HYATT HOTELS CORP, 10-Q filed on 8/4/2021
Quarterly Report
v3.21.2
Cover Page - shares
6 Months Ended
Jun. 30, 2021
Jul. 30, 2021
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 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, $0.01 par value  
Trading Symbol H  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0001468174  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Common Class A    
Document Information    
Entity Common Stock, Shares Outstanding   41,172,573
Common Class B    
Document Information    
Entity Common Stock, Shares Outstanding   60,623,918
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
REVENUES:        
Total revenues $ 663 $ 250 $ 1,101 $ 1,243
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Depreciation and amortization 74 73 148 153
Other direct costs 24 7 47 41
Selling, general, and administrative 86 101 181 148
Direct and selling, general, and administrative expenses 733 508 1,326 1,496
Net gains and interest income from marketable securities held to fund rabbi trusts 24 49 36 1
Equity earnings (losses) from unconsolidated hospitality ventures (34) (23) 20 (25)
Interest expense (42) (35) (83) (52)
Gains on sales of real estate and other 105 0 105 8
Asset impairments (2) (49) (2) (52)
Other income (loss), net 25 (14) 37 (95)
INCOME (LOSS) BEFORE INCOME TAXES 6 (330) (112) (468)
BENEFIT (PROVISION) FOR INCOME TAXES (15) 94 (201) 129
NET LOSS (9) (236) (313) (339)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
NET LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (9) $ (236) $ (313) $ (339)
LOSSES PER SHARE—Basic        
Net loss (in dollars per share) $ (0.08) $ (2.33) $ (3.07) $ (3.35)
Net income loss attributable to Hyatt Hotels Corporation (in dollars per share) (0.08) (2.33) (3.07) (3.35)
LOSSES PER SHARE—Diluted        
Net loss (in dollars per share) (0.08) (2.33) (3.07) (3.35)
Net loss attributable to Hyatt Hotels Corporation (in dollars per share) $ (0.08) $ (2.33) $ (3.07) $ (3.35)
Owned and leased hotels        
REVENUES:        
Total revenues $ 191 $ 19 $ 295 $ 342
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Costs of goods and services sold 174 92 298 364
Management, franchise, and other fees        
REVENUES:        
Total revenues 93 20 156 128
Contra revenue        
REVENUES:        
Total revenues (9) (7) (17) (13)
Net management, franchise, and other fees        
REVENUES:        
Total revenues 84 13 139 115
Other revenues        
REVENUES:        
Total revenues 22 3 41 38
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties        
REVENUES:        
Total revenues 366 215 626 748
Costs incurred on behalf of managed and franchised properties        
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:        
Costs of goods and services sold $ 375 $ 235 $ 652 $ 790
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net loss $ (9) $ (236) $ (313) $ (339)
Other comprehensive income (loss), net of taxes:        
Foreign currency translation adjustments, net of tax benefit (provision) of $— for the three and six months ended June 30, 2021 and June 30,2020 17 19 (29) (32)
Unrealized gains (losses) on available-for-sale debt securities, net of tax benefit (provision) of $— for the three and six months ended June 30, 2021 and June 30, 2020 0 0 (1) 0
Unrealized gains (losses) on derivative activity, net of tax benefit (provision) of $— for the three and six months ended June 30, 2021 and $— and $(9) for the three and six months ended June 30, 2020 2 (1) 4 (26)
Other comprehensive income (loss) 19 18 (26) (58)
COMPREHENSIVE INCOME (LOSS) 10 (218) (339) (397)
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ 10 $ (218) $ (339) $ (397)
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME LOSS - Parentheticals - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Foreign currency translation adjustments, tax $ 0 $ 0 $ 0 $ 0
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
Jun. 30, 2021
Dec. 31, 2020
CURRENT ASSETS:    
Cash and cash equivalents $ 1,144 $ 1,207
Restricted cash 18 [1] 11
Short-term investments 593 675
Receivables, net of allowances of $58 and $56 at June 30, 2021 and December 31, 2020, respectively 360 316
Inventories 9 9
Prepaids and other assets 64 64
Prepaid income taxes 286 281
Total current assets 2,474 2,563
Equity method investments 262 260
Property and equipment, net 3,121 3,126
Financing receivables, net of allowances of $120 and $114 at June 30, 2021 and December 31, 2020, respectively 26 29
Operating lease right-of-use assets 465 474
Goodwill 288 288
Intangibles, net 369 385
Deferred tax assets 16 207
Other assets 1,941 1,797
TOTAL ASSETS 8,962 9,129
CURRENT LIABILITIES:    
Current maturities of long-term debt 260 260
Accounts payable 110 102
Accrued expenses and other current liabilities 198 200
Current contract liabilities 311 282
Accrued compensation and benefits 108 111
Current operating lease liabilities 30 29
Total current liabilities 1,017 984
Long-term debt 2,986 2,984
Long-term contract liabilities 667 659
Long-term operating lease liabilities 367 377
Other long-term liabilities 1,016 911
Total liabilities 6,053 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 as of June 30, 2021 and December 31, 2020 0 0
Common stock, value 1 1
Additional paid-in capital 47 13
Retained earnings 3,076 3,389
Accumulated other comprehensive loss (218) (192)
Total stockholders' equity 2,906 3,211
Noncontrolling interests in consolidated subsidiaries 3 3
Total equity 2,909 3,214
TOTAL LIABILITIES AND EQUITY $ 8,962 $ 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
Jun. 30, 2021
Dec. 31, 2020
Allowance for doubtful accounts receivable, current $ 58 $ 56
Financing receivable, allowance for credit loss $ 120 $ 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) 41,159,089 39,250,241
Common stock, shares, issued (in shares) 41,159,089 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) 392,618,330 394,033,330
Common stock, shares, outstanding (in shares) 60,623,918 62,038,918
Common stock, shares, issued (in shares) 60,623,918 62,038,918
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (313) $ (339)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 148 153
Gains on sales of real estate and other (105) (8)
Amortization of share awards 41 20
Amortization of operating lease right-of-use assets 14 16
Deferred income taxes 203 (53)
Asset impairments 2 52
Equity (earnings) losses from unconsolidated hospitality ventures (20) 25
Contra revenue 17 13
Unrealized (gains) losses, net (13) 44
Working capital changes and other (32) (253)
Net cash used in operating activities (58) (330)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of marketable securities and short-term investments (603) (300)
Proceeds from marketable securities and short-term investments 663 307
Contributions to equity method and other investments (24) (47)
Return of equity method and other investments 25 2
Acquisitions, net of cash acquired (230) 0
Capital expenditures (37) (88)
Issuance of financing receivables (8) (1)
Proceeds from sales of real estate, net of cash disposed 268 78
Other investing activities (7) 5
Net cash provided by (used in) investing activities 47 (44)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from debt, net of issuance costs of $— and $10, respectively 0 1,290
Repayments of debt (2) (401)
Repurchases of common stock 0 (69)
Dividends paid 0 (20)
Other financing activities (14) (14)
Net cash provided by (used in) financing activities (16) 786
EFFECT OF EXCHANGE RATE CHANGES ON CASH (7) 4
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (34) 416
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR 1,237 1,063
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD 1,203 1,479
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash and cash equivalents 1,144 1,438
Restricted cash [1] 18 21
Restricted cash included in other assets [1] 41 20
Total cash, cash equivalents, and restricted cash 1,203 1,479
Cash paid during the period for interest 74 37
Cash paid during the period for income taxes, net 2 31
Cash paid for amounts included in the measurement of operating lease liabilities 18 22
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 4
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 6) $ 12 $ 5
[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
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Statement of Cash Flows [Abstract]    
Debt issuance cost $ 0 $ 10
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 $ 0 $ 4,169 $ (209) $ 5        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive 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 0 4,169 (209) 5        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Total comprehensive loss (397)                  
Cash dividends             $ (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 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        
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 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 loss (339)                  
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        
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 loss 10     (9) 19          
Directors compensation 2   2              
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                  
Class share conversions (in shares)               614,831   (614,831)
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        
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
6 Months Ended
Jun. 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 June 30, 2021, (i) we operated or franchised 493 full service hotels, comprising 166,576 rooms throughout the world, (ii) we operated or franchised 519 select service hotels, comprising 74,827 rooms, of which 437 hotels are located in the United States, and (iii) our portfolio included 8 franchised all-inclusive Hyatt-branded resorts, comprising 3,153 rooms. At June 30, 2021, our portfolio of properties operated in 68 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 "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, tommie, 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 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
6 Months Ended
Jun. 30, 2021
Accounting Policies [Abstract]  
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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
6 Months Ended
Jun. 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 June 30, 2021
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$117 $— $— $— $— $(3)$114 
Food and beverage43 — — — — — 43 
Other 34 — — — — — 34 
Owned and leased hotels194 — — — — (3)191 
Base management fees— 30 — (6)36 
Incentive management fees— — (1)12 
Franchise fees— 28 — — — 29 
Other fees— — — 16 
Management, franchise, and other fees— 66 20 (7)93 
Contra revenue— (5)(1)(3)— — (9)
Net management, franchise, and other fees— 61 19 (7)84 
Other revenues— 19 — — — 22 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 327 24 15 — — 366 
Total$194 $407 $43 $18 $11 $(10)$663 
Six Months Ended June 30, 2021
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$179 $— $— $— $— $(6)$173 
Food and beverage63 — — — — — 63 
Other59 — — — — — 59 
Owned and leased hotels301 — — — — (6)295 
Base management fees— 46 17 — (9)60 
Incentive management fees— 11 — (1)20 
Franchise fees— 45 — — — 46 
Other fees— 14 — 30 
Management, franchise, and other fees— 104 35 13 14 (10)156 
Contra revenue— (9)(2)(6)— — (17)
Net management, franchise, and other fees— 95 33 14 (10)139 
Other revenues— 36 — — — 41 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 554 44 28 — — 626 
Total$301 $685 $77 $35 $19 $(16)$1,101 
Three Months Ended June 30, 2020
Owned and leased hotelsAmericas management and franchisingASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminationsTotal
Rooms revenues$$— $— $— $— $(1)$
Food and beverage — — — — — 
Other — — — — — 
Owned and leased hotels20 — — — — (1)19 
Base management fees— — — 
Incentive management fees— (3)— — — (2)
Franchise fees— — — — 
Other fees— — 
Management, franchise, and other fees— 20 
Contra revenue— (4)(1)(2)— — (7)
Net management, franchise, and other fees— — 13 
Other revenues— — — — 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 186 17 12 — — 215 
Total$20 $192 $22 $12 $$— $250 
Six Months Ended June 30, 2020
Owned and leased hotels Americas management and franchising ASPAC management and franchisingEAME/SW Asia management and franchisingCorporate and otherEliminations Total
Rooms revenues$193 $— $— $— $— $(8)$185 
Food and beverage108 — — — — — 108 
Other49 — — — — — 49 
Owned and leased hotels350 — — — — (8)342 
Base management fees— 48 — (10)55 
Incentive management fees— — — 
Franchise fees— 32 — — — 33 
Other fees— 11 12 — 34 
Management, franchise, and other fees— 92 25 12 (10)128 
Contra revenue— (8)(2)(3)— — (13)
Net management, franchise, and other fees— 84 23 (10)115 
Other revenues— 29 — — — 38 
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties— 670 44 32 — 748 
Total$350 $783 $67 $41 $20 $(18)$1,243 

Contract Balances
Our contract assets, included in receivables, net on our condensed consolidated balance sheets, were $1 million and insignificant at June 30, 2021 and December 31, 2020, respectively. As our profitability hurdles are generally calculated on a full-year basis, we expect our contract assets to be insignificant at year end.
Contract liabilities were comprised of the following:
June 30, 2021December 31, 2020
Deferred revenue related to the loyalty program$774 $733 
Advanced deposits68 44 
Initial fees received from franchise owners41 41 
Deferred revenue related to insurance programs17 47 
Other deferred revenue78 76 
Total contract liabilities$978 $941 
The following table summarizes the activity in our contract liabilities:
20212020
Beginning balance, January 1$941 $920 
Cash received and other105 246 
Revenue recognized(86)(262)
Ending balance, March 31$960 $904 
Cash received and other133 65 
Revenue recognized(115)(74)
Ending balance, June 30$978 $895 
Revenue recognized during the three months ended June 30, 2021 and June 30, 2020 included in the contract liabilities balance at the beginning of each year was $78 million and $21 million, respectively. Revenue recognized during the six months ended June 30, 2021 and June 30, 2020 included in the contract liabilities balance at the beginning of the year was $147 million and $158 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 $120 million at June 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
6 Months Ended
Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract]  
DEBT AND EQUITY SECURITIES DEBT AND EQUITY SECURITIES
Equity Method Investments
Equity method investments were $262 million and $260 million at June 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 June 30,Six Months Ended June 30,
 2021202020212020
Total revenues$51 $67 $82 $184 
Gross operating profit (loss)11 (5)45 
Loss from continuing operations(43)(79)(86)(86)
Net loss(43)(79)(86)(86)
During the three and six months ended June 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 six months ended June 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:
June 30, 2021December 31, 2020
Loyalty program (Note 8)
$582 $567 
Deferred compensation plans held in rabbi trusts (Note 8 and Note 10)
555 511 
Captive insurance company (Note 8)
200 226 
Total marketable securities held to fund operating programs$1,337 $1,304 
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents and short-term investments(203)(238)
Marketable securities held to fund operating programs included in other assets$1,134 $1,066 
Marketable securities held to fund operating programs include $118 million and $82 million of available-for-sale ("AFS") debt securities at June 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 $87 million and $70 million of equity securities with a readily determinable fair value at June 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:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Unrealized gains (losses), net
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts$20 $45 $23 $(5)
Other income (loss), net (Note 18)12 (5)14 
Other comprehensive loss (Note 13)— — (1)— 
Realized gains, net
Net gains and interest income from marketable securities held to fund rabbi trusts$$$13 $
Other income (loss), net (Note 18)— — 
Marketable Securities Held for Investment Purposes—Marketable securities held for investment purposes, which are recorded at cost or fair value, depending on the nature of the investment, on our condensed consolidated balance sheets, were as follows:
June 30, 2021December 31, 2020
Time deposits$586 $657 
Interest-bearing money market funds117 107 
Common shares in Playa N.V. (Note 8)
90 72 
Total marketable securities held for investment purposes$793 $836 
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments(703)(764)
Marketable securities held for investment purposes included in other assets$90 $72 
We hold common shares in Playa Hotels & Resorts N.V. ("Playa N.V.") which are accounted for as an equity security with a readily determinable fair value as we do not have the ability to significantly influence the operations of the entity. We did not sell any shares of common stock during the six months ended June 30, 2021 or June 30, 2020. Net unrealized gains (losses) recognized on our condensed consolidated statements of income (loss) were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Other income (loss), net (Note 18)$$23 $18 $(58)
Fair Value—We measure marketable securities held to fund operating programs and held for investment purposes at fair value on a recurring basis:
June 30, 2021Cash and cash equivalentsShort-term investmentsOther assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds$313 $313 $— $— 
Mutual funds642 — — 642 
Common shares in Playa N.V.90 — — 90 
Level Two - Significant Other Observable Inputs
Time deposits592 — 587 
U.S. government obligations215 — — 215 
U.S. government agencies63 — — 63 
Corporate debt securities152 — 146 
Mortgage-backed securities24 — — 24 
Asset-backed securities32 — — 32 
Municipal and provincial notes and bonds— — 
Total$2,130 $313 $593 $1,224 
December 31, 2020Cash and cash equivalentsShort-term investmentsOther assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds$327 $327 $— $— 
Mutual funds581 — — 581 
Common shares in Playa N.V.72 — — 72 
Level Two - Significant Other Observable Inputs
Time deposits662 — 659 
U.S. government obligations208 — 205 
U.S. government agencies65 — — 65 
Corporate debt securities159 — 13 146 
Mortgage-backed securities24 — — 24 
Asset-backed securities35 — — 35 
Municipal and provincial notes and bonds— — 
Total$2,140 $327 $675 $1,138 
During the three and six months ended June 30, 2021 and June 30, 2020, there were no transfers between levels of the fair value hierarchy. We do not have non-financial assets or non-financial liabilities required to be measured at fair value on a recurring basis.
Other Investments
HTM Debt Securities—We hold investments in held-to-maturity ("HTM") debt securities, which are investments in third-party entities that own or are developing certain of our hotels. The securities are mandatorily redeemable between 2021 and 2027. At June 30, 2021 and December 31, 2020, HTM debt securities recorded within other assets on our condensed consolidated balance sheets were as follows:
June 30, 2021December 31, 2020
HTM debt securities$97 $102 
Less: allowance for credit losses(29)(21)
Total HTM debt securities, net of allowances$68 $81 
The following table summarizes the activity in our HTM debt security allowance for credit losses:
20212020
Allowance at January 1$21 $12 
Credit losses (a)
Allowance at March 31$22 $15 
Credit losses (a)
Allowance at June 30$29 $16 
(a) Credit losses were partially or fully offset by interest income recognized in the same periods (see Note 18).
We estimated the fair value of HTM debt securities to be approximately $96 million and $100 million at June 30, 2021 and December 31, 2020, respectively. The fair values, which are classified as Level Three in the fair value hierarchy, are estimated using internally developed discounted cash flow models based on current market inputs for similar types of arrangements. 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 both June 30, 2021 and December 31, 2020, we held $12 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.
v3.21.2
RECEIVABLES
6 Months Ended
Jun. 30, 2021
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
RECEIVABLES RECEIVABLES        
Receivables
At June 30, 2021 and December 31, 2020, we had $360 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 
Provisions
Other — 
Allowance at March 31$57 $38 
Provisions11 
Other(3)(11)
Allowance at June 30$58 $38 
                                            
Financing Receivables                        
June 30, 2021December 31, 2020
Unsecured financing to hotel owners$148 $145 
Less: current portion of financing receivables, included in receivables, net(2)(2)
Less: allowance for credit losses(120)(114)
Total long-term financing receivables, net of allowances$26 $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
Foreign currency exchange, net(2)(3)
Allowance at March 31$115 $99 
Provisions
Foreign currency exchange, net
Allowance at June 30$120 $105 
Credit Monitoring—Our unsecured financing receivables were as follows:
June 30, 2021
 Gross loan balance (principal and interest)Related allowanceNet financing receivablesGross receivables on nonaccrual status
Loans$84 $(56)$28 $49 
Other financing arrangements64 (64)— 60 
Total unsecured financing receivables$148 $(120)$28 $109 
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 $49 million and $44 million at June 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 ar