weighted average shares outstanding (in shares) | 100.1 | 99.8 | 99.9 | 99.8 | |
Earnings per share | |||||
Basic (in usd per share) | $ 0.58 | $ 0.58 | $ 1.19 | $ 1.39 | |
Diluted (in usd per share) | $ 0.58 | $ 0.58 | $ 1.19 | $ 1.39 | |
Dividends: | |||||
Aggregate dividends paid to shareholders | $ 25 | $ 0 | $ 52 | $ 0 |
Earnings Per Share (Stock Repur
Earnings Per Share (Stock Repurchase Activity) (Details) $ / shares in Units, $ in Millions | 4 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Shares | |
Treasury stock, beginning (in shares) | shares | 0 |
Treasury stock, acquired (in shares) | shares | 1,000,000 |
Treasury stock, ending (in shares) | shares | 1,023,472 |
Cost | |
Treasury stock, cost, beginning | $ | $ 0 |
Treasury stock, cost, acquired | $ | 59 |
Treasury stock, cost, ending | $ | $ 59 |
Average Price Per Share | |
Treasury stock, average price per share, beginning (in usd per share) | $ / shares | $ 0 |
Treasury stock, average price per share, acquired (in usd per share) | $ / shares | 57.84 |
Treasury stock, average price per share, ending (in usd per share) | $ / shares | $ 57.84 |
Acquisition (Narrative) (Detail
Acquisition (Narrative) (Details) | May 30, 2018USD ($)hotelrooms$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 30, 2018USD ($) |
5.375% senior unsecured notes (due April 2026) | Long-term Debt | |||||
Business Acquisition [Line Items] | |||||
Debt instrument, face amount | $ 500,000,000 | ||||
Debt instrument, interest rate, stated percentage | 5.375% | 5.375% | 5.375% | ||
Term loan (due May 2025) | Long-term Debt | |||||
Business Acquisition [Line Items] | |||||
Debt instrument, face amount | $ 1,600,000,000 | $ 1,600,000,000 | $ 1,600,000,000 | ||
La Quinta Holdings Inc. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, consideration | 1,950,000,000 | ||||
Cash withheld for payments of employee related liabilities | $ 15,000,000 | ||||
Franchised hotels | hotel | 900 | ||||
Franchised hotel rooms | rooms | 89,000 | ||||
Managed hotel properties | hotel | 116 | ||||
Managed hotel properties, post business combination | hotel | 430 | ||||
Amount received by stockholders (in usd per share) | $ / shares | $ 16.8 | ||||
Aggregate amount received by stockholders in acquisition | $ 1,000,000,000 | ||||
Repayments of debt | 715,000,000 | ||||
Reserve for estimated taxes expected to be incurred with spin-off | $ 240,000,000 | ||||
Incremental net revenues | 238,000,000 | ||||
Incremental operating income | $ 31,000,000 | ||||
Pro forma net revenues | 1,694,000,000 | $ 2,041,000,000 | |||
Pro forma operating income | $ 212,000,000 | $ 263,000,000 |
Acquisition (Preliminary Alloca
Acquisition (Preliminary Allocation of Purchase Price) (Details) - USD ($) $ in Millions | May 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Acquisition of business, net of cash acquired | $ 1,696 | $ 0 | |||
Goodwill | $ 1,513 | 1,513 | $ 423 | ||
CorePoint | |||||
Business Acquisition [Line Items] | |||||
Proceeds received to repay long-term debt | $ 985 | ||||
Franchise agreements | CorePoint | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 9.50% | ||||
Management contracts | |||||
Business Acquisition [Line Items] | |||||
Weighted average life for acquired finite-lived intangible assets | 15 years | ||||
Management contracts | CorePoint | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 9.00% | ||||
Trademarks and franchise agreements | |||||
Business Acquisition [Line Items] | |||||
Weighted average life for acquired finite-lived intangible assets | 25 years | ||||
Franchise agreements and management contracts | CorePoint | |||||
Business Acquisition [Line Items] | |||||
Franchise and management fee | 5.00% | ||||
La Quinta Holdings Inc. | |||||
Business Acquisition [Line Items] | |||||
Total consideration | $ 1,951 | ||||
Cash withheld to repay La Quinta Holdings Inc.'s estimated tax liability | (240) | ||||
Net cash consideration | (15) | ||||
Acquisition of business, net of cash acquired | 1,696 | ||||
Cash escrowed/payment of long-term debt | 985 | ||||
Repayments of debt | (715) | ||||
Net cash consideration (to shareholders of La Quinta Holdings Inc.) | 981 | ||||
Total current assets | 68 | ||||
Property and equipment | 19 | ||||
Other assets | 5 | ||||
Total assets acquired | 1,216 | ||||
Total current liabilities | 105 | ||||
Deferred income taxes | 258 | ||||
Long-term debt repaid at acquisition | 715 | ||||
Assumed tax liability | 240 | ||||
Other liabilities | 11 | ||||
Total liabilities assumed | 1,329 | ||||
Net identifiable liabilities acquired | (113) | ||||
Goodwill | 1,094 | ||||
Total consideration transferred | 981 | ||||
La Quinta Holdings Inc. | CorePoint | |||||
Business Acquisition [Line Items] | |||||
Net debt adjustment | 1 | ||||
Payment related to liability | 35 | ||||
La Quinta Holdings Inc. | Accrued expenses and other current liabilities | |||||
Business Acquisition [Line Items] | |||||
Cash withheld to repay La Quinta Holdings Inc.'s estimated tax liability | $ 205 | $ 205 | |||
La Quinta Holdings Inc. | Trademarks | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 759 | ||||
La Quinta Holdings Inc. | Franchise agreements | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 228 | ||||
Franchise fee | 4.50% | ||||
Discount rate | 9.50% | ||||
La Quinta Holdings Inc. | Management contracts | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 137 |
Intangible Assets (Goodwill and
Intangible Assets (Goodwill and Intangible Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,513 | $ 423 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,031 | 689 |
Accumulated Amortization | 442 | 429 |
Net Carrying Amount | 589 | 260 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Unamortized Intangible Assets | 1,441 | 683 |
Franchise agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 863 | 640 |
Accumulated Amortization | 427 | 417 |
Net Carrying Amount | 436 | 223 |
Management agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 157 | 33 |
Accumulated Amortization | 11 | 8 |
Net Carrying Amount | 146 | 25 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5 | 10 |
Accumulated Amortization | 1 | 1 |
Net Carrying Amount | 4 | 9 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6 | 6 |
Accumulated Amortization | 3 | 3 |
Net Carrying Amount | $ 3 | $ 3 |
Intangible Assets (Change in Go
Intangible Assets (Change in Goodwill) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2017 | $ 423 |
Goodwill Acquired During 2018 | 1,094 |
Adjustments to Goodwill | (4) |
Balance as of September 30, 2018 | 1,513 |
Hotel Franchising | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2017 | 385 |
Goodwill Acquired During 2018 | 1,027 |
Adjustments to Goodwill | (4) |
Balance as of September 30, 2018 | 1,408 |
Hotel Management | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2017 | 38 |
Goodwill Acquired During 2018 | 67 |
Adjustments to Goodwill | 0 |
Balance as of September 30, 2018 | $ 105 |
Intangible Assets (Amortization
Intangible Assets (Amortization Expense of Amortizable Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 10 | $ 5 | $ 22 | $ 15 |
Franchise agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 6 | 4 | 15 | 11 |
Management agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 3 | 1 | 5 | 2 |
Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1 | $ 0 | $ 2 | $ 2 |
Franchising, Marketing and Re_2
Franchising, Marketing and Reservation Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | $ 604 | $ 347 | $ 1,341 | $ 967 | $ 1,280 |
Interest earned on unpaid franchising development advance notes | 0 | 0 | 1 | 1 | |
Bad debt expense (less than $1 million for both the three and nine months ended September 30, 2018 and 2017) | 1 | 1 | |||
Proceeds from development advance notes (less than $1 million for three months ended September 30, 2017) | 1 | 1 | 11 | 4 | |
Development advances | 11 | 1 | 22 | 5 | |
Franchisees and hotel owners | |||||
Disaggregation of Revenue [Line Items] | |||||
Development advance notes | 76 | $ 76 | $ 64 | ||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Franchise/management agreement term | 10 years | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Franchise/management agreement term | 20 years | ||||
Initial franchise fee revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | 5 | 4 | $ 14 | 11 | |
Forgiveness of note receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Net Revenues | $ 2 | $ 2 | $ 5 | $ 5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Loss Carryforwards [Line Items] | |||||
Effective tax rate | 28.40% | 42.00% | 28.50% | 41.50% | |
Federal and state | |||||
Operating Loss Carryforwards [Line Items] | |||||
Cash income tax payments, net of refunds | $ 11 | $ 27 | |||
Foreign | |||||
Operating Loss Carryforwards [Line Items] | |||||
Cash income tax payments, net of refunds | $ 2 | $ 9 | $ 9 | ||
Wyndham Worldwide | Federal and state | |||||
Operating Loss Carryforwards [Line Items] | |||||
Cash income tax payments, net of refunds | $ 27 | $ 75 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Losses recognized in income from freestanding foreign currency exchange contracts | $ 3 | $ 2 | ||
Foreign currency impact of highly inflationary countries | $ 4 | $ 0 | 4 | $ 0 |
Management guarantee receivable | 40 | 40 | ||
Carrying Amount | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total debt | 2,145 | 2,145 | ||
Estimated Fair Value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total debt | $ 2,176 | $ 2,176 |
Long-Term Debt and Borrowing _3
Long-Term Debt and Borrowing Arrangements (Schedule of Company's Indebtedness) (Details) - USD ($) | Sep. 30, 2018 | May 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Capital leases | $ 67,000,000 | $ 0 | ||
Total long-term debt | 2,145,000,000 | |||
Less: Current portion of long-term debt | 21,000,000 | 0 | ||
Long-term debt | 2,124,000,000 | 0 | ||
Affiliated Entity | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 184,000,000 | |||
Less: Current portion of long-term debt | 103,000,000 | |||
Long-term debt | 81,000,000 | |||
$750 million revolving credit facility (due May 2023) | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 750,000,000 | $ 750,000,000 | ||
Debt issuance costs | 5,000,000 | |||
Line of Credit | Term loan (due May 2025) | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 1,585,000,000 | 0 | ||
Line of Credit | $750 million revolving credit facility (due May 2023) | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 750,000,000 | |||
Long-term debt | $ 0 | 0 | ||
Long-term Debt | 5.375% senior unsecured notes (due April 2026) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 5.375% | 5.375% | ||
Senior Notes | 5.375% senior unsecured notes (due April 2026) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 5.375% | |||
Long-term debt | $ 493,000,000 | 0 | ||
Debt due to former Parent | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 0 | $ 184,000,000 | ||
Term loan and senior unsecured notes | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 21,000,000 |
Long-Term Debt and Borrowing _4
Long-Term Debt and Borrowing Arrangements (Schedule of Outstanding Debt Maturities) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Within 1 year | $ 21 |
Between 1 and 2 years | 21 |
Between 2 and 3 years | 21 |
Between 3 and 4 years | 21 |
Between 4 and 5 years | 21 |
Thereafter | 2,040 |
Total | $ 2,145 |
Long-Term Debt and Borrowing _5
Long-Term Debt and Borrowing Arrangements (Schedule of Available Capacity Under Borrowing Arrangements) (Details) - $750 million revolving credit facility (due May 2023) - USD ($) | Sep. 30, 2018 | May 31, 2018 |
Debt Instrument [Line Items] | ||
Total capacity | $ 750,000,000 | $ 750,000,000 |
Less: Letters of credit | 14,000,000 | |
Available capacity | $ 736,000,000 |
Long-Term Debt and Borrowing _6
Long-Term Debt and Borrowing Arrangements (Narrative) (Details) - USD ($) | May 31, 2018 | May 30, 2018 | May 31, 2018 | Apr. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||||||
Bridge loan | $ 1,500,000,000 | ||||||||
Capital lease obligation | $ 67,000,000 | $ 67,000,000 | $ 0 | ||||||
Gains recognized in Accumulated other comprehensive income | 5,000,000 | 7,000,000 | |||||||
Interest expense | 24,000,000 | $ 2,000,000 | 36,000,000 | $ 5,000,000 | |||||
Interest paid | 22,000,000 | 22,000,000 | |||||||
Affiliated Entity | |||||||||
Debt Instrument [Line Items] | |||||||||
Contribution of outstanding borrowings due to former Parent | 197,000,000 | ||||||||
Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Total notional amount | $ 1,000,000,000 | ||||||||
Interest Rate Swap 1 | |||||||||
Debt Instrument [Line Items] | |||||||||
Total notional amount | $ 500,000,000 | ||||||||
Term of derivative contract | 5 years | ||||||||
Fixed interest rate on interest rate swap | 2.66% | ||||||||
Interest Rate Swap 2 | |||||||||
Debt Instrument [Line Items] | |||||||||
Total notional amount | $ 500,000,000 | ||||||||
Term of derivative contract | 2 years 6 months | ||||||||
Fixed interest rate on interest rate swap | 2.52% | ||||||||
Wyndham Worldwide | |||||||||
Debt Instrument [Line Items] | |||||||||
Capital lease obligation | 66,000,000 | 66,000,000 | |||||||
Capital lease asset | $ 43,000,000 | $ 43,000,000 | |||||||
Wyndham Worldwide | Affiliated Entity | |||||||||
Debt Instrument [Line Items] | |||||||||
Contribution of outstanding borrowings due to former Parent | $ 197,000,000 | ||||||||
Debt due to former Parent | $ 184,000,000 | ||||||||
Capital lease | Wyndham Worldwide | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate, stated percentage | 4.50% | 4.50% | |||||||
Term loan (due May 2025) | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization of loan, equal installments | 1.00% | ||||||||
Mandatory prepayments, percentage net cash proceeds from issuances or incurrence of debt | 100.00% | ||||||||
Mandatory prepayments, percentage of net cash proceeds from certain sales or other dispositions of assets | 100.00% | ||||||||
Mandatory prepayments, percentage of net cash proceeds from certain sales or other disposition of assets, step down one | 50.00% | ||||||||
Mandatory prepayments, percentage of net cash proceeds from certain sales or other disposition of assets, step down two | 0.00% | ||||||||
Mandatory prepayment in excess of cash flow | 50.00% | ||||||||
Mandatory prepayment in excess of cash flow, step down one | 25.00% | ||||||||
Mandatory prepayment in excess of cash flow, step down two | 0.00% | ||||||||
Term loan (due May 2025) | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 1,600,000,000 | $ 1,600,000,000 | $ 1,600,000,000 | ||||||
Aggregate fair value of interest rate swaps | $ 9,000,000 | $ 9,000,000 | |||||||
Senior Secured Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate amount of revolving loans (not to exceed) | $ 550,000,000 | $ 550,000,000 | |||||||
Percentage of EBITDA (not to exceed) | 100.00% | ||||||||
5.375% senior unsecured notes (due April 2026) | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate, stated percentage | 5.375% | 5.375% | |||||||
Net proceeds from issuance of debt | 493,000,000 | ||||||||
5.375% senior unsecured notes (due April 2026) | Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 500,000,000 | ||||||||
Debt instrument, interest rate, stated percentage | 5.375% | 5.375% | 5.375% | ||||||
5.375% senior unsecured notes (due April 2026) | Long-term Debt | Wyndham Worldwide | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments to obtain financing commitments | $ 12,000,000 | ||||||||
LIBOR | Term loan (due May 2025) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||||
Basis spread on variable rate, floor (as a percent) | 0.00% | ||||||||
Base Rate | Term loan (due May 2025) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.75% | ||||||||
$750 million revolving credit facility (due May 2023) | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | |||||
Commitment fee percentage | 0.20% | ||||||||
Debt issuance costs | $ 5,000,000 | $ 5,000,000 | |||||||
$750 million revolving credit facility (due May 2023) | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||
$750 million revolving credit facility (due May 2023) | Minimum | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||||
$750 million revolving credit facility (due May 2023) | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||
$750 million revolving credit facility (due May 2023) | Maximum | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 2.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | May 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||||
Litigation reserves | $ 28,000,000 | $ 28,000,000 | $ 3,000,000 | |||
Litigation receivable covered by insurance | $ 25,000,000 | $ 25,000,000 | ||||
Post-closing credit support, share of incurred losses | 0.33 | |||||
Post-closing credit support (up to) | $ 87,000,000 | |||||
Post-closing credit support, liability | 41,000,000 | |||||
Post-closing credit support, receivable | $ 27,000,000 | |||||
European vacation rental business, life of royalty fee | 20 years | |||||
European vacation rental business, royalty fee percentage | 1.00% | 1.00% | ||||
Royalty fees | $ 3,000,000 | $ 4,000,000 | ||||
Separation and distribution agreement, assumed share of contingent liability | 0.33 | 0.33 | ||||
Remaining amount of contingent liability assumed | $ 27,000,000 | $ 27,000,000 | ||||
Affiliated Entity | ||||||
Loss Contingencies [Line Items] | ||||||
Post-closing credit support, share of incurred losses | 0.67 | |||||
Post-closing credit support (up to) | $ 46,000,000 | |||||
Receivable for share of escrow deposit released | 15,000,000 | 15,000,000 | ||||
Post-closing credit support, liability | 22,000,000 | 22,000,000 | ||||
Post-closing credit support, receivable | $ 15,000,000 | $ 15,000,000 | ||||
Separation and distribution agreement, assumed share of contingent liability | 0.67 | 0.67 | ||||
Other non-current liabilities | ||||||
Loss Contingencies [Line Items] | ||||||
Post-closing credit support (up to) | $ 63,000,000 | $ 63,000,000 | ||||
Remaining amount of contingent liability assumed | 26,000,000 | 26,000,000 | ||||
Receivable | ||||||
Loss Contingencies [Line Items] | ||||||
Post-closing credit support (up to) | 42,000,000 | 42,000,000 | ||||
Other current assets | ||||||
Loss Contingencies [Line Items] | ||||||
Receivables due from former parent | 32,000,000 | 32,000,000 | ||||
Current liabilities | ||||||
Loss Contingencies [Line Items] | ||||||
Remaining amount of contingent liability assumed | 1,000,000 | 1,000,000 | ||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Range of possible loss, portion not accrued (up to) | 28,000,000 | 28,000,000 | ||||
Wyndham Hotels & Resorts, Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Annual cap | 26,000,000 | 26,000,000 | ||||
Guarantor obligations, current carrying value | 23,000,000 | 23,000,000 | 23,000,000 | |||
Guarantor offsetting asset carrying value | 11,000,000 | 11,000,000 | 12,000,000 | |||
Amortization expense, contingent asset (less than for 6 months ended 2018 and 2017) | 1,000,000 | $ 1,000,000 | 1,000,000 | $ 3,000,000 | ||
Guarantees subject to recapture provisions | 44,000,000 | 44,000,000 | ||||
Wyndham Hotels & Resorts, Inc. | Other non-current liabilities | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, current carrying value | 15,000,000 | 15,000,000 | 16,000,000 | |||
Wyndham Hotels & Resorts, Inc. | Accrued expenses | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, current carrying value | 8,000,000 | 8,000,000 | 7,000,000 | |||
Wyndham Hotels & Resorts, Inc. | Other non-current assets | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor offsetting asset carrying value | 10,000,000 | 10,000,000 | 1,000,000 | |||
Guarantees subject to recapture provisions | 42,000,000 | 42,000,000 | 41,000,000 | |||
Wyndham Hotels & Resorts, Inc. | Other current assets | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor offsetting asset carrying value | 1,000,000 | 1,000,000 | $ 11,000,000 | |||
Guarantees subject to recapture provisions | 2,000,000 | $ 2,000,000 | ||||
Wyndham Hotels & Resorts, Inc. | Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, term | nine | |||||
Guarantees, remaining life | 4 years | |||||
Wyndham Hotels & Resorts, Inc. | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, term | ten | |||||
Annual cap | $ 104,000,000 | $ 104,000,000 | ||||
Guarantees, remaining life | 6 years | |||||
Wyndham Hotels & Resorts, Inc. | Weighted Average | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, term | five |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Millions | Nov. 30, 2018shares | Jun. 01, 2018shares | May 31, 2018$ / shares | May 17, 2018shares | Jul. 31, 2019shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2018$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | May 14, 2018shares | Dec. 31, 2017$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Equity award, vesting period | 4 years | |||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 11.72 | $ 11.72 | $ 11.72 | |||||||
Common stock conversion | 1 | 1 | 1 | |||||||
Separation related costs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation, portion recognized from modification of Stock Plan | $ | $ 10 | $ 30 | ||||||||
Separation related costs, modification of stock plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation, portion recognized from modification of Stock Plan | $ | 15 | |||||||||
Non-employee directors | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense for non-employee directors | $ | $ 1 | $ 1 | ||||||||
RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 500,000 | 500,000 | ||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 0 | $ 61.40 | $ 61.40 | $ 61.40 | ||||||
Vested (in shares) | 0 | |||||||||
RSUs | Scenario, Forecast | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested (in shares) | 100,000 | |||||||||
Options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 500,000 | |||||||||
RSUs and PSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested (in shares) | 100,000 | |||||||||
RSUs, Granted Prior to 2018 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 100,000 | |||||||||
Grant date fair value (in dollars per share) | $ / shares | $ 61.58 | $ 61.58 | $ 61.58 | $ 60.80 | ||||||
Vested (in shares) | 200,000 | |||||||||
RSUs, Granted Prior to 2018 | Scenario, Forecast | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested (in shares) | 300,000 | |||||||||
Wyndham Hotels & Resorts, Inc. 2018 Equity and Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Maximum number of shares approved (in shares) | 10,000,000 | |||||||||
Remaining shares available (in shares) | 7,400,000 | 7,400,000 | 7,400,000 | |||||||
Stock-based compensation expense | $ | $ 2 | $ 3 | ||||||||
Wyndham Worldwide Corporation Equity and Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ | $ 10 | $ 33 |
Stock-Based Compensation (Incen
Stock-Based Compensation (Incentive Equity Awards Activity) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | May 17, 2018 | Sep. 30, 2018 | Sep. 30, 2018 |
Weighted Average Grant Price | |||
Ending balance (in dollars per share) | $ 11.72 | $ 11.72 | |
Number of Options | |||
Beginning balance (in shares) | 0 | ||
Granted (in shares) | 0.5 | ||
Vested/exercised (in shares) | 0 | ||
Ending balance (in shares) | 0.5 | 0.5 | |
Weighted Average Grant Price | |||
Beginning balance (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 61.40 | ||
Vested/exercised (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 61.40 | $ 61.40 | |
RSUs | |||
Number of RSUs | |||
Beginning balance (in shares) | 0 | ||
Granted (in shares) | 0.5 | 0.5 | |
Vested/exercised/canceled (in shares) | 0 | ||
Ending balance (in shares) | 0.5 | 0.5 | |
Weighted Average Grant Price | |||
Beginning balance (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 61.40 | ||
Vested/exercised/canceled (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 61.40 | $ 61.40 | |
Weighted Average Grant Price | |||
Expected to vest (in shares) | 29 | ||
Compensation expense not yet recognized, weighted average period | 3 years 8 months | ||
Options | |||
Number of RSUs | |||
Granted (in shares) | 0.5 | ||
Performance Shares | |||
Number of RSUs | |||
Beginning balance (in shares) | 0.1 | ||
Granted (in shares) | 0 | ||
Transferred from former Parent (in shares) | 0 | ||
Vested/exercised/canceled (in shares) | (0.1) | ||
Ending balance (in shares) | 0 | 0 | |
Weighted Average Grant Price | |||
Beginning balance (in dollars per share) | $ 60.80 | ||
Granted (in dollars per share) | 0 | ||
Transferred from former Parent (in dollars per share) | 0 | ||
Vested/exercised/canceled (in dollars per share) | 60.80 | ||
Ending balance (in dollars per share) | $ 0 | $ 0 | |
Weighted Average Grant Price | |||
Aggregate unrecognized compensation expense | $ 6 | $ 6 | |
Compensation expense not yet recognized, weighted average period | 3 years 8 months | ||
RSUs, Granted Prior to 2018 | |||
Number of RSUs | |||
Beginning balance (in shares) | 0.3 | ||
Granted (in shares) | 0.1 | ||
Transferred from former Parent (in shares) | 0.2 | ||
Vested/exercised/canceled (in shares) | (0.2) | ||
Ending balance (in shares) | 0.4 | 0.4 | |
Weighted Average Grant Price | |||
Beginning balance (in dollars per share) | $ 60.80 | ||
Granted (in dollars per share) | 64.46 | ||
Transferred from former Parent (in dollars per share) | 61.65 | ||
Vested/exercised/canceled (in dollars per share) | 60.84 | ||
Ending balance (in dollars per share) | $ 61.58 | $ 61.58 | |
Weighted Average Grant Price | |||
Expected to vest (in shares) | 0.4 | ||
Aggregate unrecognized compensation expense | $ 10 | $ 10 | |
Compensation expense not yet recognized, weighted average period | 6 months |
Stock-Based Compensation (Valua
Stock-Based Compensation (Valuation Assumptions) (Details) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Grant date strike price (in dollars per share) | $ 61.40 |
Expected volatility | 22.72% |
Expected life | 4 years 3 months |
Risk-free interest rate | 2.73% |
Projected dividend yield | 1.63% |
Segment Information (Summary of
Segment Information (Summary of Net Revenues and Adjusted EBITDA by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Net Revenues | $ 604 | $ 347 | $ 1,341 | $ 967 | $ 1,280 |
Adjusted EBITDA | 166 | 124 | 382 | 307 | |
Reportable Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenues | 600 | 347 | 1,337 | 967 | |
Adjusted EBITDA | 183 | 133 | 423 | 336 | |
Reportable Segments | Hotel Franchising | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenues | 348 | 258 | 840 | 682 | |
Adjusted EBITDA | 178 | 132 | 394 | 321 | |
Reportable Segments | Hotel Management | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenues | 252 | 89 | 497 | 285 | |
Adjusted EBITDA | 5 | 1 | 29 | 15 | |
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Net Revenues | 4 | 0 | 4 | 0 | |
Adjusted EBITDA | $ (17) | $ (9) | $ (41) | $ (29) |
Segment Information (Reconcilia
Segment Information (Reconciliation of Net Income to Adjusted EBITDA) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | |||||
Net income | $ 58 | $ 58 | $ 118 | $ 138 | $ 230 |
Provision for income taxes | 23 | 42 | 47 | 98 | $ 13 |
Depreciation and amortization | 30 | 19 | 71 | 56 | |
Interest expense, net | 24 | 2 | 36 | 5 | |
Stock-based compensation | 3 | 2 | 6 | 8 | |
Separation-related | 17 | 0 | 63 | 0 | |
Transaction-related, net | 7 | 1 | 37 | 1 | |
Foreign currency impact of highly inflationary countries | 4 | 0 | 4 | 0 | |
Restructuring | 0 | 0 | 0 | 1 | |
Adjusted EBITDA | $ 166 | $ 124 | $ 382 | $ 307 |
Separation-Related and Transa_2
Separation-Related and Transaction-Related Costs (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Separation-related costs | $ 17 | $ 0 | $ 63 | $ 0 | |
Transaction-related, net | 7 | $ 1 | 37 | 1 | |
Pre-tax gain on sale of hotel brand | $ 23 | 23 | $ 0 | ||
La Quinta Hotel Franchising and Management Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Transaction-related, net | 60 | ||||
Spin-Off, Hotel Group Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Separation-related costs | $ 17 | $ 63 |
Transactions With Former Pare_3
Transactions With Former Parent (Net Parent Transfers) (Details) - Wyndham Worldwide - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | $ (38) | $ (91) |
Cash pooling and general financing activities | ||
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | (110) | (220) |
Indirect general corporate overhead allocations | ||
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | 12 | 25 |
Corporate allocations for shared services | ||
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | 13 | 21 |
Stock-based compensation allocations | ||
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | 20 | 8 |
Income taxes | ||
Related Party Transaction [Line Items] | ||
Transfer from (to) Parent | $ 27 | $ 75 |
Transactions With Former Pare_4
Transactions With Former Parent (Net Contributions From Former Parent) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Related Party Transaction [Line Items] | ||
Capital contribution from former Parent | $ 106 | $ 0 |
Dividend to former Parent | (90) | $ 0 |
Net contribution from former Parent | 233 | |
Wyndham Worldwide | ||
Related Party Transaction [Line Items] | ||
Contribution of outstanding borrowings due to former Parent | 197 | |
Capital contribution from former Parent | 106 | |
Dividend to former Parent | (90) | |
Other contributions from former Parent, net | 20 | |
Net contribution from former Parent | $ 233 |
Transactions With Former Pare_5
Transactions With Former Parent (Narrative) (Details) - Wyndham Worldwide - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||
Outstanding borrowings from Parent | $ 184 | |||
Revenue from former parent | $ 4 | $ 4 | ||
Information technology support, financial services, human resources and other shared services | ||||
Related Party Transaction [Line Items] | ||||
Expense for services provided by Parent | 13 | $ 21 | ||
Indirect general corporate overhead allocations | ||||
Related Party Transaction [Line Items] | ||||
Expense for services provided by Parent | 12 | 25 | ||
Insurance | ||||
Related Party Transaction [Line Items] | ||||
Expense for services provided by Parent | 1 | 2 | ||
Defined contribution benefit plan | ||||
Related Party Transaction [Line Items] | ||||
Expense for services provided by Parent | $ 2 | $ 4 |