HYATT HOTELS CORP, 10-Q filed on 11/5/2020
Quarterly Report
v3.20.2
Cover Page - shares
9 Months Ended
Sep. 30, 2020
Oct. 30, 2020
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2020  
Document Transition Report false  
Entity File Number 001-34521  
Entity Registrant Name HYATT HOTELS CORP  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-1480589  
Entity Address, Address Line One 150 North Riverside Plaza  
Entity Address, Address Line Two 8th Floor  
Entity Address, City or Town Chicago  
Entity Address, State or Province IL  
Entity Address, Postal Zip Code 60606  
City Area Code 312  
Local Phone Number 750-1234  
Title of 12(b) Security Class A common stock  
Trading Symbol H  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0001468174  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Common Class A    
Document Information    
Entity Common Stock, Shares Outstanding   38,479,041
Common Class B    
Document Information    
Entity Common Stock, Shares Outstanding   62,696,948
v3.20.2
Condensed Consolidated Statements of Income (Loss) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
REVENUES:        
Total revenues $ 399 $ 1,215 $ 1,642 $ 3,745
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Depreciation and amortization 80 85 233 248
Other direct costs 9 28 50 103
Selling, general, and administrative 69 83 217 306
Direct and selling, general, and administrative expenses 567 1,175 2,063 3,598
Net gains and interest income from marketable securities held to fund rabbi trusts 22 0 23 41
Equity losses from unconsolidated hospitality ventures (20) (5) (45) (2)
Interest expense (35) (19) (87) (58)
Gains on sales of real estate 0 373 8 374
Asset impairments 0 (9) (52) (13)
Other income (loss), net (19) 25 (114) 104
INCOME (LOSS) BEFORE INCOME TAXES (220) 405 (688) 593
BENEFIT (PROVISION) FOR INCOME TAXES 59 (109) 188 (148)
NET INCOME (LOSS) (161) 296 (500) 445
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (161) $ 296 $ (500) $ 445
EARNINGS (LOSSES) PER SHARE—Basic        
Net income (loss) (in dollars per share) $ (1.59) $ 2.84 $ (4.93) $ 4.23
Net income (loss) attributable to Hyatt Hotels Corporation (in dollars per share) (1.59) 2.84 (4.93) 4.23
EARNINGS (LOSSES) PER SHARE—Diluted        
Net income (loss) (in dollars per share) (1.59) 2.80 (4.93) 4.17
Net income (loss) attributable to Hyatt Hotels Corporation (in dollars per share) $ (1.59) $ 2.80 $ (4.93) $ 4.17
Owned and leased hotels        
REVENUES:        
Total revenues $ 80 $ 430 $ 422 $ 1,390
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Owned and leased hotels 131 346 495 1,070
Costs incurred on behalf of managed and franchised properties 131 346 495 1,070
Management, franchise, and other fees        
REVENUES:        
Total revenues 52 148 180 447
Amortization of management and franchise agreement assets constituting payments to customers        
REVENUES:        
Total revenues (7) (5) (20) (16)
Net management, franchise, and other fees        
REVENUES:        
Total revenues 45 143 160 431
Other revenues        
REVENUES:        
Total revenues 7 25 45 98
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties        
REVENUES:        
Total revenues 267 617 1,015 1,826
Costs incurred on behalf of managed and franchised properties        
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Owned and leased hotels 278 633 1,068 1,871
Costs incurred on behalf of managed and franchised properties $ 278 $ 633 $ 1,068 $ 1,871
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ (161) $ 296 $ (500) $ 445
Other comprehensive income (loss), net of taxes:        
Foreign currency translation adjustments, net of tax expense (benefit) of $1 for the three and nine months ended September 30, 2020 and $(1) for the three and nine months ended September 30, 2019, respectively 15 (27) (17) (27)
Unrealized gains (losses) on derivative activity, net of tax benefit of $— and $(9) for the three and nine months ended September 30, 2020 and $(3) and $(7) for the three and nine months ended September 30, 2019, respectively 2 (9) (24) (21)
Other comprehensive income (loss) 17 (36) (41) (48)
COMPREHENSIVE INCOME (LOSS) (144) 260 (541) 397
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (144) $ 260 $ (541) $ 397
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) - Parentheticals - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, net of tax (benefit) $ 1 $ (1) $ 1 $ (1)
Unrealized gains on derivative activity, net of tax expense $ 0 $ (3) $ (9) $ (7)
v3.20.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Sep. 30, 2020
Dec. 31, 2019
CURRENT ASSETS:    
Cash and cash equivalents $ 1,778 $ 893
Restricted cash 12 [1] 150
Short-term investments 310 68
Receivables, net of allowances of $46 and $32 at September 30, 2020 and December 31, 2019, respectively 322 421
Inventories 14 12
Prepaids and other assets 42 134
Prepaid income taxes 160 28
Total current assets 2,638 1,706
Equity method investments 260 232
Property and equipment, net 3,178 3,456
Financing receivables, net of allowances of $107 and $100 at September 30, 2020 and December 31, 2019, respectively 32 35
Operating lease right-of-use assets 485 493
Goodwill 288 326
Intangibles, net 412 437
Deferred tax assets 243 144
Other assets 1,689 1,588
TOTAL ASSETS 9,225 8,417
CURRENT LIABILITIES:    
Current maturities of long-term debt 260 11
Accounts payable 101 150
Accrued expenses and other current liabilities 228 304
Current contract liabilities 246 445
Accrued compensation and benefits 103 144
Current operating lease liabilities 32 32
Total current liabilities 970 1,086
Long-term debt 2,981 1,612
Long-term contract liabilities 643 475
Long-term operating lease liabilities 390 393
Other long-term liabilities 888 884
Total liabilities 5,872 4,450
Commitments and contingencies (see Note 13)
EQUITY:    
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding as of September 30, 2020 and December 31, 2019 0 0
Common stock, value 1 1
Additional paid-in capital 7 0
Retained earnings 3,592 4,170
Accumulated other comprehensive loss (250) (209)
Total stockholders' equity 3,350 3,962
Noncontrolling interests in consolidated subsidiaries 3 5
Total equity 3,353 3,967
TOTAL LIABILITIES AND EQUITY $ 9,225 $ 8,417
[1] Restricted cash generally represents sales proceeds pursuant to like-kind exchanges, debt service on bonds, escrow deposits, and other arrangements.
v3.20.2
Condensed Consolidated Balance Sheet - Parentheticals - USD ($)
$ in Millions
Sep. 30, 2020
Dec. 31, 2019
Allowance for doubtful accounts receivable, current $ 46 $ 32
Financing receivable, allowance for credit loss $ 107 $ 100
Preferred stock, par value per share (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares outstanding (in shares) 0 0
Common stock, shares, issued (in shares) 0  
Common Class A    
Common stock, par value per share (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, shares, outstanding (in shares) 38,466,898 36,109,179
Common stock, shares, issued (in shares) 38,466,898 36,109,179
Common Class B    
Common stock, par value per share (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 394,691,360 397,457,686
Common stock, shares, outstanding (in shares) 62,696,948 65,463,274
Common stock, shares, issued (in shares) 62,696,948 65,463,274
v3.20.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ (500) $ 445
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Gains on sales of real estate (8) (374)
Depreciation and amortization 233 248
Release of contingent consideration liability 0 (29)
Amortization of share awards 24 32
Amortization of operating lease right-of-use assets 23 28
Deferred income taxes (59) 32
Asset impairments 52 13
Equity losses from unconsolidated hospitality ventures 45 2
Amortization of management and franchise agreement assets constituting payments to customers 20 16
Unrealized (gains) losses, net 36 (23)
Working capital changes and other (329) (116)
Net cash provided by (used in) operating activities (463) 274
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of marketable securities and short-term investments (622) (196)
Proceeds from marketable securities and short-term investments 399 255
Contributions to equity method and other investments (57) (39)
Return of equity method and other investments 5 26
Acquisitions, net of cash acquired 0 (18)
Capital expenditures (104) (244)
Proceeds from sales of real estate, net of cash disposed 78 461
Proceeds from financing receivables 0 46
Other investing activities (17) 7
Net cash provided by (used in) investing activities (318) 298
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from debt, net of issuance costs of $15 and $— for the nine months ended September 30, 2020 and September 30, 2019, respectively 2,035 180
Repayments of debt (405) (187)
Repurchases of common stock (69) (280)
Contingent consideration paid 0 (24)
Dividends paid (20) (60)
Other financing activities (14) (9)
Net cash provided by (used in) financing activities 1,527 (380)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1 6
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 747 198
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR 1,063 622
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD 1,810 820
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Total cash, cash equivalents, and restricted cash 1,810 820
Cash paid during the period for interest 73 78
Cash paid during the period for income taxes 54 52
Cash paid for amounts included in the measurement of operating lease liabilities 32 38
Non-cash investing and financing activities are as follows:    
Non-cash contributions to equity method and other investments (see Note 7, Note 13) 33 8
Change in accrued capital expenditures (7) 11
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 7) $ 14 $ 8
v3.20.2
Condensed Consolidated Statements of Cash Flows - Parenthetical - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Statement of Cash Flows [Abstract]    
Debt issuance cost $ 15 $ 0
v3.20.2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Millions
Total
Common Stock Amount
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Noncontrolling Interests in Consolidated Subsidiaries
Common Class A
Common Class A
Common Stock Amount
Common Class B
Common Class B
Common Stock Amount
Cumulative Effect, Period of Adoption, Adjustment
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Cumulative Effect, Period of Adoption, Adjusted Balance
Cumulative Effect, Period of Adoption, Adjusted Balance
Common Stock Amount
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjusted Balance
Retained Earnings
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated Other Comprehensive Loss
Cumulative Effect, Period of Adoption, Adjusted Balance
Noncontrolling Interests in Consolidated Subsidiaries
Balance, beginning of period (in shares) at Dec. 31, 2018               39,507,817   67,115,828                
Balance, beginning of period at Dec. 31, 2018 $ 3,677 $ 1 $ 50 $ 3,819 $ (200) $ 7                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) 53     63 (10)                          
Noncontrolling interests (1)         (1)                        
Repurchase of common stock (in shares)               (1,452,858)                    
Repurchase of common stock (102)   (71) (31)                            
Employee stock plan issuance (in shares)               19,245                    
Employee stock plan issuance 1   1                              
Share-based payment activity (in shares)               326,972                    
Share-based payment activity 20   20                              
Cash dividends (20)     (20)                            
Balance, end of period (in shares) at Mar. 31, 2019               38,401,176   67,115,828                
Balance, end of period at Mar. 31, 2019 3,628 1 0 3,831 (210) 6                        
Balance, beginning of period (in shares) at Dec. 31, 2018               39,507,817   67,115,828                
Balance, beginning of period at Dec. 31, 2018 3,677 1 50 3,819 (200) 7                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) 397                                  
Repurchase of common stock (in shares)                 (677,384)                  
Repurchase of common stock                 $ (50)                  
Cash dividends (60)           $ (22)   $ (38)                  
Balance, end of period (in shares) at Sep. 30, 2019               36,811,374   66,438,444                
Balance, end of period at Sep. 30, 2019 3,761 1 0 4,003 (248) 5                        
Balance, beginning of period (in shares) at Mar. 31, 2019               38,401,176   67,115,828                
Balance, beginning of period at Mar. 31, 2019 3,628 1 0 3,831 (210) 6                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) 84     86 (2)                          
Noncontrolling interests (1)         (1)                        
Repurchase of common stock (in shares)               (599,678)                    
Repurchase of common stock (45)   (1) (44)                            
Directors compensation 1   1                              
Employee stock plan issuance (in shares)               20,523                    
Employee stock plan issuance 1   1                              
Share-based payment activity (in shares)               44,993                    
Share-based payment activity (1)   (1)                              
Cash dividends (20)     (20)                            
Balance, end of period (in shares) at Jun. 30, 2019               37,867,014   67,115,828                
Balance, end of period at Jun. 30, 2019 3,647 1 0 3,853 (212) 5                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) 260     296 (36)                          
Repurchase of common stock (in shares)               (1,099,507) (677,384) (677,384)                
Repurchase of common stock (133)   (7) (126)         $ (50)                  
Employee stock plan issuance (in shares)               20,026                    
Employee stock plan issuance 2   2                              
Share-based payment activity (in shares)               23,841                    
Share-based payment activity 5   5                              
Cash dividends (20)     (20)     (8)   (12)                  
Balance, end of period (in shares) at Sep. 30, 2019               36,811,374   66,438,444                
Balance, end of period at Sep. 30, 2019 3,761 1 0 4,003 (248) 5                        
Balance, beginning of period (in shares) at Dec. 31, 2019               36,109,179   65,463,274                
Balance, beginning of period at Dec. 31, 2019 3,967 1 0 4,170 (209) 5         $ (1) $ (1) $ 3,966 $ 1 $ 0 $ 4,169 $ (209) $ 5
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) (179)     (103) (76)                          
Noncontrolling interests (2)         (2)                        
Repurchase of common stock (in shares)               (827,643)                    
Repurchase of common stock (69)   (12) (57)                            
Employee stock plan issuance (in shares)               16,654                    
Employee stock plan issuance 1   1                              
Share-based payment activity (in shares)               271,863                    
Share-based payment activity 11   11                              
Cash dividends (20)     (20)                            
Balance, end of period (in shares) at Mar. 31, 2020               35,570,053   65,463,274                
Balance, end of period at Mar. 31, 2020 3,708 1 0 3,989 (285) 3                        
Balance, beginning of period (in shares) at Dec. 31, 2019               36,109,179   65,463,274                
Balance, beginning of period at Dec. 31, 2019 3,967 1 0 4,170 (209) 5         $ (1) $ (1) $ 3,966 $ 1 $ 0 $ 4,169 $ (209) $ 5
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) (541)                                  
Cash dividends (20)           (7)   (13)                  
Balance, end of period (in shares) at Sep. 30, 2020               38,466,898   62,696,948                
Balance, end of period at Sep. 30, 2020 3,353 1 7 3,592 (250) 3                        
Balance, beginning of period (in shares) at Mar. 31, 2020               35,570,053   65,463,274                
Balance, beginning of period at Mar. 31, 2020 3,708 1 0 3,989 (285) 3                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) (218)     (236) 18                          
Employee stock plan issuance (in shares)               35,338                    
Employee stock plan issuance 2   2                              
Share-based payment activity (in shares)               74,047                    
Share-based payment activity 1   1                              
Class share conversions (in shares)               2,435,243   (2,435,243)                
Balance, end of period (in shares) at Jun. 30, 2020               38,114,681   63,028,031                
Balance, end of period at Jun. 30, 2020 3,493 1 3 3,753 (267) 3                        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                    
Total comprehensive income (loss) (144)     (161) 17                          
Employee stock plan issuance (in shares)               11,628                    
Employee stock plan issuance 0                                  
Share-based payment activity (in shares)               9,506                    
Share-based payment activity 4   4                              
Class share conversions (in shares)               331,083   (331,083)                
Cash dividends 0           $ 0   $ 0                  
Balance, end of period (in shares) at Sep. 30, 2020               38,466,898   62,696,948                
Balance, end of period at Sep. 30, 2020 $ 3,353 $ 1 $ 7 $ 3,592 $ (250) $ 3                        
v3.20.2
Condensed Consolidated Statements of Changes in Stockholders' Equity - Parenthetical - $ / shares
3 Months Ended
Mar. 09, 2020
Sep. 09, 2019
Jun. 10, 2019
Mar. 11, 2019
Mar. 31, 2020
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]                
Cash dividend (in dollars per share) $ 0.20 $ 0.19 $ 0.19 $ 0.19 $ 0.20 $ 0.19 $ 0.19 $ 0.19
v3.20.2
Organization
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization ORGANIZATION
Hyatt Hotels Corporation, a Delaware corporation, and its consolidated subsidiaries (collectively "Hyatt Hotels Corporation") provide hospitality and other services on a worldwide basis through the development, ownership, operation, management, franchising, and licensing of hospitality and wellness-related businesses. We develop, own, operate, manage, franchise, license, or provide services to a portfolio of properties, consisting of full service hotels, select service hotels, resorts, and other properties, including branded spas and fitness studios, timeshare, fractional, and other forms of residential, vacation, and condominium ownership units. At September 30, 2020, (i) we operated or franchised 462 full service hotels, comprising 158,731 rooms throughout the world, (ii) we operated or franchised 493 select service hotels, comprising 70,562 rooms, of which 418 hotels are located in the United States, and (iii) we franchised 8 all-inclusive Hyatt-branded resorts, comprising 3,153 rooms. At September 30, 2020, our portfolio of properties operated in 67 countries around the world. Additionally, through strategic relationships, we provide certain reservation and/or loyalty program services to hotels that are unaffiliated with our hotel portfolio and operate under other tradenames or marks owned by such hotel or licensed by third parties.
As used in these Notes and throughout this Quarterly Report on Form 10-Q, (i) the terms "Hyatt," "Company," "we," "us," or "our" mean Hyatt Hotels Corporation and its consolidated subsidiaries, (ii) the term "properties" refers to hotels, resorts, and other properties, including branded spas and fitness studios, and residential, vacation, and condominium ownership units that we develop, own, operate, manage, franchise, or to which we provide services or license our trademarks, (iii) "Hyatt portfolio of properties" or "portfolio of properties" refers to hotels, resorts, and other properties that we develop, own, operate, manage, franchise, license, or provide services to, including under the Park Hyatt, Miraval, Grand Hyatt, Alila, Andaz, The Unbound Collection by Hyatt, Destination, Hyatt Regency, Hyatt, Hyatt Ziva, Hyatt Zilara, Thompson Hotels, Hyatt Centric, Caption by Hyatt, Joie de Vivre, Hyatt House, Hyatt Place, tommie, Hyatt Residence Club, and Exhale brands, (iv) the term "worldwide hotel portfolio" includes our full service hotels, including our wellness resorts, and our select service hotels, (v) the term "worldwide property portfolio" includes our all-inclusive resorts, branded spas and fitness studios, and residential, vacation, and condominium ownership units in addition to our worldwide hotel portfolio, and (vi) the term "hospitality ventures" refers to entities in the hospitality industry in which we own less than a 100% equity interest.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes required by GAAP for complete annual financial statements. As a result, this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the "2019 Form 10-K").
We have eliminated all intercompany accounts and transactions in our condensed consolidated financial statements. We consolidate entities under our control, including entities where we are deemed to be the primary beneficiary.
Management believes the accompanying condensed consolidated financial statements reflect all adjustments, which are all of a normal recurring nature, considered necessary for a fair presentation of the interim periods.
v3.20.2
Impact of the COVID-19 Pandemic
9 Months Ended
Sep. 30, 2020
Unusual or Infrequent Items, or Both [Abstract]  
Impact of the COVID-19 Pandemic IMPACT OF THE COVID-19 PANDEMIC
Overview
The COVID-19 pandemic and related travel restrictions and containment efforts have had a significant impact on the travel industry and, as a result, on our business. The impact began in the first quarter of 2020 and has continued throughout 2020. As a result, our financial results for the current interim period, and for the foreseeable future, are not comparable to past performance or indicative of long-term future performance. 
Financial Impact
We evaluate our goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter of each year and at interim dates, if indicators of impairment exist. Given the impact the COVID-19 pandemic is having on our industry, we concluded that indicators of impairment existed during the nine months ended September 30, 2020 for certain goodwill reporting units and indefinite-lived intangibles, and we updated our previous cash flow assumptions based on the current demand trends, historical experiences, and our future expectations for these reporting units and indefinite-lived intangibles. Our assumptions are subject to inherent risk and uncertainty due to the ongoing impact of the COVID-19 pandemic on the hospitality industry. Based on our discounted cash flow analyses, the carrying values of certain reporting units were in excess of the fair values, which were determined to be Level Three fair value measurements, and we recognized $38 million of goodwill impairment charges during the nine months ended September 30, 2020 (see Note 8). The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss) within the owned and leased hotels segment. We concluded that there were no impairments of indefinite-lived intangible assets during the nine months ended September 30, 2020. We will continue to monitor the impact the COVID-19 pandemic is having on our business and the valuations of our goodwill and indefinite-lived intangible assets.
We evaluate property and equipment, operating lease right-of-use assets, definite-lived intangible assets, and equity method investments for impairment quarterly. For the nine months ended September 30, 2020, we assessed the recoverability of the net book value of property and equipment, operating lease right-of-use assets, and definite-lived intangible assets and determined that the carrying value of certain assets were not fully recoverable. We then estimated the fair value of these assets and determined that the carrying values were in excess of the fair values. Our analyses incorporated cash flow assumptions based on current economic trends, historical experience, and future growth projections, and the fair value measurements were determined to be Level Three fair value measurements. Based on our analyses and contract terminations, during the nine months ended September 30, 2020, we recognized $14 million of impairment charges related to property and equipment, operating lease right-of-use assets, and management agreement intangibles. The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss), primarily within corporate and other. For our equity method investments, we considered the impact of the COVID-19 pandemic on the underlying operations of the investments to determine whether there were any indications that the declines in value were other than temporary and none were identified.
In assessing our financial assets for credit losses, we considered the impact of the COVID-19 pandemic. As a result of our analyses, during the three and nine months ended September 30, 2020, we recognized $6 million and $19 million, respectively, of accounts receivable reserves in selling, general, and administrative expenses on our condensed consolidated statements of income (loss). During the three and nine months ended September 30, 2020, we recognized $7 million and $12 million, respectively, of credit losses related to certain of our held-to-maturity ("HTM") debt securities and financing receivables, of which $1 million and $6 million was offset by interest income recognized in the same periods (see Notes 5 and 6). The credit losses and interest income were both recognized in other income (loss), net on our condensed consolidated statements of income (loss). During the three and nine months ended September 30, 2020, we recognized $1 million and $14 million, respectively, in credit losses related to a debt repayment guarantee, which has not been funded, in other income (loss), net on our condensed consolidated statements of income (loss) (see Note 13). We will continue to monitor our financial assets for potential credit risk as the impact of the COVID-19 pandemic evolves.
v3.20.2
Recently Issued Accounting Pronouncements
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Recently Issued Accounting Pronouncements RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Summary of Significant Accounting Policies
Our significant accounting policies are detailed in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 2 to our Consolidated Financial Statements" within the 2019 Form 10-K. Upon adoption of Accounting Standards Update No. 2016-13 ("ASU 2016-13"), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, our accounting policies have been updated as follows:
Debt and Equity Securities—Excluding equity method investments, debt and equity securities consist of various investments:
Equity securities consist of interest-bearing money market funds, mutual funds, common shares, and preferred shares. Equity securities with a readily determinable fair value are recorded at fair value on our condensed consolidated balance sheets based on listed market prices or dealer quotations where available. Equity securities without a readily determinable fair value are recorded at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Net gains and losses, both realized and unrealized, and impairment charges on equity securities are recognized in other income (loss), net on our condensed consolidated statements of income (loss).
Debt securities include preferred shares, time deposits, and fixed income securities, including U.S. government obligations, obligations of other government agencies, corporate debt, mortgage-backed and asset-backed securities, and municipal and provincial notes and bonds. Debt securities are classified as trading, available-for-sale ("AFS"), or held-to-maturity.
Trading securities—recorded at fair value based on listed market prices or dealer price quotations, where available. Net gains and losses, both realized and unrealized, on trading securities are recognized in net gains and interest income from marketable securities held to fund rabbi trusts or other income (loss), net, depending on the nature of the investment, on our condensed consolidated statements of income (loss).
AFS securities—recorded at fair value based on listed market prices or dealer price quotations, where available. Unrealized gains and losses on AFS debt securities are recognized in accumulated other comprehensive loss on our condensed consolidated balance sheets. Realized gains and losses on AFS debt securities are recognized in other income (loss), net on our condensed consolidated statements of income (loss). AFS securities are assessed quarterly for expected credit losses which are recognized in other income (loss), net on our condensed consolidated statements of income (loss). In determining the reserve for credit losses, we evaluate AFS securities at the individual security level and consider our investment strategy, current market conditions, financial strength of the underlying investments, term to maturity, credit rating, and our intent and ability to sell the securities.
HTM securities—investments that we have the intent and ability to hold until maturity are recorded at amortized cost, net of expected credit losses. HTM securities are assessed for expected credit losses quarterly, and credit losses are recognized in other income (loss), net on our condensed consolidated statements of income (loss). We evaluate HTM securities individually when determining the reserve for credit losses due to the unique risks associated with each security. In determining the reserve for credit losses, we consider the financial strength of the underlying assets including the current and forecasted performance of the property, term to maturity, credit quality of the owner, and current market conditions.
We classify debt securities as current or long-term, based on their contractual maturity dates and our intent and ability to hold.
Our preferred shares earn a return that is recognized as interest income in other income (loss), net.
For additional information about debt and equity securities, see Note 5.
Financing Receivables—Financing receivables represent contractual rights to receive money either on demand or on fixed or determinable dates and are recorded on our condensed consolidated balance sheets at
amortized cost, net of expected credit losses. We recognize interest as earned and include accrued interest in the amortized cost basis of the asset.
Our financing receivables are composed of individual, unsecured loans and other types of unsecured financing arrangements provided to hotel owners. These financing receivables generally have stated maturities and interest rates, but the repayment terms vary and may be dependent on future cash flows of the hotel. We individually assess all financing receivables for credit losses quarterly and establish a reserve to reflect the net amount expected to be collected. We estimate credit losses based on an analysis of several factors, including current economic conditions, industry trends, and specific risk characteristics of the financing receivable, including capital structure, loan performance, market factors, and the underlying hotel performance. Adjustments to credit losses on financing receivables are recognized in other income (loss), net on our condensed consolidated statements of income (loss).
We evaluate accrued interest allowances separately from the financing receivable assets. On an ongoing basis, we monitor the credit quality of our financing receivables based on historical and expected future payment activity. We determine our financing to hotel owners to be non-performing if interest or principal is greater than 90 days past due based on the contractual terms of the individual financing receivables or if an allowance has been established for our other financing arrangements with that borrower. If we consider a financing receivable to be non-performing, we place the financing receivable on non-accrual status.
For financing receivables on non-accrual status, we recognize interest income in other income (loss), net in our condensed consolidated statements of income (loss) when cash is received. Accrual of interest income is resumed and potential reversal of any associated allowance for credit loss occurs when the receivable becomes contractually current and collection doubts are removed.
After an allowance for credit losses has been established, we may determine the receivable balance is uncollectible when all commercially reasonable means of recovering the receivable balance have been exhausted. We write off uncollectible balances by reversing the financing receivable and the related allowance for credit losses. For additional information about financing receivables, see Note 6.
Accounts Receivables—Our accounts receivables primarily consist of trade receivables due from guests for services rendered at our owned and leased properties and from hotel owners with whom we have management and franchise agreements for services rendered and for reimbursements of costs incurred on behalf of managed and franchised properties. We assess all accounts receivables for credit losses quarterly and establish a reserve to reflect the net amount expected to be collected. The credit loss reserve is based on an assessment of historical collection activity, the nature of the receivable, geographic considerations, and the current business environment. The allowance for credit losses is recognized in owned and leased hotels expense or selling, general, and administrative expenses on our condensed consolidated statements of income (loss), based on the nature of the receivable.
Guarantees—We enter into performance guarantees related to certain hotels we manage. We also enter into debt repayment and other guarantees with respect to unconsolidated hospitality ventures, certain managed hotels, and other properties. We record a liability for the fair value of these guarantees at their inception date. In order to estimate the fair value, we use a Monte Carlo simulation to model the probability of possible outcomes. The valuation methodology requires that we make certain assumptions and judgments regarding discount rates, volatility, hotel operating results, and hotel property sales prices. The fair value is not re-valued due to future changes in assumptions. The corresponding offset depends on the circumstances in which the guarantee was issued and is recorded to equity method investments, other assets, or expenses. We amortize the liability for the fair value of a guarantee into income over the term of the guarantee using a systematic and rational, risk-based approach. Guarantees related to our managed hotels and other properties are amortized into income in other income (loss), net in our condensed consolidated statements of income (loss). Guarantees related to our unconsolidated hospitality ventures are amortized into equity earnings (losses) from unconsolidated hospitality ventures in our condensed consolidated statements of income (loss).
Performance and other guarantees—On a quarterly basis, we evaluate the likelihood of funding under a guarantee. To the extent we determine an obligation to fund is both probable and estimable based on performance during the period, we record a separate contingent liability with the offset recognized in other income (loss), net.
Debt repayment guarantees—At inception of the guarantee and on a quarterly basis, we evaluate the risk of funding under a guarantee. We assess credit risk based on the current and forecasted performance of the underlying property, whether the property owner is current on debt service, the historical performance of the
underlying property, and the current market, and we record a separate liability with an offset recognized in other income (loss), net or equity earnings (losses) from unconsolidated hospitality ventures as necessary.
For additional information about guarantees, see Note 13.
Adopted Accounting Standards
Financial InstrumentsCredit Losses—In June 2016, the Financial Accounting Standards Board ("FASB") released ASU 2016-13. ASU 2016-13 replaces the existing impairment model for most financial assets from an incurred loss model to a current expected credit loss model, which requires an entity to recognize allowances for credit losses equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires credit losses relating to AFS debt securities to be recognized through an allowance for credit losses. We adopted ASU 2016-13 on January 1, 2020 utilizing the modified retrospective approach. Upon adoption, we recorded an adjustment of $1 million, net of tax, to opening retained earnings related to our credit loss for accounts receivables, a $12 million increase to our HTM debt securities, and a corresponding $12 million credit loss allowance on our condensed consolidated balance sheets. The adoption of ASU 2016-03 did not materially affect our condensed consolidated statements of income (loss) or our condensed consolidated statements of cash flows, and the adoption adjustments do not reflect the impact of the COVID-19 pandemic, see Note 2.
Future Adoption of Accounting Standards
Reference Rate Reform—In March 2020, the FASB issued Accounting Standards Update No. 2020-04 ("ASU 2020-04"), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions that we can elect to adopt, subject to meeting certain criteria, regarding contract modifications, hedging relationships, and other transactions that reference the London interbank offered rate for deposits of U.S. dollars ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The relief provided in ASU 2020-04 is applicable to all entities, but is only available through December 31, 2022. We are still assessing the impact of adopting ASU 2020-04.
v3.20.2
Revenue from Contracts with Customers
9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregated Revenues
The following tables present our revenues disaggregated by the nature of the product or service:
Three Months Ended September 30, 2020
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$43 $— $— $— $— $(2)$41 
Food and beverage20 — — — — — 20 
Other 19 — — — — — 19 
Owned and leased hotels82 — — — — (2)80 
Base management fees— 12 — (2)19 
Incentive management fees— — — (1)
Franchise fees— 15 — — — — 15 
Other fees— — 
License fees— — — 
Management, franchise, and other fees— 29 17 (3)52 
Amortization of management and franchise agreement assets constituting payments to customers— (5)— (2)— — (7)
Net management, franchise, and other fees— 24 17 (3)45 
Other revenues— — — — 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 234 18 14 — 267 
Total$82 $262 $35 $17 $$(5)$399 
Nine Months Ended September 30, 2020
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$236 $— $— $— $— $(10)$226 
Food and beverage128 — — — — — 128 
Other68 — — — — — 68 
Owned and leased hotels432 — — — — (10)422 
Base management fees— 60 16 10 — (12)74 
Incentive management fees— — (1)12 
Franchise fees— 47 — — — 48 
Other fees— — 16 
License fees— 10 — 11 — 30 
Management, franchise, and other fees— 121 42 17 13 (13)180 
Amortization of management and franchise agreement assets constituting payments to customers— (13)(2)(5)— — (20)
Net management, franchise, and other fees— 108 40 12 13 (13)160 
Other revenues— 33 — — 12 — 45 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 904 62 46 — 1,015 
Total$432 $1,045 $102 $58 $28 $(23)$1,642 
Three Months Ended September 30, 2019
Owned and leased hotels (a)Americas management and franchising (a)ASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and other (a)Eliminations (a)Total
Rooms revenues$263 $— $— $— $— $(11)$252 
Food and beverage 134 — — — — — 134 
Other 44 — — — — — 44 
Owned and leased hotels441 — — — — (11)430 
Base management fees— 56 11 10 — (13)64 
Incentive management fees— 13 17 — (6)33 
Franchise fees— 36 — — — 37 
Other fees— — 
License fees— — — — 
Management, franchise, and other fees— 108 32 21 (19)148 
Amortization of management and franchise agreement assets constituting payments to customers— (4)— (1)— — (5)
Net management, franchise, and other fees— 104 32 20 (19)143 
Other revenues— 16 — — — 25 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 565 30 20 — 617 
Total$441 $685 $62 $40 $17 $(30)$1,215 
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).
Nine Months Ended September 30, 2019
Owned and leased hotels (a)Americas management and franchising (a)ASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and other (a)Eliminations (a)Total
Rooms revenues$821 $— $— $— $— $(27)$794 
Food and beverage461 — — — — — 461 
Other135 — — — — — 135 
Owned and leased hotels1,417 — — — — (27)1,390 
Base management fees— 175 33 27 — (40)195 
Incentive management fees— 46 51 26 — (17)106 
Franchise fees— 104 — — — 107 
Other fees— — 21 
License fees— — — 15 — 18 
Management, franchise, and other fees— 331 96 58 19 (57)447 
Amortization of management and franchise agreement assets constituting payments to customers— (11)(1)(4)— — (16)
Net management, franchise, and other fees— 320 95 54 19 (57)431 
Other revenues— 71 — — 26 98 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 1,688 80 54 — 1,826 
Total$1,417 $2,079 $175 $108 $49 $(83)$3,745 
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).
    Contract Balances
Our contract assets, included in receivables, net on our condensed consolidated balance sheets, were insignificant both at September 30, 2020 and December 31, 2019. As our profitability hurdles are generally calculated on a full-year basis, we expect our contract assets to be insignificant through year end.
Contract liabilities are comprised of the following:
September 30, 2020December 31, 2019
Deferred revenue related to the loyalty program$723 $671 
Advanced deposits38 77 
Initial fees received from franchise owners41 41 
Deferred revenue related to system-wide services
Other deferred revenue80 126 
Total contract liabilities$889 $920 
The following table summarizes the activity in our contract liabilities:
20202019
Beginning balance, January 1$920 $830 
Cash received and other311 490 
Revenue recognized(336)(459)
Ending balance, June 30895 861 
Cash received and other114 265 
Revenue recognized(120)(251)
Ending balance, September 30$889 $875 
Revenue recognized during the three months ended September 30, 2020 and September 30, 2019 included in the contract liabilities balance at the beginning of each year was $57 million and $80 million, respectively. Revenue recognized during the nine months ended September 30, 2020 and September 30, 2019 included in the contract liabilities balance at the beginning of the year was $215 million and $318 million, respectively. This revenue primarily relates to the loyalty program, which is recognized net of redemption reimbursements paid to third parties.
Revenue Allocated to Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted revenue expected to be recognized in future periods was approximately $125 million at September 30, 2020, of which we expect to recognize approximately 10% as revenue over the next 12 months and the remainder thereafter.
We did not estimate revenues expected to be recognized related to our unsatisfied performance obligations for the following:
Deferred revenue related to the loyalty program and revenue from base and incentive management fees as the revenue is allocated to a wholly unperformed performance obligation in a series;
Revenues related to royalty fees as they are considered sales-based royalty fees;
Revenues received for free nights granted through our co-branded credit cards as the awards have an original duration of 12 months; and
Revenues related to advanced bookings at owned and leased hotels as each stay has a duration of 12 months or less.
v3.20.2
Debt and Equity Securities
9 Months Ended
Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Debt and Equity Securities DEBT AND EQUITY SECURITIES
Equity Method Investments
Equity method investments were $260 million and $232 million at September 30, 2020 and December 31, 2019, respectively.
During the nine months ended September 30, 2019, we recognized $8 million of gains in equity losses from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss) resulting from sales activity related to certain equity method investments within our owned and leased hotels segment. During the three and nine months ended September 30, 2019, we received $2 million and $25 million of related sales proceeds, respectively.

During the three and nine months ended September 30, 2019, we recognized $6 million and $7 million of impairment charges, respectively, primarily related to one unconsolidated hospitality venture in equity losses from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss) as the carrying value was in excess of fair value. The fair value was determined to be a Level Three fair value measure, and the impairment was deemed other-than-temporary.
The following table presents summarized financial information for all unconsolidated hospitality ventures in which we hold an investment accounted for under the equity method:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Total revenues$27 $130 $211 $371 
Gross operating profit (loss)(11)51 34 139 
Income (loss) from continuing operations(57)(143)(2)
Net income (loss)(57)(143)(2)
The information above is based on the most recently available financial statements, which are reported on a lag of up to three months for certain of our equity method investments.
Marketable Securities
We hold marketable securities with readily determinable fair values to fund certain operating programs and for investment purposes. We periodically transfer available cash and cash equivalents to purchase marketable securities for investment purposes.
Marketable Securities Held to Fund Operating Programs—Marketable securities held to fund operating programs, which are recorded at fair value and included on our condensed consolidated balance sheets, were as follows:
September 30, 2020December 31, 2019
Loyalty program (Note 9)$556 $483 
Deferred compensation plans held in rabbi trusts (Note 9 and Note 11)464 450 
Captive insurance companies (Note 9)158 180 
Total marketable securities held to fund operating programs1,178 1,113 
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents, short-term investments, and prepaids and other assets(182)(219)
Marketable securities held to fund operating programs included in other assets$996 $894 
Net realized and unrealized gains and interest income from marketable securities held to fund the loyalty program are recognized in other income (loss), net on our condensed consolidated statements of income (loss):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Loyalty program (Note 19)$$$26 $24 
Net realized and unrealized gains (losses) and interest income from marketable securities held to fund rabbi trusts are recognized in net gains and interest income from marketable securities held to fund rabbi trusts on our condensed consolidated statements of income (loss):

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Unrealized gains (losses)$16 $(2)$11 $35 
Realized gains12 
Net gains and interest income from marketable securities held to fund rabbi trusts$22 $— $23 $41 
Our captive insurance companies hold marketable securities which include AFS debt securities that are invested in U.S. government agencies, time deposits, and corporate debt securities and have contractual maturity dates ranging from 2020 through 2025.
Marketable Securities Held for Investment Purposes—Marketable securities held for investment purposes are recorded at cost or fair value, depending on the nature of the investment, and are included on our condensed consolidated balance sheets as follows:
September 30, 2020December 31, 2019
Interest-bearing money market funds (a)$763 $147 
Time deposits (a)288 37 
Common shares of Playa N.V. (Note 9)51 102 
Total marketable securities held for investment purposes1,102 286 
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments(1,051)(184)
Marketable securities held for investment purposes included in other assets$51 $102 
(a) A portion of proceeds from our senior notes issuances during the nine months ended September 30, 2020 were reinvested in interest-bearing money market funds and time deposits at September 30, 2020 (see Note 10).
We hold common shares of Playa Hotels & Resorts N.V. ("Playa N.V.") which are accounted for as an equity security with a readily determinable fair value as we do not have the ability to significantly influence the operations of the entity. The fair value of the common shares is classified as Level One in the fair value hierarchy as we are able to obtain market available pricing information. The remeasurement of our investment at fair value resulted in $7 million and $1 million of unrealized gains for the three months ended September 30, 2020 and September 30, 2019, respectively, and $51 million of unrealized losses and $8 million of unrealized gains for the nine months ended September 30, 2020 and September 30, 2019, respectively, recognized in other income (loss), net on our condensed consolidated statements of income (loss) (see Note 19). We did not sell any shares of common stock during the nine months ended September 30, 2020 or September 30, 2019.
Other Investments
HTM Debt Securities—At September 30, 2020 and December 31, 2019, we held $80 million and $58 million, respectively, of investments in HTM debt securities, net of allowances, which are investments in third-party entities that own or are developing certain of our hotels and are recorded within other assets on our condensed consolidated balance sheets. The securities are mandatorily redeemable between 2021 and 2027. At September 30, 2020, our investments were net of allowances of $20 million. The carrying value of our investments approximates fair value. We estimated the fair value of our investments using internally developed discounted cash flow models based on current market inputs for similar types of arrangements. Based on the lack of available market data, our investments are classified as Level Three within the fair value hierarchy. The primary sensitivity in these models is based on the selection of appropriate discount rates. Fluctuations in these assumptions could result in different estimates of fair value.
Equity Securities Without a Readily Determinable Fair Value—At September 30, 2020 and December 31, 2019, we held $12 million and $7 million of investments in equity securities without a readily determinable fair value, which represent investments in entities where we do not have the ability to significantly influence the operations of the entity.
Fair Value—We measured the following financial assets at fair value on a recurring basis:
September 30, 2020Cash and cash equivalentsShort-term investmentsPrepaids and other assetsOther assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds$920 $920 $— $— $— 
Mutual funds530 — — — 530 
Common shares51 — — — 51 
Level Two - Significant Other Observable Inputs
Commercial paper— — — 
Time deposits294 287 — 
U.S. government obligations204 — — 198 
U.S. government agencies52 — — 50 
Corporate debt securities168 — 15 — 153 
Mortgage-backed securities23 — — — 23 
Asset-backed securities32 — — — 32 
Municipal and provincial notes and bonds— — — 
Total$2,280 $923 $310 $— $1,047 
December 31, 2019Cash and cash equivalentsShort-term investmentsPrepaids and other assetsOther assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds$269 $269 $— $— $— 
Mutual funds502 — — — 502 
Common shares102 — — — 102 
Level Two - Significant Other Observable Inputs
Time deposits47 — 41 — 
U.S. government obligations202 — 31 167 
U.S. government agencies50 — 41 
Corporate debt securities161 — 20 18 123 
Mortgage-backed securities23 — — 19 
Asset-backed securities39 — — 33 
Municipal and provincial notes and bonds— — 
Total$1,399 $269 $68 $66 $996 
During the three and nine months ended September 30, 2020 and September 30, 2019, there were no transfers between levels of the fair value hierarchy. We do not have non-financial assets or non-financial liabilities required to be measured at fair value on a recurring basis.
v3.20.2
Financing Receivables
9 Months Ended
Sep. 30, 2020
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Financing Receivables FINANCING RECEIVABLES
September 30, 2020December 31, 2019
Unsecured financing to hotel owners$143 $135 
Less: current portion of financing receivables, included in receivables, net(1)— 
Less: allowance for losses(110)(100)
Total long-term financing receivables, net of allowances$32 $35 
Allowance for Losses—The following table summarizes the activity in our unsecured financing receivables allowance:
20202019
Allowance at January 1$100 $101 
  Provisions
Write-offs— (4)
Allowance at June 30105 100 
  Provisions
Foreign currency exchange, net— (1)
Allowance at September 30$110 $100