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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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82-3356232
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(State or Other Jurisdiction
of Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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22 Sylvan Way
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07054
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Parsippany, New Jersey
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(Zip Code)
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(Address of Principal Executive Offices)
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Title of each Class
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Name of each exchange on which registered
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Common Stock, Par Value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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þ
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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||
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•
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continually enhance the competitive position and awareness of our brands;
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•
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provide cost-effective new-construction and renovation prototypes to enhance owners’ returns;
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•
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offer best-in-class, cost-effective technology solutions; and
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•
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drive reservations to our franchisees through our proprietary booking and third-party distribution channels.
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Region
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Hotels
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Room Supply
(millions)
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Revenues
(billions)
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Brand
Affiliation
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|||||
United States/Canada
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|
61,602
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5.7
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$
|
177
|
|
|
70
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%
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Europe
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|
69,870
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4.8
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|
168
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|
40
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%
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Asia Pacific
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40,090
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5.0
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|
|
130
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54
|
%
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Latin America/Middle East
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|
19,470
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|
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2.1
|
|
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65
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43
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%
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Chain Scale
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|
% of
U.S. Market
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|
Typical Amenities
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Economy
|
|
12%
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|
Basic amenities
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Midscale
|
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9%
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|
Limited breakfast, selected business services
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Upper Midscale
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11%
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|
Restaurants, vending, selected business services and some recreational facilities
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Upscale
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16%
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Full range of on-property amenities and services, including restaurants, recreational facilities and business centers
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Upper Upscale
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13%
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Full range of on-property amenities and services
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Luxury
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11%
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Luxury accommodations and extensive range of on-property amenities and services
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Brand Affiliated
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72%
|
|
|
|
|
|
|
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Independents
|
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28%
|
|
|
|
|
|
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Total
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100%
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|
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# of
Properties
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|
% of
System
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||||
United States
|
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6,358
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|
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70
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%
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Asia Pacific
|
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1,615
|
|
|
|
18
|
%
|
Canada
|
|
|
490
|
|
|
|
5
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%
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Europe/Middle East/Africa
|
|
|
479
|
|
|
|
5
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%
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Latin America
|
|
|
215
|
|
|
|
2
|
%
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Global
|
|
|
9,157
|
|
|
|
100
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%
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# of
Properties
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|
% of
System
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||||
Economy
|
|
|
5,733
|
|
|
|
62
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%
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Midscale
|
|
|
2,814
|
|
|
|
31
|
%
|
Lifestyle
|
|
|
255
|
|
|
|
3
|
%
|
Upscale
|
|
|
245
|
|
|
|
3
|
%
|
Extended Stay
|
|
|
110
|
|
|
|
1
|
%
|
|
|
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9,157
|
|
|
|
100
|
%
|
|
As of December 31,
|
||||||||||||||||
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2018
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2017
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2016
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||||||||||||
|
Properties
|
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Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
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||||||
Beginning balance
|
8,422
|
|
|
728,200
|
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|
8,035
|
|
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697,600
|
|
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7,812
|
|
|
678,000
|
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Additions
|
1,512
|
|
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145,800
|
|
|
811
|
|
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72,200
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|
627
|
|
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58,700
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Deletions
|
(777)
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(64,100)
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(424)
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(41,600)
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(404)
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(39,100)
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||||||
Ending balance
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9,157
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|
809,900
|
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|
8,422
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728,200
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8,035
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697,600
|
|
|
|
|
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North America
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Asia Pacific
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Europe,
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||||||||||||
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Global RevPAR
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U.S.
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Canada
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Greater China
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Rest of Asia
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Middle East and Africa
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Latin America
|
|
Total
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||||||||
Economy
|
|
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|
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||||||||
Super 8
|
$
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28.01
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|
|
Properties
|
|
1,590
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|
|
126
|
|
|
1,168
|
|
|
—
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|
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4
|
|
|
1
|
|
|
2,889
|
|
|
|
Rooms
|
|
95,955
|
|
|
8,050
|
|
|
73,355
|
|
|
—
|
|
|
618
|
|
|
50
|
|
|
178,028
|
||
Days Inn
|
$
|
36.21
|
|
|
Properties
|
|
1,456
|
|
|
113
|
|
|
75
|
|
|
15
|
|
|
63
|
|
|
6
|
|
|
1,728
|
|
|
|
Rooms
|
|
109,366
|
|
|
8,908
|
|
|
12,766
|
|
|
2,218
|
|
|
3,984
|
|
|
436
|
|
|
137,678
|
||
Travelodge
|
$
|
38.98
|
|
|
Properties
|
|
337
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
435
|
|
|
|
Rooms
|
|
22,413
|
|
|
8,592
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,005
|
||
Microtel
|
$
|
43.00
|
|
|
Properties
|
|
306
|
|
|
17
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
6
|
|
|
343
|
|
|
|
Rooms
|
|
21,713
|
|
|
1,482
|
|
|
—
|
|
|
1,037
|
|
|
—
|
|
|
715
|
|
|
24,947
|
||
Howard Johnson
|
$
|
31.58
|
|
|
Properties
|
|
188
|
|
|
28
|
|
|
65
|
|
|
3
|
|
|
5
|
|
|
49
|
|
|
338
|
|
|
|
Rooms
|
|
15,112
|
|
|
1,887
|
|
|
20,577
|
|
|
1,107
|
|
|
500
|
|
|
2,998
|
|
|
42,181
|
||
Midscale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
La Quinta
|
$
|
64.05
|
|
|
Properties
|
|
898
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
914
|
|
|
|
Rooms
|
|
87,386
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,937
|
|
|
89,456
|
||
Ramada
|
$
|
39.65
|
|
|
Properties
|
|
335
|
|
|
81
|
|
|
96
|
|
|
70
|
|
|
203
|
|
|
26
|
|
|
811
|
|
|
|
Rooms
|
|
40,149
|
|
|
7,834
|
|
|
21,318
|
|
|
12,530
|
|
|
29,409
|
|
|
3,374
|
|
|
114,614
|
||
Baymont
|
$
|
39.64
|
|
|
Properties
|
|
509
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
513
|
|
|
|
Rooms
|
|
40,073
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
40,541
|
||
AmericInn
|
$
|
51.62
|
|
|
Properties
|
|
204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
|
Rooms
|
|
12,072
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,072
|
||
Wingate
|
$
|
55.28
|
|
|
Properties
|
|
154
|
|
|
8
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
164
|
|
|
|
Rooms
|
|
13,707
|
|
|
787
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
14,858
|
||
Wyndham Garden
|
$
|
50.92
|
|
|
Properties
|
|
71
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
17
|
|
|
23
|
|
|
119
|
|
|
|
Rooms
|
|
11,690
|
|
|
479
|
|
|
403
|
|
|
374
|
|
|
2,765
|
|
|
3,122
|
|
|
18,833
|
||
Ramada Encore
|
$
|
29.26
|
|
|
Properties
|
|
—
|
|
|
—
|
|
|
18
|
|
|
12
|
|
|
20
|
|
|
10
|
|
|
60
|
|
|
|
Rooms
|
|
—
|
|
|
—
|
|
|
3,287
|
|
|
3,071
|
|
|
2,458
|
|
|
1,355
|
|
|
10,171
|
||
Extended Stay
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hawthorn
|
$
|
55.18
|
|
|
Properties
|
|
103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
110
|
|
|
|
|
|
9,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
—
|
|
|
10,633
|
||
Lifestyle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trademark
|
$
|
70.28
|
|
|
Properties
|
|
27
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
84
|
|
|
|
Rooms
|
|
4,949
|
|
|
497
|
|
|
—
|
|
|
—
|
|
|
8,620
|
|
|
—
|
|
|
14,066
|
||
TRYP
|
$
|
56.38
|
|
|
Properties
|
|
9
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
78
|
|
|
19
|
|
|
110
|
|
|
|
Rooms
|
|
1,062
|
|
|
—
|
|
|
95
|
|
|
316
|
|
|
11,099
|
|
|
2,947
|
|
|
15,519
|
||
Dazzler
|
$
|
60.77
|
|
|
Properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
|
Rooms
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,551
|
|
|
1,551
|
||
Esplendor
|
$
|
50.58
|
|
|
Properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
|
Rooms
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
958
|
|
|
958
|
||
Upscale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wyndham
|
$
|
62.51
|
|
|
Properties
|
|
40
|
|
|
—
|
|
|
28
|
|
|
13
|
|
|
15
|
|
|
36
|
|
|
132
|
|
|
|
Rooms
|
|
11,455
|
|
|
—
|
|
|
8,479
|
|
|
2,180
|
|
|
3,095
|
|
|
8,394
|
|
|
33,603
|
||
Wyndham Grand
|
$
|
72.51
|
|
|
Properties
|
|
12
|
|
|
—
|
|
|
16
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
37
|
|
|
|
Rooms
|
|
3,389
|
|
|
—
|
|
|
5,713
|
|
|
194
|
|
|
2,057
|
|
|
—
|
|
|
11,353
|
||
Dolce
|
$
|
86.71
|
|
|
Properties
|
|
10
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
20
|
|
|
|
Rooms
|
|
2,202
|
|
|
276
|
|
|
—
|
|
|
—
|
|
|
1,546
|
|
|
—
|
|
|
4,024
|
||
Total
(a)
|
$
|
40.80
|
|
|
Properties
|
|
6,358
|
|
|
490
|
|
|
1,470
|
|
|
145
|
|
|
479
|
|
|
215
|
|
|
9,157
|
|
|
|
Rooms
|
|
506,068
|
|
|
39,590
|
|
|
146,181
|
|
|
23,074
|
|
|
66,855
|
|
|
28,165
|
|
|
809,933
|
(a)
|
Total includes 3,446 rooms (109 properties) in the United States, 315 rooms (3 properties) in Canada, 47 rooms (11 properties) in Rest of Asia and 34 rooms (1 property) in the Latin America under affiliation arrangements with Wyndham Destinations.
|
•
|
our ability to meet our objectives for growth in the number of our franchised hotels, hotel rooms in our franchise system and hotels under management and to retain franchisees and hotel management contracts;
|
•
|
the number, occupancy and room rates of hotels operating under our franchise and management agreements;
|
•
|
the delay of hotel openings in our pipeline;
|
•
|
the supply and demand for hotel rooms;
|
•
|
our ability to develop and maintain positive relations and contractual arrangements with current and potential franchisees and hotel owners under our hotel management agreements;
|
•
|
competition from other franchised hotel brands, which may require us to offer terms to prospective franchisees and hotel owners less favorable to us than current franchise agreements;
|
•
|
our franchisees’ pricing decisions, which may indirectly affect our revenues;
|
•
|
the quality of the services provided by franchisees, which may adversely affect our image, reputation and brand value for both prospective guests and prospective franchisees and hotel owners;
|
•
|
our ability to successfully market our rewards program and the level of participation in the program by our franchisees and guests;
|
•
|
the bankruptcy or insolvency of a significant number of our franchised or managed hotels, which could impair our ability to collect outstanding fees or other amounts due or otherwise exercise our contractual rights and result in the early termination of our contracts;
|
•
|
the availability of financing to allow prospective franchisees to build new hotels;
|
•
|
financial difficulties of franchisees, owners or other developers that have development advance notes with us or who have received loans or other financial incentives from us;
|
•
|
disputes with franchisees, which may result in litigation and the loss of management contracts;
|
•
|
the failure of our franchisees to make investments necessary to maintain or improve their properties;
|
•
|
adverse events occurring at one of our franchisees’ locations, such as personal injuries, food tampering, contamination or the spread of illness;
|
•
|
negative publicity from online social media postings and related media reports, which could damage our hotel brands;
|
•
|
our ability to successfully market our hotel brands, programs or service or pilot new initiatives;
|
•
|
our management contract with CorePoint Lodging, Inc. (“CorePoint”), which in aggregate owns approximately 71% of our managed hotels;
|
•
|
the laws, regulations and legislation internationally and domestically, and on a federal, state or local level, concerning the franchise or hotel industry, which may make franchising or managing hotels more onerous, more expensive or less profitable;
|
•
|
our failure to adequately protect and maintain our trademarks and other intellectual property rights;
|
•
|
competition from short-term online rental properties and agencies;
|
•
|
the relative mix of branded hotels in the various hotel industry price categories;
|
•
|
corporate budgets and spending and cancellations, deferrals or renegotiations of group business;
|
•
|
seasonal volatility in our business;
|
•
|
operating costs, including as a result of inflation, energy costs and labor costs such as minimum wage increases and unionization, workers’ compensation and health-care related costs and insurance;
|
•
|
our ability to keep pace with technological developments, which could impair our competitive position;
|
•
|
disruptions, including non-renewal or termination of agreements, in relationships with third parties; including marketing alliances and affiliations with e-commerce channels; and
|
•
|
disputes concerning our operations, including consumer disputes, organized labor activities, class actions and associated litigation.
|
•
|
our cash flows from operations or available lines of credit may be insufficient to meet required payments of principal and interest, which could result in a default and acceleration of the underlying debt and under other debt instruments that contain cross-default provisions;
|
•
|
we may be unable to comply with the terms of the financial covenants under our debt instruments which could result in a default and acceleration of the underlying debt and under other debt instruments that contain cross-default provisions;
|
•
|
our leverage may adversely affect our ability to obtain additional financing on favorable terms or at all;
|
•
|
our leverage may require the dedication of a significant portion of our cash flows to the payment of principal and interest, thus reducing the availability of cash flows to fund working capital, capital expenditures, dividends, share repurchases and other operating needs;
|
•
|
increases in interest rates may adversely affect our financing costs and result in increases in our hedging costs;
|
•
|
rating agency downgrades of our debt could increase our borrowing costs and prevent us from obtaining additional financing on favorable terms or at all;
|
•
|
failure or non-performance of counterparties to foreign exchange and interest rate hedging transactions could result in losses; and
|
•
|
the inability of franchisees that have received mezzanine and other loans from us to pay back such loans.
|
•
|
success or failure of our business strategies;
|
•
|
failure to achieve our growth and performance objectives;
|
•
|
our quarterly or annual earnings, or those of other companies in our industry;
|
•
|
our ability to obtain financing as needed;
|
•
|
a shift in our investor base;
|
•
|
changes in laws and regulations affecting our business;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
announcements by us or our competitors of significant acquisitions or dispositions;
|
•
|
negative views about our stock or our business expressed by securities analysts;
|
•
|
changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
•
|
the operating and stock price performance of other comparable companies;
|
•
|
overall market fluctuations;
|
•
|
actual or anticipated fluctuations in our operating results due to the seasonality of our business and other factors related to our business; and
|
•
|
general economic conditions.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan
|
||||||
October 2018
|
308,921
|
|
|
$
|
49.95
|
|
|
308,921
|
|
|
$
|
225,374,504
|
|
November 2018
|
435,811
|
|
|
48.18
|
|
|
435,811
|
|
|
204,375,095
|
|
||
December 2018
(a)
|
500,965
|
|
|
46.96
|
|
|
500,965
|
|
|
180,851,596
|
|
||
Total
|
1,245,697
|
|
|
$
|
48.13
|
|
|
1,245,697
|
|
|
$
|
180,851,596
|
|
|
June 1,
2018
|
|
December 31, 2018
|
||
Wyndham Hotels & Resorts, Inc.
|
100.00
|
|
|
74.91
|
|
S&P 500
|
100.00
|
|
|
93.72
|
|
S&P Hotels, Resorts & Cruise Lines
|
100.00
|
|
|
84.58
|
|
|
|
As of or For the Year Ended December 31,
|
||||||||||||||||||
($ in millions, except per share amounts and RevPAR)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
(a)
|
|
2014
(a)
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenues
|
|
$
|
1,868
|
|
|
$
|
1,280
|
|
|
$
|
1,269
|
|
|
$
|
1,301
|
|
|
$
|
1,103
|
|
Total expenses
|
|
|
1,585
|
|
|
|
1,031
|
|
|
|
974
|
|
|
|
1,051
|
|
|
|
867
|
|
Operating income
|
|
|
283
|
|
|
|
249
|
|
|
|
295
|
|
|
|
250
|
|
|
|
236
|
|
Interest expense, net
|
|
|
60
|
|
|
|
6
|
|
|
|
1
|
|
|
|
1
|
|
|
|
(1
|
)
|
Income before income taxes
|
|
|
223
|
|
|
|
243
|
|
|
|
294
|
|
|
|
249
|
|
|
|
237
|
|
Provision for income taxes
|
|
|
61
|
|
|
|
13
|
|
|
|
118
|
|
|
|
100
|
|
|
|
85
|
|
Net income
|
|
|
162
|
|
|
|
230
|
|
|
|
176
|
|
|
|
149
|
|
|
|
152
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share
|
|
$
|
1.62
|
|
|
$
|
2.31
|
|
|
$
|
1.76
|
|
|
$
|
1.49
|
|
|
$
|
1.52
|
|
Cash dividends declared per share
|
|
|
0.75
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash
|
|
$
|
366
|
|
|
$
|
57
|
|
|
$
|
28
|
|
|
$
|
38
|
|
|
$
|
25
|
|
Total assets
(b)
|
|
|
4,976
|
|
|
|
2,137
|
|
|
|
1,998
|
|
|
|
1,959
|
|
|
|
1,891
|
|
Total debt
(b)
|
|
|
2,141
|
|
|
|
184
|
|
|
|
174
|
|
|
|
95
|
|
|
|
105
|
|
Total liabilities
(b)
|
|
|
3,558
|
|
|
|
875
|
|
|
|
913
|
|
|
|
780
|
|
|
|
702
|
|
Total stockholders’ / invested equity
(c)
|
|
|
1,418
|
|
|
|
1,262
|
|
|
|
1,086
|
|
|
|
1,179
|
|
|
|
1,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Royalties and franchise fees
|
|
$
|
441
|
|
|
$
|
364
|
|
|
$
|
354
|
|
|
$
|
347
|
|
|
$
|
332
|
|
License and other fees
|
|
|
111
|
|
|
|
75
|
|
|
|
65
|
|
|
|
64
|
|
|
|
47
|
|
Adjusted EBITDA
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel Franchising segment
|
|
$
|
515
|
|
|
$
|
402
|
|
|
$
|
400
|
|
|
$
|
366
|
|
|
$
|
340
|
|
Hotel Management segment
|
|
|
47
|
|
|
|
21
|
|
|
|
26
|
|
|
|
28
|
|
|
|
13
|
|
Corporate and other
(e)
|
|
|
(55
|
)
|
|
|
(40
|
)
|
|
|
(38
|
)
|
|
|
(41
|
)
|
|
|
(39
|
)
|
Total Adjusted EBITDA
(f)
|
|
$
|
507
|
|
|
$
|
383
|
|
|
$
|
388
|
|
|
$
|
353
|
|
|
$
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of properties
(g)
|
|
|
9,157
|
|
|
|
8,422
|
|
|
|
8,035
|
|
|
|
7,812
|
|
|
|
7,645
|
|
Number of rooms
(h)
|
|
|
809,900
|
|
|
|
728,200
|
|
|
|
697,600
|
|
|
|
678,000
|
|
|
|
660,800
|
|
RevPAR
(i)
|
|
$
|
40.80
|
|
|
$
|
37.63
|
|
|
$
|
36.67
|
|
|
$
|
37.26
|
|
|
$
|
37.57
|
|
Average royalty rate
(j)
|
|
|
3.78
|
%
|
|
|
3.66
|
%
|
|
|
3.65
|
%
|
|
|
3.68
|
%
|
|
|
3.64
|
%
|
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of properties
(g)
|
|
|
6,358
|
|
|
|
5,726
|
|
|
|
5,525
|
|
|
|
5,582
|
|
|
|
5,646
|
|
Number of rooms
(h)
|
|
|
506,100
|
|
|
|
440,100
|
|
|
|
429,000
|
|
|
|
435,300
|
|
|
|
440,200
|
|
RevPAR
(i)
|
|
$
|
45.30
|
|
|
$
|
41.04
|
|
|
$
|
39.77
|
|
|
$
|
39.13
|
|
|
$
|
37.27
|
|
Average royalty rate
(j)
|
|
|
4.53
|
%
|
|
|
4.45
|
%
|
|
|
4.35
|
%
|
|
|
4.37
|
%
|
|
|
4.31
|
%
|
(a)
|
As described in Note 2 - Summary of Significant Accounting Polices to the Consolidated and Combined Financial Statements contained in Part II, Item 8 of this report, we adopted the new accounting standard related to revenue recognition utilizing the full retrospective transition method on January 1, 2018. However, amounts have not been restated for the years 2015 and 2014 for this standard.
|
(b)
|
Reflects the impact of the adoption of the new accounting standards related to the balance sheet classification of deferred taxes and the presentation of debt issuance costs during 2016.
|
(c)
|
Represents Wyndham Hotels & Resorts stand-alone stockholders’ equity since May 31, 2018 and Wyndham Worldwide net investment (capital contributions and earnings from operations less dividends) in Wyndham Hotels & Resorts and accumulated other comprehensive income for 2014 through May 31, 2018, the date of our spin-off.
|
(d)
|
“Adjusted EBITDA” is defined as net income excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related expenses (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. Generally Accepted Accounting Principles (“GAAP”) measures, 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.
|
(e)
|
Corporate and other reflects unallocated corporate costs that are not attributable to an operating segment.
|
(f)
|
The reconciliation of Net Income to Adjusted EBITDA is as follows:
|
|
Year Ended December 31,
|
||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
|
$
|
149
|
|
|
$
|
152
|
|
Provision for income taxes
|
61
|
|
|
13
|
|
|
118
|
|
|
100
|
|
|
85
|
|
|||||
Depreciation and amortization
|
99
|
|
|
75
|
|
|
73
|
|
|
67
|
|
|
60
|
|
|||||
Interest expense, net
|
60
|
|
|
6
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
|||||
Stock-based compensation
|
9
|
|
|
11
|
|
|
10
|
|
|
9
|
|
|
9
|
|
|||||
Separation-related expenses
|
77
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transaction-related expenses, net
|
36
|
|
|
3
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|||||
Foreign currency impact of highly inflationary countries
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment expense
|
—
|
|
|
41
|
|
|
—
|
|
|
7
|
|
|
8
|
|
|||||
Restructuring costs
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|||||
Contract termination costs
|
—
|
|
|
—
|
|
|
7
|
|
|
14
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
$
|
507
|
|
|
$
|
383
|
|
|
$
|
388
|
|
|
$
|
353
|
|
|
$
|
314
|
|
(g)
|
Represents the number of hotels at the end of the period.
|
(h)
|
Represents the number of rooms in hotel properties at the end of the period that are under franchise and/or management agreements, or are Company-owned.
|
(i)
|
Represents revenue per available room and is calculated by multiplying the average occupancy rate by the average daily rate.
|
(j)
|
Represents royalties divided by the gross room revenues of our franchisees.
|
•
|
In May 2018, we acquired La Quinta Holdings Inc.’s hotel franchising and hotel management business (“La Quinta”) and its portfolio of over
900
hotels;
|
•
|
In October 2017, we acquired the AmericInn hotel brand and its portfolio of approximately 200 franchised hotels in the United States;
|
•
|
In November 2016, we acquired Fen Hotels, adding the Dazzler and Esplendor Boutique brands to our portfolio, as well as a Latin America-based hotel management company; and
|
•
|
In January 2015, we acquired Dolce Hotels and Resorts, a franchisor and manager of properties focused on group accommodations in Europe and North America.
|
•
|
Hotel franchising —
licenses our 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 Wyndham Hotels.
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
506,100
|
|
|
440,100
|
|
|
15
|
%
|
||
International
|
303,800
|
|
|
288,100
|
|
|
5
|
%
|
||
Total rooms
|
809,900
|
|
|
728,200
|
|
|
11
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
45.30
|
|
|
$
|
41.04
|
|
|
10
|
%
|
International
(b)
|
33.31
|
|
|
32.27
|
|
|
3
|
%
|
||
Total RevPAR
(b)
|
40.80
|
|
|
37.63
|
|
|
8
|
%
|
(a)
|
Includes the impact of acquisitions and dispositions from their respective dates forward.
|
(b)
|
Excluding currency effects for the year ended December 31, 2018, international RevPAR increased 4% and total RevPAR increased 9%.
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Net revenues
|
$
|
1,868
|
|
|
$
|
1,280
|
|
|
46
|
%
|
Expenses
|
1,585
|
|
|
1,031
|
|
|
54
|
%
|
||
Operating income
|
283
|
|
|
249
|
|
|
14
|
%
|
||
Interest expense, net
|
60
|
|
|
6
|
|
|
NM
|
|
||
Income before income taxes
|
223
|
|
|
243
|
|
|
(8
|
%)
|
||
Provision for income taxes
|
61
|
|
|
13
|
|
|
369
|
%
|
||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
(30
|
%)
|
•
|
Marketing, reservation and loyalty expenses decreased to 26.0% of revenues from 29.1% during
2017
, primarily due to higher cost reimbursement revenues. Excluding La Quinta, marketing, reservation and loyalty expenses increased to 29.9% of revenues from 29.1% primarily due to higher marketing, reservation and loyalty expenses resulting from the increase in marketing and reservation fee revenues from franchisees;
|
•
|
Operating expenses decreased to 9.7% of revenues from 14.3% during
2017
, primarily as a result of the increase in cost reimbursement revenues and reduced expenses at our owned hotel in Puerto Rico resulting from insurance recoveries received in 2018 related to hurricanes that occurred in 2017; and
|
•
|
General and administrative expenses decreased to 6.4% of revenues from 6.9% during
2017
, primarily due to higher cost reimbursement revenues, partially offset by higher employee-related and information technology costs, principally related to operating as a stand-alone public company.
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
Provision for income taxes
|
61
|
|
|
13
|
|
||
Depreciation and amortization
|
99
|
|
|
75
|
|
||
Interest expense, net
|
60
|
|
|
6
|
|
||
Stock-based compensation
|
9
|
|
|
11
|
|
||
Separation-related expenses
|
77
|
|
|
3
|
|
||
Transaction-related expenses, net
|
36
|
|
|
3
|
|
||
Foreign currency impact of highly inflationary countries
|
3
|
|
|
—
|
|
||
Impairment expense
|
—
|
|
|
41
|
|
||
Restructuring costs
|
—
|
|
|
1
|
|
||
Adjusted EBITDA
|
$
|
507
|
|
|
$
|
383
|
|
|
Net Revenues
|
|
Adjusted EBITDA
|
||||||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Hotel Franchising
|
$
|
1,135
|
|
|
$
|
897
|
|
|
27
|
%
|
|
$
|
515
|
|
|
$
|
402
|
|
|
28
|
%
|
Hotel Management
|
726
|
|
|
383
|
|
|
90
|
%
|
|
47
|
|
|
21
|
|
|
124
|
%
|
||||
Corporate and Other
|
7
|
|
|
—
|
|
|
NM
|
|
|
(55
|
)
|
|
(40
|
)
|
|
NM
|
|
||||
Total Company
|
$
|
1,868
|
|
|
$
|
1,280
|
|
|
46
|
%
|
|
$
|
507
|
|
|
$
|
383
|
|
|
32
|
%
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
453,900
|
|
|
427,500
|
|
|
6
|
%
|
||
International
|
288,900
|
|
|
275,400
|
|
|
5
|
%
|
||
Total rooms
|
742,800
|
|
|
702,900
|
|
|
6
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
43.04
|
|
|
$
|
39.35
|
|
|
9
|
%
|
International
(b)
|
32.09
|
|
|
31.14
|
|
|
3
|
%
|
||
Total RevPAR
(b)
|
38.86
|
|
|
36.18
|
|
|
7
|
%
|
(a)
|
Includes the impact of acquisitions and dispositions from the acquisition and disposition dates forward.
|
(b)
|
Excluding currency effects, international RevPAR increased 4% and total RevPAR increased 8%.
|
•
|
Marketing, reservation and loyalty expenses increased to 41.2% of revenues from 40.6% during the prior year primarily due to the La Quinta acquisition;
|
•
|
Operating expenses decreased to 9.6% of revenue compared to 10.4% during the prior year primarily due to the La Quinta acquisition; and
|
•
|
General and administrative expenses decreased to 3.8% of revenues from 4.2% during the prior year, primarily due to lower employee-related expenses coupled with higher net revenues.
|
|
Year Ended December 31,
|
|||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
52,200
|
|
|
12,600
|
|
|
314
|
%
|
||
International
|
14,900
|
|
|
12,700
|
|
|
17
|
%
|
||
Total rooms
|
67,100
|
|
|
25,300
|
|
|
165
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
72.76
|
|
|
$
|
97.08
|
|
|
(25
|
%)
|
International
(b)
|
57.84
|
|
|
58.18
|
|
|
(1
|
%)
|
||
Total RevPAR
(b)
|
68.72
|
|
|
78.59
|
|
|
(13
|
%)
|
(a)
|
Includes the impact of acquisitions and disposition from their respective dates forward.
|
(b)
|
Excluding currency effects, International RevPAR increased 5% and total RevPAR decreased 11%.
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
440,100
|
|
|
429,000
|
|
|
3
|
%
|
||
International
|
288,100
|
|
|
268,600
|
|
|
7
|
%
|
||
Total rooms
|
728,200
|
|
|
697,600
|
|
|
4
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
41.04
|
|
|
$
|
39.77
|
|
|
3
|
%
|
International
(b)
|
32.27
|
|
|
31.32
|
|
|
3
|
%
|
||
Total RevPAR
(b)
|
37.63
|
|
|
36.67
|
|
|
3
|
%
|
(a)
|
Includes the impact of acquisitions from their respective dates forward.
|
(b)
|
Excluding currency effects for the year ended Decem
ber 31, 2017, international and total RevPAR increased 3%.
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
Net revenues
|
$
|
1,280
|
|
|
$
|
1,269
|
|
|
1
|
%
|
Expenses
|
1,031
|
|
|
974
|
|
|
6
|
%
|
||
Operating income
|
249
|
|
|
295
|
|
|
(16
|
%)
|
||
Interest expense, net
|
6
|
|
|
1
|
|
|
NM
|
|
||
Income before income taxes
|
243
|
|
|
294
|
|
|
(17
|
%)
|
||
Provision for income taxes
|
13
|
|
|
118
|
|
|
(89
|
%)
|
||
Net income
|
$
|
230
|
|
|
$
|
176
|
|
|
31
|
%
|
•
|
Marketing, reservation and loyalty expenses decreased to 29.1% of revenues from 29.6% during
2016
, due to an overall increase in net revenues;
|
•
|
Operating expenses increased to 14.3% of revenues from 13.2% during
2016
, primarily as a result of higher employee-related costs and higher expenses at our owned hotel in Puerto Rico due to the impact of the hurricanes during 2017; and
|
•
|
General and administrative expenses increased to 6.9% of revenues from 6.5% during
2016
, primarily due to higher employee-related and legal costs.
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
230
|
|
|
$
|
176
|
|
Provision for income taxes
|
13
|
|
|
118
|
|
||
Depreciation and amortization
|
75
|
|
|
73
|
|
||
Interest expense, net
|
6
|
|
|
1
|
|
||
Stock-based compensation
|
11
|
|
|
10
|
|
||
Separation-related expenses
|
3
|
|
|
—
|
|
||
Transaction-related expenses, net
|
3
|
|
|
1
|
|
||
Impairments
|
41
|
|
|
—
|
|
||
Restructuring costs
|
1
|
|
|
2
|
|
||
Contract termination costs
|
—
|
|
|
7
|
|
||
Adjusted EBITDA
|
$
|
383
|
|
|
$
|
388
|
|
|
Net Revenues
|
|
Adjusted EBITDA
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
Hotel Franchising
|
$
|
897
|
|
|
$
|
881
|
|
|
2
|
%
|
|
$
|
402
|
|
|
$
|
400
|
|
|
1
|
%
|
Hotel Management
|
383
|
|
|
388
|
|
|
(1
|
%)
|
|
21
|
|
|
26
|
|
|
(19
|
%)
|
||||
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(38
|
)
|
|
5
|
%
|
||||
Total Company
|
$
|
1,280
|
|
|
$
|
1,269
|
|
|
1
|
%
|
|
$
|
383
|
|
|
$
|
388
|
|
|
(1
|
%)
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
427,500
|
|
|
415,900
|
|
|
3
|
%
|
||
International
|
275,400
|
|
|
258,200
|
|
|
7
|
%
|
||
Total rooms
|
702,900
|
|
|
674,100
|
|
|
4
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
39.35
|
|
|
$
|
38.05
|
|
|
3
|
%
|
International
(b)
|
31.14
|
|
|
30.30
|
|
|
3
|
%
|
||
Total RevPAR
(b)
|
36.18
|
|
|
35.21
|
|
|
3
|
%
|
(a)
|
Includes the impact of acquisitions from their respective dates forward.
|
(b)
|
Excluding currency effects, international and total RevPAR increased 3%.
|
•
|
Marketing, reservation and loyalty expenses decreased to 40.6% of revenues from 41.9% during 2016 due primarily to an increase in total net revenues;
|
•
|
Operating expenses increased to 10.4% of revenue from 8.8% during 2016 due to higher employee-related costs; and
|
•
|
General and administrative expenses increased to 4.2% of revenues from 3.9% during 2016 primarily due to higher legal costs.
|
|
Year Ended December 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
Rooms
(a)
|
|
|
|
|
|
|||||
United States
|
12,600
|
|
|
13,100
|
|
|
(4
|
%)
|
||
International
|
12,700
|
|
|
10,400
|
|
|
22
|
%
|
||
Total rooms
|
25,300
|
|
|
23,500
|
|
|
8
|
%
|
||
RevPAR
(a)
|
|
|
|
|
|
|||||
United States
|
$
|
97.08
|
|
|
$
|
95.73
|
|
|
1
|
%
|
International
(b)
|
58.18
|
|
62.88
|
|
(7
|
%)
|
||||
Total RevPAR
(b)
|
78.59
|
|
83.31
|
|
(6
|
%)
|
(a)
|
Includes the impact of acquisitions from their respective dates forward.
|
(b)
|
Excluding currency effects, international RevPAR decreased 6% and total RevPAR decreased 5%.
|
•
|
Cost reimbursements decreased to 68.9% of revenues from 69.8% during 2016;
|
•
|
Operating expenses increased to 22.7% of revenues from 20.6% in 2016, primarily as a result of higher operating expenses at our owned hotel in Puerto Rico due to the impact of the hurricanes during 2017 and higher expenses associated with hotel management guarantees;
|
•
|
Marketing, reservation and loyalty expenses increased to 2.3% of revenues from 1.9% during 2016; and
|
•
|
General and administrative expenses decreased to 0.7% of revenues from 0.9% during 2016.
|
|
December 31,
2018 |
|
December 31,
2017 |
|
Change
|
||||||
Total assets
|
$
|
4,976
|
|
|
$
|
2,137
|
|
|
$
|
2,839
|
|
Total liabilities
|
3,558
|
|
|
875
|
|
|
2,683
|
|
|||
Total stockholders’ equity
|
1,418
|
|
|
1,262
|
|
|
156
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash provided by/(used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
231
|
|
|
$
|
278
|
|
|
$
|
264
|
|
Investing activities
|
(1,728
|
)
|
|
(197
|
)
|
|
(114
|
)
|
|||
Financing activities
|
1,808
|
|
|
(51
|
)
|
|
(161
|
)
|
|||
Effects of changes in exchange rates on cash, cash equivalents and restricted cash
|
(4
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Net change in cash, cash equivalents and restricted cash
|
$
|
307
|
|
|
$
|
29
|
|
|
$
|
(10
|
)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
22
|
|
|
$
|
2,035
|
|
|
$
|
2,141
|
|
Interest on debt
(a)
|
101
|
|
|
99
|
|
|
96
|
|
|
95
|
|
|
94
|
|
|
170
|
|
|
655
|
|
|||||||
Operating leases
|
6
|
|
|
4
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||||
Purchase commitments
(b)
|
60
|
|
|
23
|
|
|
12
|
|
|
11
|
|
|
8
|
|
|
16
|
|
|
130
|
|
|||||||
La Quinta tax liability
(c)
|
205
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|||||||
Total
(d) (e)
|
$
|
393
|
|
|
$
|
147
|
|
|
$
|
132
|
|
|
$
|
129
|
|
|
$
|
124
|
|
|
$
|
2,221
|
|
|
$
|
3,146
|
|
(a)
|
Includes interest on long-term debt; estimated using the stated interest rates on our senior notes and the swapped interest rates on our term loan.
|
(b)
|
Includes $89 million for information technology activities and $17 million for marketing-related activities.
|
(c)
|
Relates to liability which is expected to be paid in early 2019 to tax authorities and/or CorePoint related to the La Quinta acquisition.
|
(d)
|
Excludes a $16 million liability for unrecognized tax benefits associated with the accounting guidance for uncertainty in income taxes since it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities.
|
(e)
|
Excludes guarantees for which the periods in which such commitments would be settled are not reasonably estimable (See Note 13 - Commitments and Contingencies to the Consolidated and Combined Financial Statements for further details).
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
|
Equity compensation plans approved by security holders
|
1.6 million
(a)
|
$61.35
(b)
|
7.5 million
(c)
|
Equity compensation plans not approved by security holders
|
None
|
Not applicable
|
Not applicable
|
(a)
|
Consists of shares issuable upon exercise of stock settled stock appreciation rights, stock options, restricted stock units and deferred stock units under the 2018 Equity and Incentive Plan.
|
(b)
|
Consists of weighted-average exercise price of outstanding stock settled stock appreciation rights, stock options and restricted stock units
|
(c)
|
Consists of shares available for future grants under the 2018 Equity and Incentive Plan.
|
WYNDHAM HOTELS & RESORTS, INC.
|
|
|
|
By:
|
/s/ GEOFFREY A. BALLOTTI
|
|
Geoffrey A. Ballotti
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date:
|
February 14, 2019
|
Signature
|
Title
|
Date
|
|
|
|
/s/ GEOFFREY A. BALLOTTI
|
President, Chief Executive Officer and Director
|
February 14, 2019
|
Geoffrey A. Ballotti
|
(Principal Executive Officer)
|
|
|
|
|
/s/ DAVID B. WYSHNER
|
Chief Financial Officer
|
February 14, 2019
|
David B. Wyshner
|
(Principal Financial Officer)
|
|
|
|
|
/s/ NICOLA ROSSI
|
Chief Accounting Officer
|
February 14, 2019
|
Nicola Rossi
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ STEPHEN P. HOLMES
|
Non-Executive Chairman of the Board of Directors
|
February 14, 2019
|
Stephen P. Holmes
|
|
|
|
|
|
/s/ MYRA J. BIBLOWIT
|
Director
|
February 14, 2019
|
Myra J. Biblowit
|
|
|
|
|
|
/s/ JAMES E. BUCKMAN
|
Director
|
February 14, 2019
|
James E. Buckman
|
|
|
|
|
|
/s/ BRUCE B. CHURCHILL
|
Director
|
February 14, 2019
|
Bruce B. Churchill
|
|
|
|
|
|
/s/ MUKUL DEORAS
|
Director
|
February 14, 2019
|
Mukul Deoras
|
|
|
|
|
|
/s/ THE RIGHT HONOURABLE BRIAN MULRONEY
|
Director
|
February 14, 2019
|
The Right Honourable Brian Mulroney
|
|
|
|
|
|
/s/ PAULINE D.E. RICHARDS
|
Director
|
February 14, 2019
|
Pauline D.E. Richards
|
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated and Combined Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated and Combined Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated and Combined Balance Sheets as of December 31, 2018 and 2017
|
|
Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated and Combined Statements of Equity for the years ended December 31, 2018, 2017 and 2016
|
|
Notes to Consolidated and Combined Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenues
|
|
|
|
|
|
||||||
Royalties and franchise fees
|
$
|
441
|
|
|
$
|
364
|
|
|
$
|
354
|
|
Marketing, reservation and loyalty
|
491
|
|
|
371
|
|
|
375
|
|
|||
Hotel management
|
124
|
|
|
108
|
|
|
107
|
|
|||
License and other revenues from former Parent
|
111
|
|
|
75
|
|
|
65
|
|
|||
Cost reimbursements
|
586
|
|
|
264
|
|
|
271
|
|
|||
Other
|
115
|
|
|
98
|
|
|
97
|
|
|||
Net revenues
|
1,868
|
|
|
1,280
|
|
|
1,269
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Marketing, reservation and loyalty
|
486
|
|
|
373
|
|
|
376
|
|
|||
Operating
|
182
|
|
|
183
|
|
|
168
|
|
|||
General and administrative
|
119
|
|
|
88
|
|
|
83
|
|
|||
Cost reimbursements
|
586
|
|
|
264
|
|
|
271
|
|
|||
Depreciation and amortization
|
99
|
|
|
75
|
|
|
73
|
|
|||
Separation-related
|
77
|
|
|
3
|
|
|
—
|
|
|||
Transaction-related, net
|
36
|
|
|
3
|
|
|
1
|
|
|||
Impairment
|
—
|
|
|
41
|
|
|
—
|
|
|||
Restructuring
|
—
|
|
|
1
|
|
|
2
|
|
|||
Total expenses
|
1,585
|
|
|
1,031
|
|
|
974
|
|
|||
Operating income
|
283
|
|
|
249
|
|
|
295
|
|
|||
Interest expense, net
|
60
|
|
|
6
|
|
|
1
|
|
|||
Income before income taxes
|
223
|
|
|
243
|
|
|
294
|
|
|||
Provision for income taxes
|
61
|
|
|
13
|
|
|
118
|
|
|||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
1.62
|
|
|
$
|
2.31
|
|
|
$
|
1.76
|
|
Diluted
|
1.62
|
|
|
2.31
|
|
|
1.76
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
Other comprehensive income/(loss), net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(9
|
)
|
|
5
|
|
|
(1
|
)
|
|||
Unrealized losses on cash flow hedges
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income/(loss), net of tax
|
(13
|
)
|
|
5
|
|
|
(1
|
)
|
|||
Comprehensive income
|
$
|
149
|
|
|
$
|
235
|
|
|
$
|
175
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
366
|
|
|
$
|
57
|
|
Trade receivables, net
|
293
|
|
|
194
|
|
||
Prepaid expenses
|
40
|
|
|
29
|
|
||
Other current assets
|
152
|
|
|
54
|
|
||
Total current assets
|
851
|
|
|
334
|
|
||
Property and equipment, net
|
326
|
|
|
250
|
|
||
Goodwill
|
1,547
|
|
|
423
|
|
||
Trademarks, net
|
1,397
|
|
|
692
|
|
||
Franchise agreements and other intangibles, net
|
590
|
|
|
251
|
|
||
Other non-current assets
|
265
|
|
|
187
|
|
||
Total assets
|
$
|
4,976
|
|
|
$
|
2,137
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
21
|
|
|
$
|
—
|
|
Current portion of debt due to former Parent
|
—
|
|
|
103
|
|
||
Accounts payable
|
61
|
|
|
38
|
|
||
Deferred income
|
109
|
|
|
84
|
|
||
Accrued expenses and other current liabilities
|
502
|
|
|
186
|
|
||
Total current liabilities
|
693
|
|
|
411
|
|
||
Long-term debt
|
2,120
|
|
|
—
|
|
||
Debt due to former Parent
|
—
|
|
|
81
|
|
||
Deferred income taxes
|
399
|
|
|
173
|
|
||
Deferred income
|
164
|
|
|
164
|
|
||
Other non-current liabilities
|
182
|
|
|
46
|
|
||
Total liabilities
|
3,558
|
|
|
875
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 par value, authorized 6,000,000 shares, none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, authorized 600,000,000 shares, 100,360,236 issued as of 2018 and none issued and outstanding as of 2017
|
1
|
|
|
—
|
|
||
Treasury stock, at cost – 2,269,169 shares in 2018
|
(119
|
)
|
|
—
|
|
||
Additional paid-in capital
|
1,475
|
|
|
—
|
|
||
Retained earnings
|
69
|
|
|
—
|
|
||
Former Parent’s net investment
|
—
|
|
|
1,257
|
|
||
Accumulated other comprehensive income
|
(8
|
)
|
|
5
|
|
||
Total stockholders’ equity
|
1,418
|
|
|
1,262
|
|
||
Total liabilities and equity
|
$
|
4,976
|
|
|
$
|
2,137
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
99
|
|
|
75
|
|
|
73
|
|
|||
Gain on sale
|
(23
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
—
|
|
|
41
|
|
|
—
|
|
|||
Deferred income taxes
|
—
|
|
|
(91
|
)
|
|
26
|
|
|||
Stock-based compensation
|
25
|
|
|
—
|
|
|
—
|
|
|||
Net change in assets and liabilities:
|
|
|
|
|
|
||||||
Trade receivables
|
(55
|
)
|
|
(10
|
)
|
|
—
|
|
|||
Prepaid expenses
|
1
|
|
|
(5
|
)
|
|
1
|
|
|||
Other current assets
|
(22
|
)
|
|
—
|
|
|
8
|
|
|||
Accounts payable, accrued expenses and other current liabilities
|
85
|
|
|
24
|
|
|
(13
|
)
|
|||
Payment of tax liability assumed in La Quinta acquisition
|
(35
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income
|
(3
|
)
|
|
15
|
|
|
(3
|
)
|
|||
Payments of development advance notes
|
(27
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|||
Proceeds from development advance notes
|
14
|
|
|
7
|
|
|
3
|
|
|||
Long‑term assets
|
1
|
|
|
(6
|
)
|
|
(6
|
)
|
|||
Other, net
|
9
|
|
|
6
|
|
|
8
|
|
|||
Net cash provided by operating activities
|
231
|
|
|
278
|
|
|
264
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Property and equipment additions
|
(73
|
)
|
|
(46
|
)
|
|
(42
|
)
|
|||
Acquisition of business, net of cash acquired
|
(1,703
|
)
|
|
(140
|
)
|
|
(70
|
)
|
|||
Proceeds from sale of assets, net
|
27
|
|
|
—
|
|
|
—
|
|
|||
Loan advances
|
(7
|
)
|
|
(21
|
)
|
|
(2
|
)
|
|||
Loan repayments
|
20
|
|
|
—
|
|
|
—
|
|
|||
Insurance proceeds
|
14
|
|
|
11
|
|
|
—
|
|
|||
Other, net
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(1,728
|
)
|
|
(197
|
)
|
|
(114
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Net transfer to former Parent
|
(38
|
)
|
|
(59
|
)
|
|
(239
|
)
|
|||
Proceeds from borrowings from former Parent
|
13
|
|
|
9
|
|
|
79
|
|
|||
Capital lease payments
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Proceeds from long-term debt
|
2,100
|
|
|
—
|
|
|
—
|
|
|||
Principal payments on long-term debt
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(28
|
)
|
|
—
|
|
|
—
|
|
|||
Capital contribution from former Parent
|
106
|
|
|
—
|
|
|
—
|
|
|||
Dividend to former Parent
|
(109
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends to shareholders
|
(77
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of common stock
|
(117
|
)
|
|
—
|
|
|
—
|
|
|||
Net share settlement of incentive equity awards
|
(34
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(1
|
)
|
|
—
|
|
|
1
|
|
|||
Net cash provided by/(used in) financing activities
|
1,808
|
|
|
(51
|
)
|
|
(161
|
)
|
|||
Effect of changes in exchange rates on cash, cash equivalents and restricted cash
|
(4
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
307
|
|
|
29
|
|
|
(10
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
59
|
|
|
30
|
|
|
40
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
366
|
|
|
$
|
59
|
|
|
$
|
30
|
|
|
Common Shares Outstanding
|
|
Common Stock
|
|
Treasury
Stock
|
|
Former Parent’s Net Investment
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income/(Loss)
|
|
Total Equity
|
|||||||||||||||
Balance as of December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1,150
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|||||||
Net transfers to parent
|
—
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||||||||
Balance as of December 31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
1,086
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,086
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|||||||
Net transfers to parent
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||||
Balance as of December 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
1,257
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
1,262
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
162
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||
Net transfer to and net contribution from former Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|||||||
Cumulative effect of change in accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(75
|
)
|
|||||||
Transfer of net investment to additional paid-in capital
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,482
|
)
|
|
1,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock
|
100
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Net share settlement of incentive equity awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|||||||
Repurchase of common stock
|
(2
|
)
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|||||||
Change in deferred compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Balance as of December 31, 2018
|
98
|
|
|
$
|
1
|
|
|
$
|
(119
|
)
|
|
$
|
—
|
|
|
$
|
1,475
|
|
|
$
|
69
|
|
|
$
|
(8
|
)
|
|
$
|
1,418
|
|
1.
|
Basis of Presentation
|
•
|
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.
|
2.
|
Summary of Significant Accounting Policies
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning Balance
|
$
|
61
|
|
|
$
|
77
|
|
|
$
|
98
|
|
Bad debt expense
|
8
|
|
|
7
|
|
|
3
|
|
|||
Write-offs
|
(17
|
)
|
|
(23
|
)
|
|
(24
|
)
|
|||
Ending Balance
|
$
|
52
|
|
|
$
|
61
|
|
|
$
|
77
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
Net revenues
|
Previously Reported Balance
|
|
New Revenue Standard
Adjustments |
|
Adjusted Balance
|
|
Previously Reported Balance
|
|
New Revenue Standard
Adjustments |
|
Adjusted Balance
|
||||||||||||
Royalties and franchise fees
|
$
|
375
|
|
|
$
|
(11
|
)
|
|
$
|
364
|
|
|
$
|
353
|
|
|
$
|
1
|
|
|
$
|
354
|
|
Marketing, reservation and loyalty
|
407
|
|
|
(36
|
)
|
|
371
|
|
|
405
|
|
|
(30
|
)
|
|
375
|
|
||||||
Other
|
118
|
|
|
(20
|
)
|
|
98
|
|
|
111
|
|
|
(14
|
)
|
|
97
|
|
||||||
Net revenues
|
1,347
|
|
|
(67
|
)
|
|
1,280
|
|
|
1,312
|
|
|
(43
|
)
|
|
1,269
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketing, reservation and loyalty
|
406
|
|
|
(33
|
)
|
|
373
|
|
|
407
|
|
|
(31
|
)
|
|
376
|
|
||||||
Operating
|
205
|
|
|
(22
|
)
|
|
183
|
|
|
187
|
|
|
(19
|
)
|
|
168
|
|
||||||
Total expenses
|
1,086
|
|
|
(55
|
)
|
|
1,031
|
|
|
1,024
|
|
|
(50
|
)
|
|
974
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income/(loss) before income taxes
|
255
|
|
|
(12
|
)
|
(a)
|
243
|
|
|
287
|
|
|
7
|
|
|
294
|
|
||||||
Provision for income taxes
|
12
|
|
|
1
|
|
(a)
|
13
|
|
|
115
|
|
|
3
|
|
|
118
|
|
||||||
Net income/(loss)
|
243
|
|
|
(13
|
)
|
|
230
|
|
|
172
|
|
|
4
|
|
|
176
|
|
(a)
|
The income tax provision for 2017 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) a
$3 million
tax benefit related to the
$12 million
loss before income taxes.
|
|
At December 31, 2017
|
||||||||||
Assets
|
Previously Reported Balance
|
|
New Revenue Standard
Adjustments |
|
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 (current)
|
79
|
|
|
5
|
|
|
84
|
|
|||
Total current liabilities
|
406
|
|
|
5
|
|
|
411
|
|
|||
Deferred income taxes
|
181
|
|
|
(8
|
)
|
|
173
|
|
|||
Deferred income (non-current)
|
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
|
|
3.
|
Revenue Recognition
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Deferred initial franchise fee revenue
|
|
$
|
127
|
|
|
$
|
116
|
|
Deferred loyalty program revenue
|
|
74
|
|
|
54
|
|
||
Deferred co-branded credit card programs revenue
|
|
30
|
|
|
37
|
|
||
Deferred hotel management fee revenue
|
|
21
|
|
|
19
|
|
||
Deferred other revenue
|
|
21
|
|
|
22
|
|
||
Total
|
|
$
|
273
|
|
|
$
|
248
|
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||
Initial franchise fee revenue
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
92
|
|
|
$
|
127
|
|
Loyalty program revenue
|
46
|
|
|
19
|
|
|
7
|
|
|
2
|
|
|
74
|
|
|||||
Co-branded credit card programs revenue
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Hotel management fee revenue
|
—
|
|
|
—
|
|
|
1
|
|
|
20
|
|
|
21
|
|
|||||
Other revenue
|
15
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
21
|
|
|||||
Total
|
$
|
109
|
|
|
$
|
29
|
|
|
$
|
17
|
|
|
$
|
118
|
|
|
$
|
273
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Hotel Franchising
|
|
|
|
|
|
||||||
Royalties and franchise fees
|
$
|
432
|
|
|
$
|
355
|
|
|
$
|
347
|
|
Marketing, reservation and loyalty
|
489
|
|
|
369
|
|
|
373
|
|
|||
License and other revenues from former Parent
|
111
|
|
|
75
|
|
|
65
|
|
|||
Other
|
103
|
|
|
98
|
|
|
96
|
|
|||
Total Hotel Franchising
|
1,135
|
|
|
897
|
|
|
881
|
|
|||
|
|
|
|
|
|
||||||
Hotel Management
|
|
|
|
|
|
||||||
Royalties and franchise fees
|
9
|
|
|
9
|
|
|
7
|
|
|||
Marketing, reservation and loyalty
|
2
|
|
|
2
|
|
|
2
|
|
|||
Hotel management - owned properties
|
75
|
|
|
78
|
|
|
81
|
|
|||
Hotel management - managed properties
|
49
|
|
|
30
|
|
|
26
|
|
|||
Cost reimbursements
|
586
|
|
|
264
|
|
|
271
|
|
|||
Other
|
5
|
|
|
—
|
|
|
1
|
|
|||
Total Hotel Management
|
726
|
|
|
383
|
|
|
388
|
|
|||
|
|
|
|
|
|
||||||
Corporate and Other
|
7
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net Revenues
|
$
|
1,868
|
|
|
$
|
1,280
|
|
|
$
|
1,269
|
|
4.
|
Earnings Per Share
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
99.5
|
|
|
99.8
|
|
|
99.8
|
|
|||
Stock options and restricted stock units (“RSUs”)
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average shares outstanding
|
99.8
|
|
|
99.8
|
|
|
99.8
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.62
|
|
|
$
|
2.31
|
|
|
$
|
1.76
|
|
Diluted
|
1.62
|
|
|
2.31
|
|
|
1.76
|
|
|||
|
|
|
|
|
|
||||||
Dividends:
|
|
|
|
|
|
||||||
Cash dividends declared per share
|
$
|
0.75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Aggregate dividends paid to shareholders
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Shares
|
|
Cost
|
|
Average Price Per Share
|
|||||
As of May 31, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
For the seven months ended December 31, 2018
|
2.3
|
|
|
119
|
|
|
52.51
|
|
||
As of December 31, 2018
|
2.3
|
|
|
$
|
119
|
|
|
$
|
52.51
|
|
5.
|
Acquisitions
|
|
|
|
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 equity award liabilities
|
|
|
(8
|
)
|
|||
Net cash consideration
|
|
|
1,703
|
|
|||
|
|
|
|
||||
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.)
|
|
|
$
|
988
|
|
||
|
|
|
|
||||
Total current assets
(e)
|
|
|
$
|
69
|
|
||
Property and equipment
|
|
|
17
|
|
|||
Trademarks
(f)
|
|
|
710
|
|
|||
Franchise agreements
(f)
|
|
|
260
|
|
|||
Management contracts
(f)
|
|
|
119
|
|
|||
Other assets
|
|
|
5
|
|
|||
Total assets acquired
|
|
|
$
|
1,180
|
|
||
|
|
|
|
||||
Total current liabilities
(e)
|
|
|
$
|
105
|
|
||
Deferred income taxes
(g)
|
|
|
248
|
|
|||
Long‑term debt repaid at acquisition
(c)
|
|
|
715
|
|
|||
Assumed tax liability
(b)
|
|
|
240
|
|
|||
Other liabilities
|
|
|
11
|
|
|||
Total liabilities assumed
|
|
|
1,319
|
|
|||
Net identifiable liabilities acquired
|
|
|
(139
|
)
|
|||
Goodwill
(h)
|
|
|
1,127
|
|
|||
Total consideration transferred
|
|
|
$
|
988
|
|
(b)
|
Reflects a portion of the purchase price which is expected to be paid by 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 December 31, 2018 was
$205 million
, which is reported within Accrued expenses and other current liabilities on the 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.
|
(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.
|
(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.
|
|
Amount
|
||
Trade receivables
|
$
|
3
|
|
Goodwill
(a)
|
44
|
|
|
Franchise agreements
(b)
|
46
|
|
|
Trademarks
|
51
|
|
|
Total assets acquired
|
144
|
|
|
Other current liabilities
|
4
|
|
|
Total liabilities acquired
|
4
|
|
|
Net assets acquired
|
$
|
140
|
|
|
Amount
|
||
Trade receivables
|
$
|
1
|
|
Goodwill
(a)
|
49
|
|
|
Management contracts
|
15
|
|
|
Trademarks
(b)
|
10
|
|
|
Total assets acquired
|
75
|
|
|
Other current liabilities
|
1
|
|
|
Other non-current liabilities
|
4
|
|
|
Total liabilities acquired
|
5
|
|
|
Net assets acquired
|
$
|
70
|
|
6.
|
Intangible Assets
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Unamortized Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
1,547
|
|
|
|
|
|
|
$
|
423
|
|
|
|
|
|
||||||||
Trademarks
(a)
|
$
|
1,393
|
|
|
|
|
|
|
$
|
683
|
|
|
|
|
|
||||||||
Amortized Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise agreements
(b)
|
$
|
895
|
|
|
$
|
434
|
|
|
$
|
461
|
|
|
$
|
640
|
|
|
$
|
417
|
|
|
$
|
223
|
|
Management agreements
(c)
|
140
|
|
|
13
|
|
|
127
|
|
|
33
|
|
|
8
|
|
|
25
|
|
||||||
Trademarks
(d)
|
5
|
|
|
1
|
|
|
4
|
|
|
10
|
|
|
1
|
|
|
9
|
|
||||||
Other
(e)
|
6
|
|
|
4
|
|
|
2
|
|
|
6
|
|
|
3
|
|
|
3
|
|
||||||
|
$
|
1,046
|
|
|
$
|
452
|
|
|
$
|
594
|
|
|
$
|
689
|
|
|
$
|
429
|
|
|
$
|
260
|
|
(a)
|
Comprised of various trademarks that the Company has acquired. These trademarks are expected to generate future cash flows for an indefinite period of time.
|
(b)
|
Amortized over a period ranging from
20
to
40 years
with a weighted average life of
31 years
.
|
(c)
|
Amortized over a period ranging from
7
to
22 years
with a weighted average life of
15 years
.
|
(d)
|
Amortized over a period of
20 years
with a weighted average life of
20 years
.
|
(e)
|
Amortized over a period ranging from
3
to
5 years
with a weighted average life of
4 years
.
|
|
Balance as of January 1, 2017
|
|
Goodwill Acquired During 2017
|
|
Balance as of December 31, 2017
|
|
Goodwill Acquired During 2018
|
|
Adjustments to Goodwill
(a)
|
|
Balance as of December 31, 2018
|
||||||||||||
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||
Hotel Franchising
|
$
|
340
|
|
|
$
|
45
|
|
|
$
|
385
|
|
|
$
|
1,067
|
|
|
$
|
(3
|
)
|
|
$
|
1,449
|
|
Hotel Management
|
37
|
|
|
1
|
|
|
38
|
|
|
60
|
|
|
—
|
|
|
98
|
|
||||||
Total
|
$
|
377
|
|
|
$
|
46
|
|
|
$
|
423
|
|
|
$
|
1,127
|
|
|
$
|
(3
|
)
|
|
$
|
1,547
|
|
(a)
|
Includes
$2 million
related to the sale of Knights Inn brand in May 2018.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Franchise agreements
|
$
|
22
|
|
|
$
|
16
|
|
|
$
|
15
|
|
Management agreements
|
7
|
|
|
3
|
|
|
2
|
|
|||
Trademarks
|
1
|
|
|
1
|
|
|
—
|
|
|||
Other
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
(a)
|
$
|
31
|
|
|
$
|
20
|
|
|
$
|
18
|
|
(a)
|
Included as a component of depreciation and amortization on the Consolidated and Combined Statements of Income.
|
|
Amount
|
||
2019
|
$
|
37
|
|
2020
|
37
|
|
|
2021
|
37
|
|
|
2022
|
35
|
|
|
2023
|
34
|
|
7.
|
Franchising, Marketing and Reservation Activities
|
8.
|
Income Taxes
|
|
|
Year Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Remeasurement of net deferred income tax and uncertain tax liabilities
|
|
$
|
(2
|
)
|
|
$
|
(87
|
)
|
One-time deemed repatriation tax on undistributed historical earnings of foreign subsidiaries
|
|
(2
|
)
|
|
2
|
|
||
Total provision for (benefit from) income taxes impact
|
|
$
|
(4
|
)
|
|
$
|
(85
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
|||||||
|
Federal
|
$
|
34
|
|
|
$
|
84
|
|
|
$
|
67
|
|
|
State
|
13
|
|
|
13
|
|
|
16
|
|
|||
|
Foreign
|
14
|
|
|
7
|
|
|
9
|
|
|||
|
|
61
|
|
|
104
|
|
|
92
|
|
|||
Deferred
|
|
|
|
|
|
|||||||
|
Federal
|
2
|
|
|
(89
|
)
|
|
22
|
|
|||
|
State
|
(2
|
)
|
|
(1
|
)
|
|
4
|
|
|||
|
Foreign
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
|
|
—
|
|
|
(91
|
)
|
|
26
|
|
|||
Provision for income taxes
|
$
|
61
|
|
|
$
|
13
|
|
|
$
|
118
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Deferred income tax assets:
|
|
|
|
|||||
|
Accrued liabilities and deferred income
|
$
|
87
|
|
|
$
|
53
|
|
|
Tax credits
(a)
|
12
|
|
|
—
|
|
||
|
Provision for doubtful accounts
|
20
|
|
|
22
|
|
||
|
Net operating loss carryforward
(b)
|
14
|
|
|
10
|
|
||
|
Other
|
14
|
|
|
2
|
|
||
|
Valuation allowance
(c)
|
(15
|
)
|
|
(9
|
)
|
||
Deferred income tax assets
|
132
|
|
|
78
|
|
|||
|
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
|||||
|
Depreciation and amortization
|
517
|
|
|
241
|
|
||
|
Other
|
12
|
|
|
8
|
|
||
Deferred income tax liabilities
|
529
|
|
|
249
|
|
|||
|
Net deferred income tax liabilities
|
$
|
397
|
|
|
$
|
171
|
|
|
|
|
|
|
||||
Reported in:
|
|
|
|
|||||
Other non-current assets
|
$
|
2
|
|
|
$
|
2
|
|
|
Deferred income taxes
|
399
|
|
|
173
|
|
|||
|
Net deferred income tax liabilities
|
$
|
397
|
|
|
$
|
171
|
|
(a)
|
As of December 31, 2018, the Company had
$6 million
of foreign tax credits. The foreign tax credits primarily expire in 2028.
|
(b)
|
As of December 31, 2018, the Company’s net operating loss carryforwards primarily relate to state net operating losses, which are due to expire at various dates, but no later than 2038.
|
(c)
|
The valuation allowance of
$15 million
at December 31, 2018 relates to net operating loss carryforwards, certain deferred tax assets and foreign tax credits of
$11 million
,
$3 million
and
$1 million
, respectively. The valuation allowance of
$9 million
at December 31, 2017 relates to net operating loss carryforwards of
$8 million
and certain deferred tax assets of
$1 million
. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized.
|
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal tax benefits
|
2.9
|
|
|
3.6
|
|
|
4.5
|
|
Taxes on foreign operations at rates different than U.S. federal statutory rates
|
1.9
|
|
|
0.8
|
|
|
(0.2
|
)
|
Taxes on foreign income, net of tax credits
|
0.3
|
|
|
0.4
|
|
|
0.1
|
|
Valuation allowances
|
1.4
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
Impact of U.S. tax reform
|
(1.8
|
)
|
|
(34.9
|
)
|
|
—
|
|
Other
|
1.7
|
|
|
0.5
|
|
|
0.9
|
|
|
27.4
|
%
|
|
5.3
|
%
|
|
40.1
|
%
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning Balance
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
11
|
|
Increases related to tax positions taken during a prior period
|
2
|
|
|
—
|
|
|
1
|
|
|||
Increases related to tax positions taken during the current period
|
1
|
|
|
2
|
|
|
3
|
|
|||
Decreases related to settlements with taxing authorities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Decreases as a result of a lapse of the applicable statute of limitations
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Decreases related to tax positions taken during a prior period
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Ending Balance
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
13
|
|
9.
|
Fair Value
|
10.
|
Property and Equipment, net
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Land
|
$
|
17
|
|
|
$
|
14
|
|
Buildings and leasehold improvements
|
212
|
|
|
171
|
|
||
Capitalized software
|
292
|
|
|
242
|
|
||
Furniture, fixtures and equipment
|
86
|
|
|
69
|
|
||
Capital leases
|
72
|
|
|
5
|
|
||
Construction in progress
|
22
|
|
|
12
|
|
||
|
701
|
|
|
513
|
|
||
Less: Accumulated depreciation
|
375
|
|
|
263
|
|
||
|
$
|
326
|
|
|
$
|
250
|
|
11.
|
Accrued Expenses and Other Current Liabilities
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
La Quinta tax liability (Note 5)
|
$
|
205
|
|
|
$
|
—
|
|
Accrued payroll and related expenses
|
109
|
|
|
70
|
|
||
Accrued loyalty program liabilities
|
54
|
|
|
47
|
|
||
Accrued legal settlements (Note 13)
|
25
|
|
|
3
|
|
||
Accrued separation expenses
|
19
|
|
|
1
|
|
||
Accrued taxes payable
|
15
|
|
|
10
|
|
||
Accrued self-insurance liabilities
|
15
|
|
|
—
|
|
||
Due to former parent
|
11
|
|
|
—
|
|
||
Accrued marketing expenses
|
8
|
|
|
23
|
|
||
Other
|
41
|
|
|
32
|
|
||
|
$
|
502
|
|
|
$
|
186
|
|
12.
|
Long-Term Debt and Borrowing Arrangements
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Long-term debt:
(a)
|
|
|
|
||||
$750 million revolving credit facility (due May 2023)
|
$
|
—
|
|
|
$
|
—
|
|
Term loan (due May 2025)
|
1,582
|
|
|
—
|
|
||
5.375% senior unsecured notes (due April 2026)
|
494
|
|
|
—
|
|
||
Capital leases
|
65
|
|
|
—
|
|
||
Debt due to former Parent
|
—
|
|
|
184
|
|
||
Total long-term debt
|
2,141
|
|
|
184
|
|
||
Less: Current portion of long-term debt
|
21
|
|
|
103
|
|
||
Long-term debt
|
$
|
2,120
|
|
|
$
|
81
|
|
(a)
|
The carrying amount of the term loan and senior unsecured notes are net of debt issuance costs of
$21 million
as of
December 31, 2018
.
|
|
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
|
22
|
|
|
Thereafter
|
2,035
|
|
|
Total
|
$
|
2,141
|
|
|
Revolving Credit Facility
|
||
Total capacity
|
$
|
750
|
|
Less: Letters of credit
|
15
|
|
|
Available capacity
|
$
|
735
|
|
13.
|
Commitments and Contingencies
|
|
Noncancelable Operating Leases
|
||
2019
|
$
|
6
|
|
2020
|
4
|
|
|
2021
|
3
|
|
|
2022
|
2
|
|
|
|
$
|
15
|
|
|
Guarantees
|
|
Fair Value of Guarantees
|
|
Receivable from former Parent
|
||||||
Post-closing credit support at time of sale
|
$
|
87
|
|
|
$
|
41
|
|
|
$
|
27
|
|
Additional post-closing credit support
|
46
|
|
|
22
|
|
|
15
|
|
|||
Release of post-closing credit support
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total
|
$
|
130
|
|
|
$
|
62
|
|
|
$
|
41
|
|
14.
|
Stock-Based Compensation
|
(a)
|
Represents awards granted by the Company primarily on June 1, 2018.
|
(b)
|
Approximately
0.5 million
RSUs as of
December 31, 2018
are expected to vest over time and have an aggregate unrecognized compensation expense of
$27 million
, which is expected to be recognized over a weighted average period of
3.4 years
.
|
(c)
|
Approximately
0.5 million
options outstanding as of
December 31, 2018
are expected to vest over time and have an aggregate unrecognized compensation expense of
$5 million
, which is expected to be recognized over
3.4 years
.
|
|
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%
|
|
RSUs
|
|
PSUs
|
||||||||||
|
Number of
RSUs |
|
Weighted
Average Grant Price (b) |
|
Number
of PSUs |
|
Weighted
Average Grant Price |
||||||
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
|
(0.5
|
)
|
|
60.82
|
|
|
(0.1
|
)
|
|
60.80
|
|
||
Balance as of December 31, 2018
|
0.1
|
|
(d)
|
$
|
64.46
|
|
|
—
|
|
|
$
|
—
|
|
(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
0.1 million
outstanding RSUs as of
December 31, 2018
are expected to vest over time and have an aggregate unrecognized compensation expense of
$4 million
which is expected to be recognized over a weighted average period of
0.5
years.
|
15.
|
Segment Information
|
|
Hotel Franchising
|
|
Hotel Management
|
|
Corporate and Other
(a)
|
|
Total
|
||||||||
Year Ended or as of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
1,135
|
|
|
$
|
726
|
|
|
$
|
7
|
|
|
$
|
1,868
|
|
Adjusted EBITDA
|
515
|
|
|
47
|
|
|
(55
|
)
|
|
507
|
|
||||
Depreciation and amortization
|
72
|
|
|
21
|
|
|
6
|
|
|
99
|
|
||||
Segment assets
|
3,829
|
|
|
580
|
|
|
567
|
|
|
4,976
|
|
||||
Capital expenditures
|
43
|
|
|
27
|
|
|
3
|
|
|
73
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Year Ended or as of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
897
|
|
|
$
|
383
|
|
|
$
|
—
|
|
|
$
|
1,280
|
|
Adjusted EBITDA
|
402
|
|
|
21
|
|
|
(40
|
)
|
|
383
|
|
||||
Depreciation and amortization
|
59
|
|
|
16
|
|
|
—
|
|
|
75
|
|
||||
Segment assets
|
1,727
|
|
|
400
|
|
|
10
|
|
|
2,137
|
|
||||
Capital expenditures
|
35
|
|
|
11
|
|
|
—
|
|
|
46
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Year Ended or as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
881
|
|
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
1,269
|
|
Adjusted EBITDA
|
400
|
|
|
26
|
|
|
(38
|
)
|
|
388
|
|
||||
Depreciation and amortization
|
58
|
|
|
15
|
|
|
—
|
|
|
73
|
|
||||
Segment assets
|
1,564
|
|
|
427
|
|
|
7
|
|
|
1,998
|
|
||||
Capital expenditures
|
30
|
|
|
12
|
|
|
—
|
|
|
42
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
162
|
|
|
$
|
230
|
|
|
$
|
176
|
|
Provision for income taxes
|
61
|
|
|
13
|
|
|
118
|
|
|||
Depreciation and amortization
|
99
|
|
|
75
|
|
|
73
|
|
|||
Interest expense, net
|
60
|
|
|
6
|
|
|
1
|
|
|||
Stock-based compensation
|
9
|
|
|
11
|
|
|
10
|
|
|||
Separation-related expenses
|
77
|
|
|
3
|
|
|
—
|
|
|||
Transaction-related expenses, net
|
36
|
|
|
3
|
|
|
1
|
|
|||
Foreign currency impact of highly inflationary countries
|
3
|
|
|
—
|
|
|
—
|
|
|||
Impairment expense
|
—
|
|
|
41
|
|
|
—
|
|
|||
Restructuring costs
|
—
|
|
|
1
|
|
|
2
|
|
|||
Contract termination costs
|
—
|
|
|
—
|
|
|
7
|
|
|||
Adjusted EBITDA
|
$
|
507
|
|
|
$
|
383
|
|
|
$
|
388
|
|
|
United States
|
|
All Other Countries
|
|
Total
|
||||||
Year Ended or As of December 31, 2018
|
|
|
|
|
|
||||||
Net revenues
|
$
|
1,641
|
|
|
$
|
227
|
|
|
$
|
1,868
|
|
Net long-lived assets
|
3,681
|
|
|
179
|
|
|
3,860
|
|
|||
|
|
|
|
|
|
||||||
Year Ended or As of December 31, 2017
|
|
|
|
|
|
||||||
Net revenues
|
$
|
1,066
|
|
|
$
|
214
|
|
|
$
|
1,280
|
|
Net long-lived assets
|
1,431
|
|
|
185
|
|
|
1,616
|
|
|||
|
|
|
|
|
|
||||||
Year Ended or As of December 31, 2016
|
|
|
|
|
|
||||||
Net revenues
|
$
|
1,066
|
|
|
$
|
203
|
|
|
$
|
1,269
|
|
Net long-lived assets
|
1,332
|
|
|
204
|
|
|
1,536
|
|
16.
|
Separation-Related and Transaction-Related Costs, Impairments and Other Charges
|
17.
|
Transactions with Former Parent
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash pooling and general financing activities
|
$
|
(110
|
)
|
|
$
|
(227
|
)
|
|
$
|
(390
|
)
|
Indirect general corporate overhead allocations
|
12
|
|
|
35
|
|
|
34
|
|
|||
Corporate allocations for shared services
|
13
|
|
|
29
|
|
|
29
|
|
|||
Stock-based compensation allocations
|
20
|
|
|
11
|
|
|
10
|
|
|||
Income taxes
|
27
|
|
|
93
|
|
|
78
|
|
|||
Net transfers to former Parent
|
(38
|
)
|
|
(59
|
)
|
|
(239
|
)
|
|||
|
|
|
|
|
|
||||||
Contribution of subsidiary borrowings due to former Parent
|
197
|
|
|
—
|
|
|
—
|
|
|||
Capital contribution from former Parent
|
106
|
|
|
—
|
|
|
—
|
|
|||
Dividend to former Parent
|
(109
|
)
|
|
—
|
|
|
—
|
|
|||
Other contributions from former Parent, net
|
66
|
|
|
—
|
|
|
—
|
|
|||
Net transfers to and net contribution from former Parent
|
$
|
222
|
|
|
$
|
(59
|
)
|
|
$
|
(239
|
)
|
18.
|
Quarterly Financial Data (Unaudited)
|
|
|
2018
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net Revenues
|
|
|
|
|
|
|
|
|||||||||
|
Hotel Franchising
|
$
|
203
|
|
|
$
|
289
|
|
|
$
|
348
|
|
|
295
|
|
|
|
Hotel Management
|
99
|
|
|
146
|
|
|
252
|
|
|
229
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
4
|
|
|
3
|
|
||||
|
Total Company
|
302
|
|
|
435
|
|
|
604
|
|
|
527
|
|
||||
Total expenses
|
246
|
|
|
396
|
|
|
499
|
|
|
445
|
|
|||||
Operating income
|
56
|
|
|
39
|
|
|
105
|
|
|
82
|
|
|||||
Interest expense, net
|
1
|
|
|
10
|
|
|
24
|
|
|
25
|
|
|||||
Income before income taxes
|
55
|
|
|
29
|
|
|
81
|
|
|
57
|
|
|||||
Provision for income taxes
|
16
|
|
|
8
|
|
|
23
|
|
|
14
|
|
|||||
Net income
|
$
|
39
|
|
|
$
|
21
|
|
|
$
|
58
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per share
|
$
|
0.40
|
|
|
$
|
0.21
|
|
|
$
|
0.58
|
|
|
$
|
0.43
|
|
|
Diluted weighted average shares outstanding
|
99.8
|
|
|
100.0
|
|
|
100.1
|
|
|
99.2
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of Net income to Adjusted EBITDA
|
||||||||||||||||
Net income
|
$
|
39
|
|
|
$
|
21
|
|
|
$
|
58
|
|
|
$
|
43
|
|
|
|
Provision for income taxes
|
16
|
|
|
8
|
|
|
23
|
|
|
14
|
|
||||
|
Depreciation and amortization
|
19
|
|
|
22
|
|
|
30
|
|
|
29
|
|
||||
|
Interest expense, net
|
1
|
|
|
10
|
|
|
24
|
|
|
25
|
|
||||
|
Stock-based compensation
|
3
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
|
Separation-related expenses
|
12
|
|
|
35
|
|
|
17
|
|
|
14
|
|
||||
|
Transaction-related expenses, net
|
2
|
|
|
28
|
|
|
7
|
|
|
(1
|
)
|
||||
|
Foreign currency impact of highly inflationary countries
|
—
|
|
|
—
|
|
|
4
|
|
|
(1
|
)
|
||||
Adjusted EBITDA
|
$
|
92
|
|
|
$
|
125
|
|
|
$
|
166
|
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA by segment
|
||||||||||||||||
|
Hotel Franchising
|
$
|
86
|
|
|
$
|
129
|
|
|
$
|
178
|
|
|
122
|
|
|
|
Hotel Management
|
16
|
|
|
8
|
|
|
5
|
|
|
18
|
|
||||
|
Corporate and Other
|
(10
|
)
|
|
(12
|
)
|
|
(17
|
)
|
|
(15
|
)
|
||||
|
Total Adjusted EBITDA
|
$
|
92
|
|
|
$
|
125
|
|
|
$
|
166
|
|
|
$
|
125
|
|
|
|
2017
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net Revenues
|
|
|
|
|
|
|
|
|||||||||
|
Hotel Franchising
|
$
|
191
|
|
|
$
|
233
|
|
|
$
|
258
|
|
|
$
|
215
|
|
|
Hotel Management
|
98
|
|
|
98
|
|
|
89
|
|
|
97
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Total Company
|
289
|
|
|
331
|
|
|
347
|
|
|
312
|
|
||||
Total expenses
|
232
|
|
|
247
|
|
|
245
|
|
|
304
|
|
|||||
Operating income
|
57
|
|
|
84
|
|
|
102
|
|
|
8
|
|
|||||
Interest expense, net
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|||||
Income before income taxes
|
55
|
|
|
82
|
|
|
100
|
|
|
7
|
|
|||||
Provision for income taxes
(a)
|
22
|
|
|
34
|
|
|
42
|
|
|
(85
|
)
|
|||||
Net income
|
$
|
33
|
|
|
$
|
48
|
|
|
$
|
58
|
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
$
|
0.33
|
|
|
$
|
0.48
|
|
|
$
|
0.58
|
|
|
$
|
0.92
|
|
|
Diluted weighted average shares outstanding
|
99.8
|
|
|
99.8
|
|
|
99.8
|
|
|
99.8
|
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Net income to Adjusted EBITDA
|
||||||||||||||||
Net Income
|
$
|
33
|
|
|
$
|
48
|
|
|
$
|
58
|
|
|
$
|
92
|
|
|
|
Provision for income taxes
(a)
|
22
|
|
|
34
|
|
|
42
|
|
|
(85
|
)
|
||||
|
Depreciation and amortization
|
18
|
|
|
19
|
|
|
19
|
|
|
19
|
|
||||
|
Interest expense, net
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
||||
|
Stock-based compensation
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
||||
|
Separation-related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
|
Transaction-related expenses, net
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||
|
Impairment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||
|
Restructuring
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
78
|
|
|
$
|
105
|
|
|
$
|
124
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA by segment
|
|
|
|
|
|
|
|
|||||||||
|
Hotel Franchising
|
$
|
78
|
|
|
$
|
111
|
|
|
$
|
132
|
|
|
$
|
81
|
|
|
Hotel Management
|
9
|
|
|
4
|
|
|
1
|
|
|
6
|
|
||||
|
Corporate and Other
|
(9
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|
(11
|
)
|
||||
|
Total Adjusted EBITDA
|
$
|
78
|
|
|
$
|
105
|
|
|
$
|
124
|
|
|
$
|
76
|
|
(a)
|
The Provision for income taxes for the three months ended December 31, 2017, reflects the benefit from U.S tax reform of
$85 million
. See Note 8 - Income Taxes for more information.
|
Exhibit No.
|
Description
|
2.1
|
|
2.2
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19*
|
|
10.20*
|
|
10.21*
|
|
21.1*
|
|
23.1*
|
|
31.1*
|
|
31.2*
|
|
32**
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
By:
|
Wyndham Hotels & Resorts, Inc.
|
1.
|
You and the Company mutually consent to the resolution by final and binding arbitration of any and all disputes, controversies, or claims related in any way to your employment and/or relationship with the Company, including, without limitation, any dispute, controversy or claim of alleged discrimination, harassment, or retaliation (including, but not limited to, claims based on race, sex, sexual preference, religion, national origin, age, marital or family status, medical condition, or disability); any dispute, controversy, or claim arising out of or relating to any agreements between you and the Company, including this Agreement; and any dispute as to the ability to arbitrate a matter under this Agreement (collectively, “
Claims
”);
provided
,
however
, that nothing in this Agreement shall require arbitration of any Claims which, by law, cannot be the subject of a compulsory arbitration agreement, and nothing in this Agreement shall be interpreted to mean that you are precluded from filing complaints with the Equal Employment Opportunity Commission or the National Labor Relations Board.
|
2.
|
Any party who is aggrieved will deliver a notice to the other party setting forth the specific points in dispute within the same statute of limitations period applicable to such Claims. Any points remaining in dispute twenty (20) days after the giving of such notice may be submitted to arbitration in New York, New York, in the Borough of Manhattan, to JAMS, before a single arbitrator appointed in accordance with the Employment Arbitration Rules and Procedures of JAMS (“
JAMS Rules
”) then in effect, modified only as herein expressly provided. The arbitrator shall be selected in accordance with the JAMS Rules;
provided
that the arbitrator shall be an attorney (i) with at least ten (10) years of significant experience in employment matters and/or (ii) a former federal or state court judge. After the aforesaid twenty (20) days, either party, upon ten (10) days’ notice to the other, may so submit the points in dispute to arbitration. The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings. The arbitrator will be empowered to award either party any remedy, at law or in equity, that the party would otherwise have been entitled to, had the matter been litigated in court;
provided
,
however
, that the authority to award any remedy is subject to whatever limitations, if any, exist in the applicable law on such remedies. The arbitrator shall issue a decision or award in writing, stating the essential findings of fact and conclusions of law. Any judgment on or enforcement of any award, including an award providing for interim or permanent injunctive relief, rendered by the arbitrator may be entered, enforced, or appealed in any court having jurisdiction thereof. Any arbitration proceedings, decision, or award rendered hereunder, and the validity, effect, and interpretation of this arbitration provision, shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1
et seq
.
|
3.
|
Each party to any dispute shall pay its own expenses, including attorneys' fees;
provided
,
however
, that the Company shall pay all reasonable costs, fees, and expenses that you would not otherwise have been subject to paying if the Claim had been resolved in a court of competent jurisdiction.
|
4.
|
The parties agree that this Appendix A has been included to rapidly, inexpensively and confidentially resolve any disputes between them, and that this Appendix A will be grounds for dismissal of any court action commenced by either party with respect to this Agreement, except as otherwise provided in Paragraph 1 herein, other than (i) any action seeking a restraining order or other injunctive or equitable relief or order in aid of arbitration or to compel arbitration from a court of competent jurisdiction, (ii) any action seeking interim injunctive or equitable relief from the arbitrator pursuant to the JAMS Rules or (iii) post-arbitration actions seeking to enforce an arbitration award from a court of competent jurisdiction. IN THE EVENT THAT ANY COURT DETERMINES THAT THIS ARBITRATION
|
5.
|
The parties will keep confidential, and will not disclose to any person, except to counsel for either of the parties and/or as may be required by law, the existence of any controversy hereunder, the referral of any such controversy to arbitration or the status or resolution thereof. Accordingly, you and the Company agree that all proceedings in any arbitration shall be conducted under seal and kept strictly confidential. In that regard, no party shall use, disclose, or permit the disclosure of any information, evidence, or documents produced by any other party in the arbitration proceedings or about the existence, contents, or results of the proceedings, except as necessary and appropriate for the preparation and conduct of the arbitration proceedings, or as may be required by any legal process, or as required in an action in aid of arbitration, or for enforcement of or appeal from an arbitral award. Before making any disclosure permitted by the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford such other party a reasonable opportunity to protect its interests (e.g., by application for a protective order and/or to file under seal).
|
By:
|
Wyndham Hotels & Resorts, Inc.
|
1.
|
You and the Company mutually consent to the resolution by final and binding arbitration of any and all disputes, controversies, or claims related in any way to your employment and/or relationship with the Company, including, without limitation, any dispute, controversy or claim of alleged discrimination, harassment, or retaliation (including, but not limited to, claims based on race, sex, sexual preference, religion, national origin, age, marital or family status, medical condition, or disability); any dispute, controversy, or claim arising out of or relating to any agreements between you and the Company, including this Agreement; and any dispute as to the ability to arbitrate a matter under this Agreement (collectively, “
Claims
”);
provided
,
however
, that nothing in this Agreement shall require arbitration of any Claims which, by law, cannot be the subject of a compulsory arbitration agreement, and nothing in this Agreement shall be interpreted to mean that you are precluded from filing complaints with the Equal Employment Opportunity Commission or the National Labor Relations Board.
|
2.
|
Any party who is aggrieved will deliver a notice to the other party setting forth the specific points in dispute within the same statute of limitations period applicable to such Claims. Any points remaining in dispute twenty (20) days after the giving of such notice may be submitted to arbitration in New York, New York, in the Borough of Manhattan, to JAMS, before a single arbitrator appointed in accordance with the Employment Arbitration Rules and Procedures of JAMS (“
JAMS Rules
”) then in effect, modified only as herein expressly provided. The arbitrator shall be selected in accordance with the JAMS Rules;
provided
that the arbitrator shall be an attorney (i) with at least ten (10) years of significant experience in employment matters and/or (ii) a former federal or state court judge. After the aforesaid twenty (20) days, either party, upon ten (10) days’ notice to the other, may so submit the points in dispute to arbitration. The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings. The arbitrator will be empowered to award either party any remedy, at law or in equity, that the party would otherwise have been entitled to, had the matter been litigated in court;
provided
,
however
, that the authority to award any remedy is subject to whatever limitations, if any, exist in the applicable law on such remedies. The arbitrator shall issue a decision or award in writing, stating the essential findings of fact and conclusions of law. Any judgment on or enforcement of any award, including an award providing for interim or permanent injunctive relief, rendered by the arbitrator may be entered, enforced, or appealed in any court having jurisdiction thereof. Any arbitration proceedings, decision, or award rendered hereunder, and the validity, effect, and interpretation of this arbitration provision, shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1
et seq
.
|
3.
|
Each party to any dispute shall pay its own expenses, including attorneys' fees;
provided
,
however
, that the Company shall pay all reasonable costs, fees, and expenses that you would not otherwise have been subject to paying if the Claim had been resolved in a court of competent jurisdiction.
|
4.
|
The parties agree that this Appendix A has been included to rapidly, inexpensively and confidentially resolve any disputes between them, and that this Appendix A will be grounds for dismissal of any court action commenced by either party with respect to this Agreement, except as otherwise provided in Paragraph 1 herein, other than (i) any action seeking a restraining order or other injunctive or equitable relief or order in aid of arbitration or to compel arbitration from a court of competent jurisdiction, (ii) any action seeking interim injunctive or equitable relief from the arbitrator pursuant to the JAMS Rules or (iii) post-arbitration actions seeking to enforce an arbitration award from a court of competent jurisdiction. IN THE EVENT THAT ANY COURT DETERMINES THAT THIS ARBITRATION
|
5.
|
The parties will keep confidential, and will not disclose to any person, except to counsel for either of the parties and/or as may be required by law, the existence of any controversy hereunder, the referral of any such controversy to arbitration or the status or resolution thereof. Accordingly, you and the Company agree that all proceedings in any arbitration shall be conducted under seal and kept strictly confidential. In that regard, no party shall use, disclose, or permit the disclosure of any information, evidence, or documents produced by any other party in the arbitration proceedings or about the existence, contents, or results of the proceedings, except as necessary and appropriate for the preparation and conduct of the arbitration proceedings, or as may be required by any legal process, or as required in an action in aid of arbitration, or for enforcement of or appeal from an arbitral award. Before making any disclosure permitted by the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford such other party a reasonable opportunity to protect its interests (e.g., by application for a protective order and/or to file under seal).
|
By:
|
Wyndham Hotels & Resorts, Inc.
|
1.
|
You and the Company mutually consent to the resolution by final and binding arbitration of any and all disputes, controversies, or claims related in any way to your employment and/or relationship with the Company, including, without limitation, any dispute, controversy or claim of alleged discrimination, harassment, or retaliation (including, but not limited to, claims based on race, sex, sexual preference, religion, national origin, age, marital or family status, medical condition, or disability); any dispute, controversy, or claim arising out of or relating to any agreements between you and the Company, including this Agreement; and any dispute as to the ability to arbitrate a matter under this Agreement (collectively, “
Claims
”);
provided
,
however
, that nothing in this Agreement shall require arbitration of any Claims which, by law, cannot be the subject of a compulsory arbitration agreement, and nothing in this Agreement shall be interpreted to mean that you are precluded from filing complaints with the Equal Employment Opportunity Commission or the National Labor Relations Board.
|
2.
|
Any party who is aggrieved will deliver a notice to the other party setting forth the specific points in dispute within the same statute of limitations period applicable to such Claims. Any points remaining in dispute twenty (20) days after the giving of such notice may be submitted to arbitration in New York, New York, in the Borough of Manhattan, to JAMS, before a single arbitrator appointed in accordance with the Employment Arbitration Rules and Procedures of JAMS (“
JAMS Rules
”) then in effect, modified only as herein expressly provided. The arbitrator shall be selected in accordance with the JAMS Rules;
provided
that the arbitrator shall be an attorney (i) with at least ten (10) years of significant experience in employment matters and/or (ii) a former federal or state court judge. After the aforesaid twenty (20) days, either party, upon ten (10) days’ notice to the other, may so submit the points in dispute to arbitration. The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings. The arbitrator will be empowered to award either party any remedy, at law or in equity, that the party would otherwise have been entitled to, had the matter been litigated in court;
provided
,
however
, that the authority to award any remedy is subject to whatever limitations, if any, exist in the applicable law on such remedies. The arbitrator shall issue a decision or award in writing, stating the essential findings of fact and conclusions of law. Any judgment on or enforcement of any award, including an award providing for interim or permanent injunctive relief, rendered by the arbitrator may be entered, enforced, or appealed in any court having jurisdiction thereof. Any arbitration proceedings, decision, or award rendered hereunder, and the validity, effect, and interpretation of this arbitration provision, shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1
et seq
.
|
3.
|
Each party to any dispute shall pay its own expenses, including attorneys' fees;
provided
,
however
, that the Company shall pay all reasonable costs, fees, and expenses that you would not otherwise have been subject to paying if the Claim had been resolved in a court of competent jurisdiction.
|
4.
|
The parties agree that this Appendix A has been included to rapidly, inexpensively and confidentially resolve any disputes between them, and that this Appendix A will be grounds for dismissal of any court action commenced by either party with respect to this Agreement, except as otherwise provided in Paragraph 1 herein, other than (i) any action seeking a restraining order or other injunctive or equitable relief or order in aid of arbitration or to compel arbitration from a court of competent jurisdiction, (ii) any action seeking interim injunctive or equitable relief from the arbitrator pursuant to the JAMS Rules or (iii) post-arbitration actions seeking to enforce an arbitration award from a court of competent jurisdiction. IN THE EVENT THAT ANY COURT DETERMINES THAT THIS ARBITRATION
|
5.
|
The parties will keep confidential, and will not disclose to any person, except to counsel for either of the parties and/or as may be required by law, the existence of any controversy hereunder, the referral of any such controversy to arbitration or the status or resolution thereof. Accordingly, you and the Company agree that all proceedings in any arbitration shall be conducted under seal and kept strictly confidential. In that regard, no party shall use, disclose, or permit the disclosure of any information, evidence, or documents produced by any other party in the arbitration proceedings or about the existence, contents, or results of the proceedings, except as necessary and appropriate for the preparation and conduct of the arbitration proceedings, or as may be required by any legal process, or as required in an action in aid of arbitration, or for enforcement of or appeal from an arbitral award. Before making any disclosure permitted by the preceding sentence, the party intending to make such disclosure shall give the other party reasonable written notice of the intended disclosure and afford such other party a reasonable opportunity to protect its interests (e.g., by application for a protective order and/or to file under seal).
|
Name
|
|
Jurisdiction of Organization
|
Wyndham Hotel Group, LLC
|
|
Delaware
|
La Quinta Holdings Inc.
|
|
Delaware
|
La Quinta Intermediate Holdings L.L.C.
|
|
Delaware
|
Lodge Holdco II L.L.C.
|
|
Delaware
|
La Quinta Franchising LLC
|
|
Nevada
|
Ramada International, Inc.
|
|
Delaware
|
La Quinta Worldwide, LLC
|
|
Nevada
|
Entity Name
|
|
Assumed Name
|
None
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Wyndham Hotels & Resorts, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 14, 2019
|
|
|
/S/ GEOFFREY A. BALLOTTI
|
|
PRESIDENT AND CHIEF EXECUTIVE OFFICER
|
1.
|
I have reviewed this annual report on Form 10-K of Wyndham Hotels & Resorts, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 14, 2019
|
|
|
/S/ DAVID B. WYSHNER
|
|
CHIEF FINANCIAL OFFICER
|
(1.)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2.)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ GEOFFREY A. BALLOTTI
|
GEOFFREY A. BALLOTTI
|
PRESIDENT AND CHIEF EXECUTIVE OFFICER
|
February 14, 2019
|
/s/ DAVID B. WYSHNER
|
DAVID B. WYSHNER
|
CHIEF FINANCIAL OFFICER
|
February 14, 2019
|