HYATT HOTELS CORP, 10-Q filed on 11/4/2021
Quarterly Report
v3.21.2
Cover Page - shares
9 Months Ended
Sep. 30, 2021
Oct. 29, 2021
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2021  
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, $0.01 par value  
Trading Symbol H  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0001468174  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Common Class A    
Document Information    
Entity Common Stock, Shares Outstanding   50,301,183
Common Class B    
Document Information    
Entity Common Stock, Shares Outstanding   59,653,271
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
REVENUES:        
Total revenues $ 851 $ 399 $ 1,952 $ 1,642
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Depreciation and amortization 71 80 219 233
Other direct costs 31 9 78 50
Selling, general, and administrative 69 69 250 217
Direct and selling, general, and administrative expenses 844 567 2,170 2,063
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts (1) 22 35 23
Equity earnings (losses) from unconsolidated hospitality ventures (12) (20) 8 (45)
Interest expense (40) (35) (123) (87)
Gains on sales of real estate and other 307 0 412 8
Asset impairments 0 0 (2) (52)
Other income (loss), net (3) (19) 34 (114)
INCOME (LOSS) BEFORE INCOME TAXES 258 (220) 146 (688)
BENEFIT (PROVISION) FOR INCOME TAXES (138) 59 (339) 188
NET INCOME (LOSS) 120 (161) (193) (500)
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
Net income (loss) attributable to Hyatt Hotels Corporation $ 120 $ (161) $ (193) $ (500)
EARNINGS (LOSSES) PER SHARE—Basic        
Net income (loss) (in dollars per share) $ 1.17 $ (1.59) $ (1.89) $ (4.93)
Net income loss attributable to Hyatt Hotels Corporation (in dollars per share) 1.17 (1.59) (1.89) (4.93)
EARNINGS (LOSSES) PER SHARE—Diluted        
Net income (loss) (in dollars per share) 1.15 (1.59) (1.89) (4.93)
Net income (loss) attributable to Hyatt Hotels Corporation (in dollars per share) $ 1.15 $ (1.59) $ (1.89) $ (4.93)
Owned and leased hotels        
REVENUES:        
Total revenues $ 263 $ 80 $ 558 $ 422
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Costs of goods and services sold 208 131 506 495
Net management, franchise, and other fees        
REVENUES:        
Total revenues 104 45 243 160
Management, franchise, and other fees        
REVENUES:        
Total revenues 113 52 269 180
Contra revenue        
REVENUES:        
Total revenues (9) (7) (26) (20)
Other revenues        
REVENUES:        
Total revenues 28 7 69 45
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties        
REVENUES:        
Total revenues 456 267 1,082 1,015
Costs incurred on behalf of managed and franchised properties        
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Costs of goods and services sold $ 465 $ 278 $ 1,117 $ 1,068
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 120 $ (161) $ (193) $ (500)
Other comprehensive income (loss), net of taxes:        
Foreign currency translation adjustments, net of tax benefit (provision) of $— for the three and nine months ended September 30, 2021 and $(1) for the three and nine months ended September 30,2020, respectively. (24) 15 (53) (17)
Unrealized gains (losses) on available-for-sale debt securities, net of tax benefit (provision) of $— for the three and nine months ended September 30, 2021 and September 30, 2020 0 0 (1) 0
Unrealized gains (losses) on derivative activity, net of tax benefit (provision) of $— for the three and nine months ended September 30, 2021 and $— and $9 for the three and nine months ended September 30, 2020, respectively. 1 2 5 (24)
Other comprehensive income (loss) (23) 17 (49) (41)
COMPREHENSIVE INCOME (LOSS) 97 (144) (242) (541)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ 97 $ (144) $ (242) $ (541)
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LOSS - Parentheticals - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, tax $ 0 $ (1) $ 0 $ (1)
Unrealized gains (losses) on available-for-sale debt securities, tax 0 0 0 0
Unrealized gains (losses) on derivative activity, tax $ 0 $ 0 $ 0 $ 9
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
CURRENT ASSETS:    
Cash and cash equivalents $ 2,418 $ 1,207
Restricted cash 15 [1] 11
Short-term investments 357 675
Receivables, net of allowances of $58 and $56 at September 30, 2021 and December 31, 2020, respectively 373 316
Inventories 9 9
Prepaids and other assets 59 64
Prepaid income taxes 8 281
Total current assets 3,239 2,563
Equity method investments 249 260
Property and equipment, net 2,876 3,126
Financing receivables, net of allowances of $57 and $114 at September 30, 2021 and December 31, 2020, respectively 31 29
Operating lease right-of-use assets 455 474
Goodwill 288 288
Intangibles, net 363 385
Deferred tax assets 15 207
Other assets 1,961 1,797
TOTAL ASSETS 9,477 9,129
CURRENT LIABILITIES:    
Current maturities of long-term debt 10 260
Accounts payable 109 102
Accrued expenses and other current liabilities 305 200
Current contract liabilities 306 282
Accrued compensation and benefits 116 111
Current operating lease liabilities 30 29
Total current liabilities 876 984
Long-term debt 2,978 2,984
Long-term contract liabilities 666 659
Long-term operating lease liabilities 360 377
Other long-term liabilities 1,008 911
Total liabilities 5,888 5,915
Commitments and contingencies (see Note 12)
EQUITY:    
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding at September 30, 2021 and December 31, 2020 0 0
Common stock, value 1 1
Additional paid-in capital 630 13
Retained earnings 3,196 3,389
Accumulated other comprehensive loss (241) (192)
Total stockholders' equity 3,586 3,211
Noncontrolling interests in consolidated subsidiaries 3 3
Total equity 3,589 3,214
TOTAL LIABILITIES AND EQUITY $ 9,477 $ 9,129
[1] Restricted cash generally represents debt service on bonds, escrow deposits, and other arrangements.
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS - Parentheticals - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Allowance for doubtful accounts receivable, current $ 58 $ 56
Financing receivable, allowance for credit loss $ 57 $ 114
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 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) 50,287,596 39,250,241
Shares, issued (in shares) 50,287,596 39,250,241
Common Class B    
Common stock, par value per share (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 391,647,683 394,033,330
Common stock, shares, outstanding (in shares) 59,653,271 62,038,918
Shares, issued (in shares) 59,653,271 62,038,918
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (193) $ (500)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 219 233
Gains on sales of real estate and other (412) (8)
Amortization of share awards 49 24
Amortization of operating lease right-of-use assets 20 23
Deferred income taxes 210 (59)
Asset impairments 2 52
Equity (earnings) losses from unconsolidated hospitality ventures (8) 45
Contra revenue 26 20
Unrealized (gains) losses, net (20) 36
Working capital changes and other 316 (329)
Net cash provided by (used in) operating activities 209 (463)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of marketable securities and short-term investments (693) (622)
Proceeds from marketable securities and short-term investments 1,002 399
Contributions to equity method and other investments (28) (57)
Return of equity method and other investments 25 5
Acquisitions, net of cash acquired (237) 0
Capital expenditures (65) (104)
Issuance of financing receivables (20) (11)
Proceeds from sales of real estate, net of cash disposed 759 78
Other investing activities (5) (6)
Net cash provided by (used in) investing activities 738 (318)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from debt, net of issuance costs of $— and $15, respectively 0 2,035
Repayments of debt (258) (405)
Repurchases of common stock 0 (69)
Proceeds from issuance of Class A common stock, net of offering costs of $25 and $—, respectively 575 0
Dividends paid 0 (20)
Other financing activities (17) (14)
Net cash provided by financing activities 300 1,527
EFFECT OF EXCHANGE RATE CHANGES ON CASH (3) 1
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 1,244 747
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR 1,237 1,063
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD 2,481 1,810
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash and cash equivalents 2,418 1,778
Restricted cash [1] 15 12
Restricted cash included in other assets [1] 48 20
Total cash, cash equivalents, and restricted cash 2,481 1,810
Cash paid during the period for interest 116 73
Cash paid (received) during the period for income taxes, net (244) 54
Cash paid for amounts included in the measurement of operating lease liabilities 27 32
Non-cash investing and financing activities are as follows:    
Non-cash contributions to equity method and other investments (see Note 6, Note 12) 42 33
Change in accrued capital expenditures 1 (7)
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 6) $ 16 $ 14
[1] Restricted cash generally represents debt service on bonds, escrow deposits, and other arrangements.
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Parenthetical - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Statement of Cash Flows [Abstract]    
Debt issuance cost $ 0 $ 15
Common stock net issuance costs $ 25 $ 0
v3.21.2
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
Balance, beginning of period (in shares) at Dec. 31, 2019               36,109,179   65,463,274
Balance, beginning of period at Dec. 31, 2019 $ 3,966 $ 1   $ 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 3,966 1   4,169 (209) 5        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive income (loss) (541)                  
Cash dividends             $ (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   0              
Share-based payment activity (in shares)               9,506    
Share-based payment activity 4   4              
Class share conversions (in shares)               331,083   (331,083)
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 Dec. 31, 2020               39,250,241   62,038,918
Balance, beginning of period at Dec. 31, 2020 3,214 1 13 3,389 (192) 3        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive income (loss) (349)     (304) (45)          
Employee stock plan issuance (in shares)               10,992    
Employee stock plan issuance 1   1              
Share-based payment activity (in shares)               462,103    
Share-based payment activity 22   22              
Class share conversions (in shares)               800,169   (800,169)
Balance, end of period (in shares) at Mar. 31, 2021               40,523,505   61,238,749
Balance, end of period at Mar. 31, 2021 2,888 1 36 3,085 (237) 3        
Balance, beginning of period (in shares) at Dec. 31, 2020               39,250,241   62,038,918
Balance, beginning of period at Dec. 31, 2020 3,214 1 13 3,389 (192) 3        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive income (loss) (242)                  
Balance, end of period (in shares) at Sep. 30, 2021               50,287,596   59,653,271
Balance, end of period at Sep. 30, 2021 3,589 1 630 3,196 (241) 3        
Balance, beginning of period (in shares) at Mar. 31, 2021               40,523,505   61,238,749
Balance, beginning of period at Mar. 31, 2021 2,888 1 36 3,085 (237) 3        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive income (loss) 10     (9) 19          
Employee stock plan issuance (in shares)               9,603    
Employee stock plan issuance 1   1              
Share-based payment activity (in shares)               11,150    
Share-based payment activity 8   8              
Class share conversions (in shares)               614,831   (614,831)
Directors compensation 2   2              
Balance, end of period (in shares) at Jun. 30, 2021               41,159,089   60,623,918
Balance, end of period at Jun. 30, 2021 2,909 1 47 3,076 (218) 3        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive income (loss) 97     120 (23)          
Employee stock plan issuance (in shares)               12,129    
Share-based payment activity (in shares)               95,731    
Share-based payment activity 8   8              
Class share conversions (in shares)               970,647   (970,647)
Issuance of Class A common stock (in shares)               8,050,000    
Issuance of Class A common stock 575   575              
Balance, end of period (in shares) at Sep. 30, 2021               50,287,596   59,653,271
Balance, end of period at Sep. 30, 2021 $ 3,589 $ 1 $ 630 $ 3,196 $ (241) $ 3        
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - Parenthetical - $ / shares
3 Months Ended
Mar. 09, 2020
Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]    
Cash dividend (in dollars per share) $ 0.20 $ 0.20
v3.21.2
ORGANIZATION
9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION ORGANIZATION
Hyatt Hotels Corporation, a Delaware corporation, and its consolidated subsidiaries (collectively "Hyatt Hotels Corporation") provides hospitality and other services on a worldwide basis through the operation, management, franchising, ownership, development, and licensing of hospitality businesses. We operate, manage, franchise, own, lease, develop, license, or provide services to a portfolio of properties. At September 30, 2021, (i) we operated or franchised 505 full service hotels, comprising 169,567 rooms throughout the world, (ii) we operated or franchised 523 select service hotels, comprising 75,312 rooms, of which 438 hotels are located in the United States, and (iii) our portfolio included 9 franchised all-inclusive Hyatt-branded resorts, comprising 3,591 rooms. At September 30, 2021, our portfolio of properties operated in 69 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 hotels 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 "hotel portfolio" refers to our full service hotels, including our wellness resorts, and our select service hotels, (iii) the terms "properties," "portfolio of properties," or "property portfolio" refer to our hotel portfolio; all-inclusive resorts; and residential, vacation, and condominium ownership units that we operate, manage, franchise, own, lease, develop, license, or to which we provide services or license our trademarks, including under the Park Hyatt, Miraval, Grand Hyatt, Alila, Andaz, The Unbound Collection by Hyatt, Destination by Hyatt, Hyatt Regency, Hyatt, Hyatt Ziva, Hyatt Zilara, Thompson Hotels, Hyatt Centric, Caption by Hyatt, JdV by Hyatt, Hyatt House, Hyatt Place, UrCove, and Hyatt Residences Club brands, and (iv) 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, 2020 (the "2020 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.
Impact of the COVID-19 Pandemic
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 in 2021. 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.
The extent, duration, and magnitude of the COVID-19 pandemic's effects will depend on various factors, all of which are highly uncertain and difficult to predict, including, but not limited to, the impact of the pandemic on global and regional economies, travel, and economic activity; actions taken by governments, businesses, and individuals in response to the pandemic, any additional resurgence, or COVID-19 variants; and the distribution, efficacy, and broad acceptance of COVID-19 vaccines.
We are required to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying Notes. Our estimates and assumptions are subject to inherent risk and uncertainty due to the ongoing impact of the COVID-19 pandemic, and actual results could differ materially from our estimated amounts.
v3.21.2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
9 Months Ended
Sep. 30, 2021
Accounting Policies [Abstract]  
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Future Adoption of Accounting Standards
Reference Rate Reform—In March 2020, the Financial Accounting Standards Board 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 Inter-bank Offered Rate for deposits of U.S. dollars ("LIBOR") or another reference rate expected to be discontinued by June 30, 2023 because of reference rate reform. The provisions of ASU 2020-04 are available through December 31, 2022, and we are currently assessing the impact of adopting ASU 2020-04.
v3.21.2
REVENUE FROM CONTRACTS WITH CUSTOMERS
9 Months Ended
Sep. 30, 2021
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, 2021
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$167 $— $— $— $— $(5)$162 
Food and beverage64 — — — — — 64 
Other 37 — — — — — 37 
Owned and leased hotels268 — — — — (5)263 
Base management fees— 41 10 — (8)50 
Incentive management fees— — (3)10 
Franchise fees— 35 — — — 36 
Other fees— 11 — 17 
Management, franchise, and other fees— 85 16 12 11 (11)113 
Contra revenue— (5)(1)(3)— — (9)
Net management, franchise, and other fees— 80 15 11 (11)104 
Other revenues— 24 — — 28 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 412 26 18 — — 456 
Total$268 $516 $41 $27 $14 $(15)$851 
Nine Months Ended September 30, 2021
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$346 $— $— $— $— $(11)$335 
Food and beverage127 — — — — — 127 
Other96 — — — — — 96 
Owned and leased hotels569 — — — — (11)558 
Base management fees— 87 27 13 — (17)110 
Incentive management fees— 11 15 — (4)30 
Franchise fees— 80 — — 82 
Other fees— 11 25 — 47 
Management, franchise, and other fees— 189 51 25 25 (21)269 
Contra revenue— (14)(3)(9)— — (26)
Net management, franchise, and other fees— 175 48 16 25 (21)243 
Other revenues— 60 — — 69 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 966 70 46 — — 1,082 
Total$569 $1,201 $118 $62 $33 $(31)$1,952 
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 beverage 20 — — — — — 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— — 12 
Management, franchise, and other fees— 29 17 (3)52 
Contra revenue— (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 hotels Americas management and franchising ASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminations Total
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— 13 17 13 — 46 
Management, franchise, and other fees— 121 42 17 13 (13)180 
Contra revenue— (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 

Contract Balances
Our contract assets, included in receivables, net on our condensed consolidated balance sheets, were insignificant at both September 30, 2021 and December 31, 2020. 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 were comprised of the following:
September 30, 2021December 31, 2020
Deferred revenue related to the loyalty program$792 $733 
Advanced deposits59 44 
Initial fees received from franchise owners42 41 
Deferred revenue related to insurance programs47 
Other deferred revenue75 76 
Total contract liabilities$972 $941 
The following table summarizes the activity in our contract liabilities:
20212020
Beginning balance, January 1$941 $920 
Cash received and other238 311 
Revenue recognized(201)(336)
Ending balance, June 30$978 $895 
Cash received and other152 114 
Revenue recognized(158)(120)
Ending balance, September 30$972 $889 
Revenue recognized during the three months ended September 30, 2021 and September 30, 2020 included in the contract liabilities balance at the beginning of each year was $83 million and $57 million, respectively. Revenue recognized during the nine months ended September 30, 2021 and September 30, 2020 included in the contract liabilities balance at the beginning of the year was $230 million and $215 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 $110 million at September 30, 2021, of which we expect to recognize approximately 15% of the revenue over the next 12 months and the remainder thereafter.
v3.21.2
DEBT AND EQUITY SECURITIES
9 Months Ended
Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]  
DEBT AND EQUITY SECURITIES DEBT AND EQUITY SECURITIES
Equity Method Investments
Equity method investments were $249 million and $260 million at September 30, 2021 and December 31, 2020, 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 September 30,Nine Months Ended September 30,
 2021202020212020
Total revenues$89 $27 $171 $211 
Gross operating profit (loss)36 (11)31 34 
Loss from continuing operations(5)(57)(91)(143)
Net loss(5)(57)(91)(143)
During the nine months ended September 30, 2021, we received $17 million of proceeds related to sales activity of certain equity method investments and recognized an insignificant net loss in equity earnings (losses) from unconsolidated hospitality ventures within the owned and leased hotels segment on our condensed consolidated statements of income (loss).
During the nine months ended September 30, 2021, we purchased our partner's interest in the entities that own Grand Hyatt São Paulo for $6 million of cash, and we repaid the $78 million third-party mortgage loan on the property. We recognized a $69 million pre-tax gain in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss) (see Note 6).
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 on our condensed consolidated balance sheets, were as follows:
September 30, 2021December 31, 2020
Loyalty program (Note 8)
$584 $567 
Deferred compensation plans held in rabbi trusts (Note 8 and Note 10)
543 511 
Captive insurance company (Note 8)
184 226 
Total marketable securities held to fund operating programs$1,311 $1,304 
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents and short-term investments(192)(238)
Marketable securities held to fund operating programs included in other assets$1,119 $1,066 
Marketable securities held to fund operating programs included $128 million and $82 million of available-for-sale ("AFS") debt securities at September 30, 2021 and December 31, 2020, respectively, with contractual maturity dates ranging from 2021 through 2069. The fair value of our AFS debt securities approximates amortized cost. Additionally, marketable securities held to fund operating programs include $88 million and $70 million of equity securities with a readily determinable fair value at September 30, 2021 and December 31, 2020, respectively.
Net unrealized and realized gains (losses) from marketable securities held to fund operating programs recognized on our condensed consolidated financial statements were as follows:
v3.21.2
RECEIVABLES
9 Months Ended
Sep. 30, 2021
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
RECEIVABLES RECEIVABLES        
Receivables
At September 30, 2021 and December 31, 2020, we had $373 million and $316 million of net receivables, respectively, on our condensed consolidated balance sheets.
The following table summarizes the activity in our receivables allowance:
20212020
Allowance at January 1$56 $34 
Provisions14 
Other (3)(10)
Allowance at June 30$58 $38 
Provisions
Other(1)
Allowance at September 30$58 $46 
                                            
Financing Receivables
September 30, 2021December 31, 2020
Unsecured financing to hotel owners$96 $145 
Less: current portion of financing receivables, included in receivables, net(8)(2)
Less: allowance for credit losses(57)(114)
Total long-term financing receivables, net of allowances$31 $29 
Allowance for Credit Losses—The following table summarizes the activity in our unsecured financing receivables allowance:
20212020
Allowance at January 1$114 $100 
Provisions
Allowance at June 30$120 $105 
   Write offs (1)(60)— 
   Provisions— 
   Foreign currency exchange, net(3)— 
Allowance at September 30$57 $110 
(1) The amount written off relates to a financing arrangement with a hotel owner, which was legally waived during the three months ended September 30, 2021.
Credit Monitoring—Our unsecured financing receivables were as follows:
September 30, 2021
 Gross loan balance (principal and interest)Related allowanceNet financing receivablesGross receivables on nonaccrual status
Loans$92 $(54)$38 $46 
Other financing arrangements(3)— 
Total unsecured financing receivables$96 $(57)$39 $46 
December 31, 2020
 Gross loan balance (principal and interest)Related allowanceNet financing receivablesGross receivables on nonaccrual status
Loans$83 $(54)$29 $53 
Other financing arrangements62 (60)58 
Total unsecured financing receivables$145 $(114)$31 $111 
Fair Value—We estimated the fair value of financing receivables to be approximately $62 million and $44 million at September 30, 2021 and December 31, 2020, respectively. The fair values, which are classified as Level Three in the fair value hierarchy, are estimated using discounted future cash flow models. The principal inputs used are projected future cash flows and the discount rate, which is generally the effective interest rate of the loan.
v3.21.2
ACQUISITIONS AND DISPOSITIONS
9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS AND DISPOSITIONS ACQUISITIONS AND DISPOSITIONS
Acquisitions
Land—During the three months ended September 30, 2021, we acquired $7 million of land through an asset acquisition from an unrelated third party to develop a hotel in Tempe, Arizona.
Alila Ventana Big Sur—During the nine months ended September 30, 2021, we completed an asset acquisition of Alila Ventana Big Sur for $146 million, net of closing costs and proration adjustments, which primarily consisted of $149 million of property and equipment. The seller is indirectly owned by a limited partnership affiliated with the brother of our Executive Chairman. The acquisition was identified as replacement property in a potential reverse like-kind exchange; however, we sold the property before a suitable replacement property was identified.
During the three months ended September 30, 2021, we sold the property to an unrelated third party for approximately $148 million, net of closing costs and proration adjustments, and accounted for the transaction as an asset disposition. Upon sale, we entered into a long-term management agreement for the property. The sale resulted in a $2 million pre-tax gain, which was recognized in gains on sales of real estate and other on our condensed consolidated statements of income (loss) during the three months ended September 30, 2021. The operating results and financial position of this hotel during our period of ownership remain within our owned and leased hotels segment.
Grand Hyatt São Paulo—We previously held a 50% interest in the entities that own Grand Hyatt São Paulo, and we accounted for the investment as an unconsolidated hospitality venture under the equity method. During the nine months ended September 30, 2021, we purchased the remaining 50% interest for $6 million of cash. Additionally, we repaid the $78 million third-party mortgage loan on the property, and we were released from our debt repayment guarantee (see Note 12). The transaction was accounted for as an asset acquisition, and we recognized a $69 million pre-tax gain related to the transaction in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss). The pre-tax gain is primarily attributable to a $42 million reversal of other long-term liabilities associated with our equity method investment and a $22 million reclassification from accumulated other comprehensive loss (see Note 13).
Net assets acquired were determined as follows:
Cash paid$
Repayment of third-party mortgage loan78 
Fair value of our previously-held equity method investment
Net assets acquired$90 
Upon acquisition, we recorded $101 million of property and equipment and $11 million of deferred tax liabilities within our owned and leased hotels segment on our condensed consolidated balance sheet.
Dispositions
Hyatt Regency Lake Tahoe Resort, Spa and Casino—During the three months ended September 30, 2021, we sold Hyatt Regency Lake Tahoe Resort, Spa and Casino to an unrelated third party for approximately $343 million, net of closing costs and proration adjustments, and accounted for the transaction as an asset disposition. Upon sale, we entered into a long-term management agreement for the property. The sale resulted in a $305 million pre-tax gain, which was recognized in gains on sales of real estate and other on our condensed consolidated statements of income (loss) during the three months ended September 30, 2021. The operating results and financial position of this hotel prior to the sale remain within our owned and leased hotels segment.
Hyatt Regency Lost Pines Resort and Spa—During the nine months ended September 30, 2021, we sold Hyatt Regency Lost Pines Resort and Spa to an unrelated third party for approximately $268 million, net of closing costs and proration adjustments, and accounted for the transaction as an asset disposition. Upon sale, we entered into a long-term management agreement for the property. The sale resulted in a $104 million pre-tax gain, which was recognized in gains on sales of real estate and other on our condensed consolidated statements of income (loss) during the nine months ended September 30, 2021. The operating results and financial position of this hotel prior to the sale remain within our owned and leased hotels segment.
Hyatt Centric Center City Philadelphia—During the nine months ended September 30, 2020, an unrelated third party invested in certain of our subsidiaries that developed Hyatt Centric Center City Philadelphia and adjacent parking and retail space in exchange for a 58% ownership interest, resulting in the derecognition of the nonfinancial assets of the subsidiaries. As a result of the transaction, we received $72 million of proceeds, recorded our 42% ownership interest as an equity method investment, and recognized a $4 million pre-tax gain in gains on sales of real estate and other on our condensed consolidated statements of income (loss) during the nine months ended September 30, 2020. Our $22 million equity method investment was recorded at fair value based on the value contributed by our partner to the unconsolidated hospitality venture. As additional consideration, we received a $5 million investment in an equity security without a readily determinable fair value.
Building—During the nine months ended September 30, 2020, we sold a commercial building in Omaha, Nebraska for $6 million, net of closing costs and proration adjustments. In conjunction with the sale, we entered into a lease for a portion of the building and accounted for the transaction as a sale and leaseback and recorded a $4 million operating lease right-of-use asset and related lease liability on our condensed consolidated balance sheet. The sale resulted in a $4 million pre-tax gain, which was recognized in gains on sales of real estate and other on our condensed consolidated statements of income (loss) during the nine months ended September 30, 2020. At September 30, 2020, the operating lease had a weighted-average remaining term of 9 years and a weighted-average discount rate of 3.25%. The lease includes an option to extend the lease term by 5 years.
Like-Kind Exchange Agreements
Periodically, we enter into like-kind exchange agreements upon the disposition or acquisition of certain properties. Pursuant to the terms of these agreements, the proceeds from the sales are placed into an escrow account administered by a qualified intermediary and are unavailable for our use until released. The proceeds are recorded as restricted cash on our condensed consolidated balance sheets and released (i) if they are utilized as part of a like-kind exchange agreement, (ii) if we do not identify a suitable replacement property within 45 days after the agreement date, or (iii) when a like-kind exchange agreement is not completed within the remaining allowable time period.
v3.21.2
GOODWILL AND INTANGIBLES, NET
9 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLES, NET GOODWILL AND INTANGIBLES, NET
At both September 30, 2021 and December 31, 2020, we had $288 million of goodwill on our condensed consolidated balance sheets. During the nine months ended September 30, 2020, we determined that the carrying values of two reporting units were in excess of the fair values, which were Level Three fair value measurements, and we recognized $38 million of goodwill impairment charges in asset impairments on our condensed consolidated statements of income (loss) within our owned and leased hotels segment.
September 30, 2021Weighted-
average useful
lives in years
December 31, 2020
Management and franchise agreement intangibles$349 18$354 
Brand and other indefinite-lived intangibles130 — 130 
Advanced booking intangibles3
Other definite-lived intangibles6
Intangibles493 498 
Less: accumulated amortization(130)(113)
Intangibles, net$363 $385 

 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Amortization expense$$$20 $21 
v3.21.2
OTHER ASSETS
9 Months Ended
Sep. 30, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
OTHER ASSETS OTHER ASSETS
September 30, 2021December 31, 2020
Marketable securities held to fund rabbi trusts (Note 4)$543 $511 
Management and franchise agreement assets constituting payments to customers (1) 538 470 
Marketable securities held to fund the loyalty program (Note 4)436 441 
Marketable securities held for captive insurance company (Note 4)140 114 
Common shares in Playa N.V. (Note 4)100 72 
Long-term investments (Note 4)74 93 
Other130 96 
Total other assets$1,961 $1,797 
(1) Includes cash consideration as well as other forms of consideration provided, such as debt repayment or performance guarantees.
v3.21.2
DEBT
9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
DEBT DEBT
Long-term debt was $2,978 million and $2,984 million at September 30, 2021 and December 31, 2020, respectively.
Senior Notes—During the three months ended September 30, 2020, we issued $750 million of three-month LIBOR plus 3.000% senior notes due 2022 (the "2022 Notes") at par with interest payable quarterly on March 1, June 1, September 1, and December 1 of each year. We received approximately $745 million of net proceeds from the sale, after deducting $5 million of underwriting discounts and other offering expenses, which we used for general corporate purposes. At September 30, 2021, the 2022 Notes were classified as long-term on our condensed consolidated balance sheet as the debt was refinanced in October 2021 (see Note 19).
During the nine months ended September 30, 2020, we issued $450 million of 5.375% senior notes due 2025 (the "2025 Notes") and $450 million of 5.750% senior notes due 2030 (the "2030 Notes") at par. We received approximately $890 million of net proceeds from the sale, after deducting $10 million of underwriting discounts and other offering expenses. We used a portion of the proceeds from these issuances to repay all outstanding borrowings on our revolving credit facility and settle the outstanding interest rate locks, and the remainder was used for general corporate purposes. Interest is payable semi-annually on April 23 and October 23 of each year.
Debt Repayment—During the three months ended September 30, 2021, we repaid the outstanding $250 million of 5.375% senior notes due 2021 (the "2021 Notes") at maturity for approximately $257 million, inclusive of $7 million of accrued interest.
Revolving Credit Facility—During the three months ended September 30, 2021, we entered into a Fourth Amendment to Second Amended and Restated Credit Agreement (the "Fourth Revolver Amendment"). The Fourth Revolver Amendment, among other things, (i) modified the negative investments covenant to permit the acquisition of Apple Leisure Group ("ALG") (see Note 19), (ii) incorporated certain metrics consistent with ALG's covenants, (iii) amended certain negative covenants to permit certain existing transactions by ALG, and (iv) included a post-closing covenant requiring certain ALG entities to become guarantors under the revolving credit facility, subject to certain conditions. The effectiveness of the Fourth Revolver Amendment, including the amendments described herein, was subject in all respects to the substantially concurrent consummation of the acquisition of ALG.
During the nine months ended September 30, 2021, we entered into a Third Amendment to Second Amended and Restated Credit Agreement (the "Third Revolver Amendment"). The Third Revolver Amendment, among other things, (i) extended the current covenant relief period through January 1, 2022 (the "Covenant Relief Period"), (ii) added a new minimum fixed charge coverage ratio covenant applicable to the first quarter of 2022, and (iii) increased the maintenance level of the leverage ratio covenant for the second, third, fourth, and fifth quarters following the end of the Covenant Relief Period. The Third Revolver Amendment also included an option, at our election, to extend the maturity date of $1.45 billion of revolving credit commitments by one year on the terms specified in the Third Revolver Amendment. The terms of the Third Revolver Amendment restrict, among other things, our ability to repurchase shares and pay dividends until the first quarter of 2022.
The $1.5 billion aggregate commitment amount under our revolving credit facility remains unchanged under the Fourth Revolver Amendment and Third Revolver Amendment.
During the nine months ended September 30, 2021 and September 30, 2020, we had $0 and $400 million, respectively, of borrowings and repayments on our revolving credit facility. The weighted-average interest rate on these borrowings was 1.71% at September 30, 2020. At both September 30, 2021 and December 31, 2020, we had no balance outstanding. At September 30, 2021, we had $1.5 billion of borrowing capacity available under our revolving credit facility.
Fair Value—We estimate the fair value of debt, which consists of the 2022 Notes, 2025 Notes, 2030 Notes, and the notes below (collectively, the "Senior Notes"), bonds, and other long-term debt.
$350 million of 3.375% senior notes due 2023 (the "2023 Notes")
$400 million of 4.850% senior notes due 2026 (the "2026 Notes")
$400 million of 4.375% senior notes due 2028 (the "2028 Notes")
Our Senior Notes and bonds are classified as Level Two due to the use and weighting of multiple market inputs in the final price of the security. We estimated the fair value of other debt instruments using a discounted cash flow analysis based on current market inputs for similar types of arrangements. Based on the lack of available market data, we have classified our revolving credit facility and other debt instruments as Level Three. The primary sensitivity in these models is based on the selection of appropriate discount rates. Fluctuations in our assumptions will result in different estimates of fair value.
September 30, 2021
Carrying valueFair valueQuoted prices in active markets for identical assets (Level One)Significant other observable inputs (Level Two)Significant unobservable inputs (Level Three)
Debt (1)$3,002 $3,252 $— $3,214 $38