HYATT HOTELS CORP, 10-Q filed on 8/4/2020
Quarterly Report
v3.20.2
Cover Page - shares
6 Months Ended
Jun. 30, 2020
Jul. 31, 2020
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2020  
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 Q2  
Amendment Flag false  
Common Class A    
Document Information    
Entity Common Stock, Shares Outstanding   38,457,392
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 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
REVENUES:        
Total revenues $ 250 $ 1,289 $ 1,243 $ 2,530
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Depreciation and amortization 73 83 153 163
Other direct costs 7 30 41 75
Selling, general, and administrative 101 95 148 223
Direct and selling, general, and administrative expenses 508 1,208 1,496 2,423
Net gains and interest income from marketable securities held to fund rabbi trusts 49 11 1 41
Equity earnings (losses) from unconsolidated hospitality ventures (23) 6 (25) 3
Interest expense (35) (20) (52) (39)
Gains on sales of real estate 0 0 8 1
Asset impairments (49) (1) (52) (4)
Other income (loss), net (14) 28 (95) 79
INCOME (LOSS) BEFORE INCOME TAXES (330) 105 (468) 188
BENEFIT (PROVISION) FOR INCOME TAXES 94 (19) 129 (39)
NET INCOME (LOSS) (236) 86 (339) 149
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (236) $ 86 $ (339) $ 149
EARNINGS (LOSSES) PER SHARE—Basic        
Net income (loss) (in dollars per share) $ (2.33) $ 0.81 $ (3.35) $ 1.41
Net income (loss) attributable to Hyatt Hotels Corporation (in dollars per share) (2.33) 0.81 (3.35) 1.41
EARNINGS (LOSSES) PER SHARE—Diluted        
Net income (loss) (in dollars per share) (2.33) 0.80 (3.35) 1.39
Net income (loss) attributable to Hyatt Hotels Corporation (in dollars per share) $ (2.33) $ 0.80 $ (3.35) $ 1.39
Owned and leased hotels        
REVENUES:        
Total revenues $ 19 $ 490 $ 342 $ 960
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Owned and leased hotels 92 367 364 724
Costs incurred on behalf of managed and franchised properties 92 367 364 724
Management, franchise, and other fees        
REVENUES:        
Total revenues 20 158 128 299
Amortization of management and franchise agreement assets constituting payments to customers        
REVENUES:        
Total revenues (7) (6) (13) (11)
Net management, franchise, and other fees        
REVENUES:        
Total revenues 13 152 115 288
Other revenues        
REVENUES:        
Total revenues 3 28 38 73
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties        
REVENUES:        
Total revenues 215 619 748 1,209
Costs incurred on behalf of managed and franchised properties        
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Owned and leased hotels 235 633 790 1,238
Costs incurred on behalf of managed and franchised properties $ 235 $ 633 $ 790 $ 1,238
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ (236) $ 86 $ (339) $ 149
Other comprehensive income (loss), net of taxes:        
Foreign currency translation adjustments, net of tax expense of $- for the three and six months ended June 30, 2020 and June 30, 2019 19 6 (32) 0
Unrealized losses on derivative activity, net of tax benefit of $- and $(9) for the three and six months ended June 30, 2020 and $(3) and $(4) for the three and six months ended June 30, 2019, respectively (1) (8) (26) (12)
Other comprehensive income (loss) 18 (2) (58) (12)
COMPREHENSIVE INCOME (LOSS) (218) 84 (397) 137
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (218) $ 84 $ (397) $ 137
v3.20.2
Condensed Consolidated Statements of Comprehensive Income (Loss) - Parentheticals - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, net of tax (benefit) $ 0 $ 0 $ 0 $ 0
Unrealized gains on derivative activity, net of tax expense $ 0 $ (3) $ (9) $ (4)
v3.20.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
CURRENT ASSETS:    
Cash and cash equivalents $ 1,438 $ 893
Restricted cash 21 [1] 150
Short-term investments 65 68
Receivables, net of allowances of $38 and $32 at June 30, 2020 and December 31, 2019, respectively 313 421
Inventories 11 12
Prepaids and other assets 53 134
Prepaid income taxes 37 28
Total current assets 1,938 1,706
Equity method investments 259 232
Property and equipment, net 3,237 3,456
Financing receivables, net of allowances of $105 and $100 at June 30, 2020 and December 31, 2019, respectively 33 35
Operating lease right-of-use assets 473 493
Goodwill 288 326
Intangibles, net 418 437
Deferred tax assets 223 144
Other assets 1,711 1,588
TOTAL ASSETS 8,580 8,417
CURRENT LIABILITIES:    
Current maturities of long-term debt 9 11
Accounts payable 93 150
Accrued expenses and other current liabilities 223 304
Current contract liabilities 248 445
Accrued compensation and benefits 97 144
Current operating lease liabilities 31 32
Total current liabilities 701 1,086
Long-term debt 2,491 1,612
Long-term contract liabilities 647 475
Long-term operating lease liabilities 382 393
Other long-term liabilities 866 884
Total liabilities 5,087 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 June 30, 2020 and December 31, 2019 0 0
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 38,114,681 issued and outstanding at June 30, 2020, and Class B common stock, $0.01 par value per share, 395,022,443 shares authorized, 63,028,031 shares issued and outstanding at June 30, 2020. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 36,109,179 issued and outstanding at December 31, 2019, and Class B common stock, $0.01 par value per share, 397,457,686 shares authorized, 65,463,274 1 1
Additional paid-in capital 3 0
Retained earnings 3,753 4,170
Accumulated other comprehensive loss (267) (209)
Total stockholders' equity 3,490 3,962
Noncontrolling interests in consolidated subsidiaries 3 5
Total equity 3,493 3,967
TOTAL LIABILITIES AND EQUITY $ 8,580 $ 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
Jun. 30, 2020
Dec. 31, 2019
Allowance for doubtful accounts receivable, current $ 38 $ 32
Financing receivable, allowance for credit loss $ 105 $ 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) 38,114,681 36,109,179
Common stock, shares, issued (in shares) 38,114,681 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) 395,022,443 397,457,686
Common stock, shares, outstanding (in shares) 63,028,031 65,463,274
Common stock, shares, issued (in shares) 63,028,031 65,463,274
v3.20.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ (339) $ 149
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Gains on sales of real estate (8) (1)
Depreciation and amortization 153 163
Release of contingent consideration liability 0 (27)
Amortization of share awards 20 27
Amortization of operating lease right-of-use assets 16 17
Deferred income taxes (53) 4
Asset impairments 52 4
Equity (earnings) losses from unconsolidated hospitality ventures 25 (3)
Amortization of management and franchise agreement assets constituting payments to customers 13 11
Unrealized (gains) losses, net 44 (20)
Working capital changes and other (253) (145)
Net cash provided by (used in) operating activities (330) 179
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of marketable securities and short-term investments (300) (110)
Proceeds from marketable securities and short-term investments 307 165
Contributions to equity method and other investments (47) (16)
Return of equity method and other investments 2 24
Acquisitions, net of cash acquired 0 (18)
Capital expenditures (88) (146)
Proceeds from sales of real estate, net of cash disposed 78 0
Other investing activities 4 6
Net cash used in investing activities (44) (95)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from debt, net of issuance costs of $10 and $-, respectively 1,290 120
Repayments of debt (401) (42)
Repurchases of common stock (69) (147)
Contingent consideration paid 0 (24)
Dividends paid (20) (40)
Other financing activities (14) (10)
Net cash provided by (used in) financing activities 786 (143)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 4 4
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 416 (55)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR 1,063 622
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD 1,479 567
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Total cash, cash equivalents, and restricted cash 1,479 567
Cash paid during the period for interest 37 41
Cash paid during the period for income taxes 31 34
Cash paid for amounts included in the measurement of operating lease liabilities 22 24
Non-cash investing and financing activities are as follows:    
Non-cash contributions to equity method and other investments (see Note 7, Note 13) 33 5
Change in accrued capital expenditures 4 2
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 7) $ 5 $ 5
v3.20.2
Condensed Consolidated Statements of Cash Flows - Parenthetical - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Statement of Cash Flows [Abstract]    
Debt issuance cost $ 10 $ 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 of accounting changes, net of tax (see Note 3)
Cumulative effect of accounting changes, net of tax (see Note 3)
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) 137                                  
Cash dividends (40)           $ (14)   $ (26)                  
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                        
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)     (7)   (13)                  
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                        
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) (397)                                  
Cash dividends (20)           (7)   (13)                  
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                        
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               2,435,243   (2,435,243)                
Cash dividends 0           $ 0   $ 0                  
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                        
v3.20.2
Condensed Consolidated Statements of Changes in Stockholders' Equity - Parenthetical - $ / shares
3 Months Ended
Mar. 09, 2020
Jun. 10, 2019
Mar. 11, 2019
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]            
Cash dividend (in dollars per share) $ 0.20 $ 0.19 $ 0.19 $ 0.20 $ 0.19 $ 0.19
v3.20.2
Organization
6 Months Ended
Jun. 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 June 30, 2020, (i) we operated or franchised 455 full service hotels, comprising 156,927 rooms throughout the world, (ii) we operated or franchised 476 select service hotels, comprising 68,271 rooms, of which 406 hotels are located in the United States, and (iii) we franchised 8 all-inclusive Hyatt-branded resorts, comprising 3,153 rooms. At June 30, 2020, our portfolio of properties operated in 65 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, and (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.
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
6 Months Ended
Jun. 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 into the second and third quarters. As a result, this interim period, as well as future periods, are unlikely to be comparable to past performance or indicative of 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 at June 30, 2020 for certain reporting units, and we updated our previous cash flow assumptions based on the current demand trends, historical experiences, and our future expectations for these reporting units. Our assumptions are subject to inherent risk and uncertainty due to the restrictive measures imposed by governments and other authorities around the world intended to control the spread of COVID-19, consumer confidence levels, and the ongoing impact of the COVID-19 pandemic on the hospitality industry. Based on our discounted cash flow analyses, the carrying values of the 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 three months ended June 30, 2020. The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss) within the owned and leased hotels segment (see Note 8). We concluded that our indefinite-lived intangible assets are not impaired at June 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. As a result of the current economic environment, 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, we recognized $11 million and $14 million of impairment charges for the three and six months ended June 30, 2020, respectively, of 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 on the underlying operations of the investments to determine whether there were any indications that the decline in value was 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 analysis, during the three and six months ended June 30, 2020, we recognized $10 million and $13 million, respectively, of accounts receivable reserves in selling, general, and administrative expenses on our condensed consolidated statements of income (loss). During the three and six months ended June 30, 2020, we recognized $1 million and $5 million, respectively, of interest income related to certain of our held-to-maturity ("HTM") debt securities and financing receivables, and we also recognized offsetting credit loss allowances in the same periods in other income (loss), net on our condensed consolidated statements of income (loss) (see Notes 5 and 6). During the three and six months ended June 30, 2020, we recognized a $13 million credit loss reserve 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
6 Months Ended
Jun. 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 (losses) 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 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 allowances 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 expense 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 allowance 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 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
6 Months Ended
Jun. 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 June 30, 2020
 
Owned and leased hotels
Americas management and franchising
ASPAC management and franchising
EAME/SW Asia management and franchising
Corporate and other
Eliminations
Total
Rooms revenues
$
8

$

$

$

$

$
(1
)
$
7

Food and beverage
3






3

Other
9






9

Owned and leased hotels
20





(1
)
19

 
 
 
 
 
 
 
 
Base management fees

4

3

1



8

Incentive management fees

(3
)



1

(2
)
Franchise fees

5

1




6

Other fees

1

2

1



4

License fees

1



3


4

Management, franchise, and other fees

8

6

2

3

1

20

Amortization of management and franchise agreement assets constituting payments to customers

(4
)
(1
)
(2
)


(7
)
Net management, franchise, and other fees

4

5


3

1

13

 
 
 
 
 
 
 
 
Other revenues

2



1


3

 
 
 
 
 
 
 
 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties

186

17

12



215

 
 
 
 
 
 
 
 
Total
$
20

$
192

$
22

$
12

$
4

$

$
250

 
Six Months Ended June 30, 2020
 
Owned and leased hotels
Americas management and franchising
ASPAC management and franchising
EAME/SW Asia management and franchising
Corporate and other
Eliminations
Total
Rooms revenues
$
193

$

$

$

$

$
(8
)
$
185

Food and beverage
108






108

Other
49






49

Owned and leased hotels
350





(8
)
342

 
 
 
 
 
 
 
 
Base management fees

48

9

8


(10
)
55

Incentive management fees

1

3

2



6

Franchise fees

32

1




33

Other fees

2

4

2

1


9

License fees

9

8


8


25

Management, franchise, and other fees

92

25

12

9

(10
)
128

Amortization of management and franchise agreement assets constituting payments to customers

(8
)
(2
)
(3
)


(13
)
Net management, franchise, and other fees

84

23

9

9

(10
)
115

 
 
 
 
 
 
 
 
Other revenues

29



9


38

 
 
 
 
 
 
 
 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties

670

44

32

2


748

 
 
 
 
 
 
 
 
Total
$
350

$
783

$
67

$
41

$
20

$
(18
)
$
1,243

 
Three Months Ended June 30, 2019
 
Owned and leased hotels (a)
Americas management and franchising (a)
ASPAC management and franchising
EAME/SW Asia management and franchising
Corporate and other (a)
Eliminations
Total
Rooms revenues
$
285

$

$

$

$

$
(9
)
$
276

Food and beverage
167






167

Other
47






47

Owned and leased hotels
499





(9
)
490

 
 
 
 
 
 
 
 
Base management fees

62

10

9


(13
)
68

Incentive management fees

19

17

9


(6
)
39

Franchise fees

36

2




38

Other fees

1

3

1

2


7

License fees

1



5


6

Management, franchise, and other fees

119

32

19

7

(19
)
158

Amortization of management and franchise agreement assets constituting payments to customers

(3
)
(1
)
(2
)


(6
)
Net management, franchise, and other fees

116

31

17

7

(19
)
152

 
 
 
 
 
 
 
 
Other revenues

19



8

1

28

 
 
 
 
 
 
 
 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties

575

26

17

1


619

 
 
 
 
 
 
 
 
Total
$
499

$
710

$
57

$
34

$
16

$
(27
)
$
1,289

(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).
 
Six Months Ended June 30, 2019
 
Owned and leased hotels (a)
Americas management and franchising (a)
ASPAC management and franchising
EAME/SW Asia management and franchising
Corporate and other (a)
Eliminations
Total
Rooms revenues
$
558

$

$

$

$

$
(16
)
$
542

Food and beverage
327






327

Other
91






91

Owned and leased hotels
976





(16
)
960

 
 
 
 
 
 
 
 
Base management fees

119

22

17


(27
)
131

Incentive management fees

33

34

17


(11
)
73

Franchise fees

68

2




70

Other fees

1

6

3

3


13

License fees

2



10


12

Management, franchise, and other fees

223

64

37

13

(38
)
299

Amortization of management and franchise agreement assets constituting payments to customers

(7
)
(1
)
(3
)


(11
)
Net management, franchise, and other fees

216

63

34

13

(38
)
288

 
 
 
 
 
 
 
 
Other revenues

55



17

1

73

 
 
 
 
 
 
 
 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties

1,123

50

34

2


1,209

 
 
 
 
 
 
 
 
Total
$
976

$
1,394

$
113

$
68

$
32

$
(53
)
$
2,530

(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).

Contract Balances
Our contract assets were insignificant at June 30, 2020 and December 31, 2019. At June 30, 2020, the contract assets were included in receivables, net. As our profitability hurdles are generally calculated on a full-year basis, we expect our contract asset balance to be insignificant through year end.
Contract liabilities are comprised of the following:
 
June 30, 2020
 
December 31, 2019
Deferred revenue related to the loyalty program
$
713

 
$
671

Advanced deposits
42

 
77

Initial fees received from franchise owners
41

 
41

Deferred revenue related to system-wide services
8

 
5

Other deferred revenue
91

 
126

Total contract liabilities
$
895

 
$
920



The following table summarizes the activity in our contract liabilities:
 
2020
 
2019
Beginning balance, January 1
$
920

 
$
830

Cash received and other
246

 
247

Revenue recognized
(262
)
 
(228
)
Ending balance, March 31
$
904

 
$
849

Cash received and other
65

 
243

Revenue recognized
(74
)
 
(231
)
Ending balance, June 30
$
895

 
$
861


Revenue recognized during the three months ended June 30, 2020 and June 30, 2019 included in the contract liabilities balance at the beginning of each year was $21 million and $93 million, respectively. Revenue recognized during the six months ended June 30, 2020 and June 30, 2019 included in the contract liabilities balance at the beginning of the year was $158 million and $238 million, respectively. This revenue primarily relates to the loyalty program, which is recognized net of redemption reimbursements paid to third parties, and advanced deposits.
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 $130 million at June 30, 2020, of which we expect to recognize approximately 15% 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 are required to be redeemed within 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
6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Debt and Equity Securities DEBT AND EQUITY SECURITIES
Equity Method Investments
Equity method investments were $259 million and $232 million at June 30, 2020 and December 31, 2019, respectively.
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 June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Total revenues (a)
$
67

 
$
125

 
$
184

 
$
241

Gross operating profit (a)
11

 
49

 
45

 
88

Loss from continuing operations (a)
(79
)
 
(1
)
 
(86
)
 
(11
)
Net loss (a)
(79
)
 
(1
)
 
(86
)
 
(11
)
(a) 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:
 
June 30, 2020
 
December 31, 2019
Loyalty program (Note 9)
$
545

 
$
483

Deferred compensation plans held in rabbi trusts (Note 9 and Note 11)
453

 
450

Captive insurance companies
168

 
180

Total marketable securities held to fund operating programs
1,166

 
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
(189
)
 
(219
)
Marketable securities held to fund operating programs included in other assets
$
977

 
$
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 June 30,
 
Six Months Ended June 30,
2020
 
2019
 
2020
 
2019
Loyalty program (Note 19)
$
12

 
$
10

 
$
23

 
$
19

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 June 30,
 
Six Months Ended June 30,
2020
 
2019
 
2020
 
2019
Unrealized gains (losses)
$
45

 
$
9

 
$
(5
)
 
$
37

Realized gains
4

 
2

 
6

 
4

Net gains and interest income from marketable securities held to fund rabbi trusts
$
49

 
$
11

 
$
1

 
$
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:
 
June 30, 2020
 
December 31, 2019
Time deposits (a)
$
301

 
$
37

Interest-bearing money market funds (a)
298

 
147

Common shares of Playa N.V. (Note 9)
44

 
102

Total marketable securities held for investment purposes
643

 
286

Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments
(599
)
 
(184
)
Marketable securities held for investment purposes included in other assets
$
44

 
$
102

(a) A portion of proceeds from our bond issuance were reinvested in interest-bearing money market funds and time deposits at June 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 $23 million and $1 million of unrealized gains for the three months ended June 30, 2020 and June 30, 2019, respectively, and $58 million of unrealized losses and $7 million of unrealized gains for the six months ended June 30, 2020 and June 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 six months ended June 30, 2020 or June 30, 2019.
Other Investments
HTM Debt Securities—At June 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 2020 and 2027. At June 30, 2020 our investments were net of allowances of $16 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 June 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:
 
June 30, 2020
 
Cash and cash equivalents
 
Short-term investments
 
Prepaids and other assets
 
Other assets
Level One - Quoted Prices in Active Markets for Identical Assets
 
 
 
 
 
 
 
 
 
Interest-bearing money market funds
$
461

 
$
461

 
$

 
$

 
$

Mutual funds
518

 

 

 

 
518

Common shares
44

 

 

 

 
44

Level Two - Significant Other Observable Inputs
 
 
 
 
 
 
 
 
 
Time deposits
308

 
262

 
41

 

 
5

U.S. government obligations
198

 

 
8

 

 
190

U.S. government agencies
42

 

 

 

 
42

Corporate debt securities
174

 

 
16

 

 
158

Mortgage-backed securities
24

 

 

 

 
24

Asset-backed securities
35

 

 

 

 
35

Municipal and provincial notes and bonds
5

 

 

 

 
5

Total
$
1,809

 
$
723

 
$
65

 
$

 
$
1,021

 
December 31, 2019
 
Cash and cash equivalents
 
Short-term investments
 
Prepaids and other assets
 
Other assets
Level One - Quoted Prices in Active Markets for Identical Assets
 
 
 
 
 
 
 
 
 
Interest-bearing money market funds
$
269

 
$
269

 
$

 
$

 
$

Mutual funds
502

 

 

 

 
502

Common shares
102

 

 

 

 
102

Level Two - Significant Other Observable Inputs
 
 
 
 
 
 
 
 
 
Time deposits
47

 

 
41

 

 
6

U.S. government obligations
202

 

 
4

 
31

 
167

U.S. government agencies
50

 

 
3

 
6

 
41

Corporate debt securities
161

 

 
20

 
18

 
123

Mortgage-backed securities
23

 

 

 
4

 
19

Asset-backed securities
39

 

 

 
6

 
33

Municipal and provincial notes and bonds
4

 

 

 
1

 
3

Total
$
1,399

 
$
269

 
$
68
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