☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
20-1480589
|
||||
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|||
Class A common stock
|
H
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
PART I – FINANCIAL INFORMATION
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
Three Months Ended
|
||||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
REVENUES:
|
|
|
|
||||
Owned and leased hotels
|
$
|
323
|
|
|
$
|
470
|
|
Management, franchise, and other fees
|
108
|
|
|
141
|
|
||
Amortization of management and franchise agreement assets constituting payments to customers
|
(6
|
)
|
|
(5
|
)
|
||
Net management, franchise, and other fees
|
102
|
|
|
136
|
|
||
Other revenues
|
35
|
|
|
45
|
|
||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
533
|
|
|
590
|
|
||
Total revenues
|
993
|
|
|
1,241
|
|
||
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
|
|
|
|
||||
Owned and leased hotels
|
272
|
|
|
357
|
|
||
Depreciation and amortization
|
80
|
|
|
80
|
|
||
Other direct costs
|
34
|
|
|
45
|
|
||
Selling, general, and administrative
|
47
|
|
|
128
|
|
||
Costs incurred on behalf of managed and franchised properties
|
555
|
|
|
605
|
|
||
Direct and selling, general, and administrative expenses
|
988
|
|
|
1,215
|
|
||
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts
|
(48
|
)
|
|
30
|
|
||
Equity losses from unconsolidated hospitality ventures
|
(2
|
)
|
|
(3
|
)
|
||
Interest expense
|
(17
|
)
|
|
(19
|
)
|
||
Gains on sales of real estate
|
8
|
|
|
1
|
|
||
Asset impairments
|
(3
|
)
|
|
(3
|
)
|
||
Other income (loss), net
|
(81
|
)
|
|
51
|
|
||
INCOME (LOSS) BEFORE INCOME TAXES
|
(138
|
)
|
|
83
|
|
||
BENEFIT (PROVISION) FOR INCOME TAXES
|
35
|
|
|
(20
|
)
|
||
NET INCOME (LOSS)
|
(103
|
)
|
|
63
|
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
$
|
(103
|
)
|
|
$
|
63
|
|
EARNINGS (LOSSES) PER SHARE—Basic
|
|
|
|
||||
Net income (loss)
|
$
|
(1.02
|
)
|
|
$
|
0.60
|
|
Net income (loss) attributable to Hyatt Hotels Corporation
|
$
|
(1.02
|
)
|
|
$
|
0.60
|
|
EARNINGS (LOSSES) PER SHARE—Diluted
|
|
|
|
||||
Net income (loss)
|
$
|
(1.02
|
)
|
|
$
|
0.59
|
|
Net income (loss) attributable to Hyatt Hotels Corporation
|
$
|
(1.02
|
)
|
|
$
|
0.59
|
|
|
Three Months Ended
|
||||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
Net income (loss)
|
$
|
(103
|
)
|
|
$
|
63
|
|
Other comprehensive loss, net of taxes:
|
|
|
|
||||
Foreign currency translation adjustments, net of tax expense of $- for the three months ended March 31, 2020 and March 31, 2019
|
(51
|
)
|
|
(6
|
)
|
||
Unrealized losses on derivative activity, net of tax benefit of $(9) and $(1) for the three months ended March 31, 2020 and March 31, 2019, respectively
|
(25
|
)
|
|
(4
|
)
|
||
Other comprehensive loss
|
(76
|
)
|
|
(10
|
)
|
||
COMPREHENSIVE INCOME (LOSS)
|
(179
|
)
|
|
53
|
|
||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
|
|
—
|
|
||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION
|
$
|
(179
|
)
|
|
$
|
53
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,194
|
|
|
$
|
893
|
|
Restricted cash
|
18
|
|
|
150
|
|
||
Short-term investments
|
68
|
|
|
68
|
|
||
Receivables, net of allowances of $38 and $32 at March 31, 2020 and December 31, 2019, respectively
|
365
|
|
|
421
|
|
||
Inventories
|
12
|
|
|
12
|
|
||
Prepaids and other assets
|
65
|
|
|
134
|
|
||
Prepaid income taxes
|
31
|
|
|
28
|
|
||
Total current assets
|
1,753
|
|
|
1,706
|
|
||
Equity method investments
|
259
|
|
|
232
|
|
||
Property and equipment, net
|
3,294
|
|
|
3,456
|
|
||
Financing receivables, net of allowances of $99 and $100 at March 31, 2020 and December 31, 2019, respectively
|
35
|
|
|
35
|
|
||
Operating lease right-of-use assets
|
479
|
|
|
493
|
|
||
Goodwill
|
326
|
|
|
326
|
|
||
Intangibles, net
|
427
|
|
|
437
|
|
||
Deferred tax assets
|
199
|
|
|
144
|
|
||
Other assets
|
1,526
|
|
|
1,588
|
|
||
TOTAL ASSETS
|
$
|
8,298
|
|
|
$
|
8,417
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
360
|
|
|
$
|
11
|
|
Accounts payable
|
133
|
|
|
150
|
|
||
Accrued expenses and other current liabilities
|
279
|
|
|
304
|
|
||
Current contract liabilities
|
291
|
|
|
445
|
|
||
Accrued compensation and benefits
|
90
|
|
|
144
|
|
||
Current operating lease liabilities
|
30
|
|
|
32
|
|
||
Total current liabilities
|
1,183
|
|
|
1,086
|
|
||
Long-term debt
|
1,602
|
|
|
1,612
|
|
||
Long-term contract liabilities
|
613
|
|
|
475
|
|
||
Long-term operating lease liabilities
|
386
|
|
|
393
|
|
||
Other long-term liabilities
|
806
|
|
|
884
|
|
||
Total liabilities
|
4,590
|
|
|
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 March 31, 2020 and December 31, 2019
|
—
|
|
|
—
|
|
||
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 35,570,053 issued and outstanding at March 31, 2020, and Class B common stock, $0.01 par value per share, 397,457,686 shares authorized, 65,463,274 shares issued and outstanding at March 31, 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 shares issued and outstanding at December 31, 2019
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
—
|
|
|
—
|
|
||
Retained earnings
|
3,989
|
|
|
4,170
|
|
||
Accumulated other comprehensive loss
|
(285
|
)
|
|
(209
|
)
|
||
Total stockholders' equity
|
3,705
|
|
|
3,962
|
|
||
Noncontrolling interests in consolidated subsidiaries
|
3
|
|
|
5
|
|
||
Total equity
|
3,708
|
|
|
3,967
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
8,298
|
|
|
$
|
8,417
|
|
|
Three Months Ended
|
||||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(103
|
)
|
|
$
|
63
|
|
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
|
80
|
|
|
80
|
|
||
Release of contingent consideration liability
|
—
|
|
|
(25
|
)
|
||
Amortization of share awards
|
17
|
|
|
21
|
|
||
Amortization of operating lease right-of-use assets
|
8
|
|
|
9
|
|
||
Deferred income taxes
|
(45
|
)
|
|
1
|
|
||
Equity losses from unconsolidated hospitality ventures
|
2
|
|
|
3
|
|
||
Amortization of management and franchise agreement assets constituting payments to customers
|
6
|
|
|
5
|
|
||
Unrealized (gains) losses, net
|
79
|
|
|
(12
|
)
|
||
Distributions from unconsolidated hospitality ventures
|
2
|
|
|
2
|
|
||
Working capital changes and other
|
(138
|
)
|
|
(133
|
)
|
||
Net cash provided by (used in) operating activities
|
(100
|
)
|
|
13
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of marketable securities and short-term investments
|
(110
|
)
|
|
(67
|
)
|
||
Proceeds from marketable securities and short-term investments
|
109
|
|
|
123
|
|
||
Contributions to equity method and other investments
|
(21
|
)
|
|
(7
|
)
|
||
Return of equity method and other investments
|
2
|
|
|
—
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(15
|
)
|
||
Capital expenditures
|
(55
|
)
|
|
(66
|
)
|
||
Proceeds from sales of real estate, net of cash disposed
|
78
|
|
|
—
|
|
||
Other investing activities
|
10
|
|
|
(7
|
)
|
||
Net cash provided by (used in) investing activities
|
13
|
|
|
(39
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from long-term debt
|
400
|
|
|
120
|
|
||
Repayments of debt
|
(51
|
)
|
|
(1
|
)
|
||
Repurchases of common stock
|
(69
|
)
|
|
(102
|
)
|
||
Dividends paid
|
(20
|
)
|
|
(20
|
)
|
||
Other financing activities
|
(7
|
)
|
|
(2
|
)
|
||
Net cash provided by (used in) financing activities
|
253
|
|
|
(5
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
3
|
|
|
—
|
|
||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
169
|
|
|
(31
|
)
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR
|
1,063
|
|
|
622
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD
|
$
|
1,232
|
|
|
$
|
591
|
|
|
Three Months Ended
|
||||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
Cash paid during the period for interest
|
$
|
37
|
|
|
$
|
39
|
|
Cash paid during the period for income taxes
|
$
|
31
|
|
|
$
|
10
|
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
13
|
|
|
$
|
13
|
|
Non-cash investing and financing activities are as follows:
|
|
|
|
|
|
||
Non-cash contributions to equity method and other investments (see Note 7, Note 13)
|
$
|
33
|
|
|
$
|
—
|
|
Non-cash issuance of financing receivables
|
$
|
—
|
|
|
$
|
1
|
|
Change in accrued capital expenditures
|
$
|
9
|
|
|
$
|
1
|
|
Non-cash right-of-use assets obtained in exchange for operating lease liabilities
(see Note 7)
|
$
|
4
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Common Shares Outstanding
|
|
Common Stock Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interests in Consolidated Subsidiaries
|
|
Total
|
||||||||||||||||||
|
Class A
|
Class B
|
|
Class A
|
Class B
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE—January 1, 2019
|
39,507,817
|
|
67,115,828
|
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
3,819
|
|
|
$
|
(200
|
)
|
|
$
|
7
|
|
|
$
|
3,677
|
|
Total comprehensive income
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
63
|
|
|
(10
|
)
|
|
—
|
|
|
53
|
|
|||||||
Noncontrolling interests
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||
Repurchase of common stock
|
(1,452,858
|
)
|
—
|
|
|
—
|
|
—
|
|
|
(71
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(102
|
)
|
|||||||
Employee stock plan issuance
|
19,245
|
|
—
|
|
|
—
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Share-based payment activity
|
326,972
|
|
—
|
|
|
—
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||||
Cash dividends of $0.19 per share (see Note 14)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||||
BALANCE—March 31, 2019
|
38,401,176
|
|
67,115,828
|
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,831
|
|
|
$
|
(210
|
)
|
|
$
|
6
|
|
|
$
|
3,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE—December 31, 2019
|
36,109,179
|
|
65,463,274
|
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,170
|
|
|
$
|
(209
|
)
|
|
$
|
5
|
|
|
$
|
3,967
|
|
Cumulative effect of accounting changes, net of tax (see Note 3)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
BALANCE—January 1, 2020
|
36,109,179
|
|
65,463,274
|
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,169
|
|
|
$
|
(209
|
)
|
|
$
|
5
|
|
|
$
|
3,966
|
|
Total comprehensive loss
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
(76
|
)
|
|
—
|
|
|
(179
|
)
|
|||||||
Noncontrolling interests
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
Repurchase of common stock
|
(827,643
|
)
|
—
|
|
|
—
|
|
—
|
|
|
(12
|
)
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|||||||
Employee stock plan issuance
|
16,654
|
|
—
|
|
|
—
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Share-based payment activity
|
271,863
|
|
—
|
|
|
—
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||||
Cash dividends of $0.20 per share (see Note 14)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||||
BALANCE—March 31, 2020
|
35,570,053
|
|
65,463,274
|
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,989
|
|
|
$
|
(285
|
)
|
|
$
|
3
|
|
|
$
|
3,708
|
|
•
|
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 recognized 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 ("HTM").
|
•
|
Trading securities—recognized at fair value based on listed market prices or dealer price quotations, where available. Net gains and losses, both realized and unrealized, on trading
|
•
|
AFS securities—recognized 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 and 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.
|
•
|
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 upon 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. 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 property, and the current market, we record a separate liability with an offset recognized in other income (loss), net or equity earnings (losses) from unconsolidated hospitality ventures as necessary.
|
|
Three Months Ended March 31, 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
|
$
|
185
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(7
|
)
|
$
|
178
|
|
Food and beverage
|
105
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
105
|
|
|||||||
Other
|
40
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
40
|
|
|||||||
Owned and leased hotels
|
330
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
323
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Base management fees
|
—
|
|
44
|
|
6
|
|
7
|
|
—
|
|
(10
|
)
|
47
|
|
|||||||
Incentive management fees
|
—
|
|
4
|
|
3
|
|
2
|
|
—
|
|
(1
|
)
|
8
|
|
|||||||
Franchise fees
|
—
|
|
27
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27
|
|
|||||||
Other fees
|
—
|
|
1
|
|
2
|
|
1
|
|
1
|
|
—
|
|
5
|
|
|||||||
License fees
|
—
|
|
8
|
|
8
|
|
—
|
|
5
|
|
—
|
|
21
|
|
|||||||
Management, franchise, and other fees
|
—
|
|
84
|
|
19
|
|
10
|
|
6
|
|
(11
|
)
|
108
|
|
|||||||
Amortization of management and franchise agreement assets constituting payments to customers
|
—
|
|
(4
|
)
|
(1
|
)
|
(1
|
)
|
—
|
|
—
|
|
(6
|
)
|
|||||||
Net management, franchise, and other fees
|
—
|
|
80
|
|
18
|
|
9
|
|
6
|
|
(11
|
)
|
102
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Other revenues
|
—
|
|
27
|
|
—
|
|
—
|
|
8
|
|
—
|
|
35
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties
|
—
|
|
484
|
|
27
|
|
20
|
|
2
|
|
—
|
|
533
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
330
|
|
$
|
591
|
|
$
|
45
|
|
$
|
29
|
|
$
|
16
|
|
$
|
(18
|
)
|
$
|
993
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Deferred revenue related to the loyalty program
|
$
|
696
|
|
|
$
|
671
|
|
Advanced deposits
|
54
|
|
|
77
|
|
||
Initial fees received from franchise owners
|
41
|
|
|
41
|
|
||
Deferred revenue related to system-wide services
|
3
|
|
|
5
|
|
||
Other deferred revenue
|
110
|
|
|
126
|
|
||
Total contract liabilities
|
$
|
904
|
|
|
$
|
920
|
|
|
2020
|
|
2019
|
||||
Beginning balance, January 1
|
$
|
920
|
|
|
$
|
830
|
|
Cash received and other
|
246
|
|
|
247
|
|
||
Revenue recognized
|
(262
|
)
|
|
(228
|
)
|
||
Ending balance, March 31
|
$
|
904
|
|
|
$
|
849
|
|
•
|
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.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Total revenues
|
$
|
117
|
|
|
$
|
116
|
|
Gross operating profit
|
34
|
|
|
39
|
|
||
Loss from continuing operations
|
(7
|
)
|
|
(10
|
)
|
||
Net loss
|
(7
|
)
|
|
(10
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Loyalty program (Note 9)
|
$
|
510
|
|
|
$
|
483
|
|
Deferred compensation plans held in rabbi trusts (Note 9 and Note 11)
|
385
|
|
|
450
|
|
||
Captive insurance companies
|
173
|
|
|
180
|
|
||
Total marketable securities held to fund operating programs
|
$
|
1,068
|
|
|
$
|
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
|
(172
|
)
|
|
(219
|
)
|
||
Marketable securities held to fund operating programs included in other assets
|
$
|
896
|
|
|
$
|
894
|
|
|
Three Months Ended March 31,
|
||||||
2020
|
|
2019
|
|||||
Loyalty program (Note 19)
|
$
|
11
|
|
|
$
|
9
|
|
|
Three Months Ended March 31,
|
||||||
2020
|
|
2019
|
|||||
Unrealized gains (losses)
|
$
|
(50
|
)
|
|
$
|
28
|
|
Realized gains
|
2
|
|
|
2
|
|
||
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts
|
$
|
(48
|
)
|
|
$
|
30
|
|
|
March 31, 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
|
$
|
509
|
|
|
$
|
509
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds
|
444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
444
|
|
|||||
Common shares
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Level Two - Significant Other Observable Inputs
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
45
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
4
|
|
|||||
U.S. government obligations
|
207
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
201
|
|
|||||
U.S. government agencies
|
42
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
39
|
|
|||||
Corporate debt securities
|
159
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
141
|
|
|||||
Mortgage-backed securities
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Asset-backed securities
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Municipal and provincial notes and bonds
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Total
|
$
|
1,494
|
|
|
$
|
509
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
917
|
|
|
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
|
|
|
$
|
66
|
|
|
$
|
996
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Unsecured financing to hotel owners
|
$
|
134
|
|
|
$
|
135
|
|
Less: allowance for losses
|
(99
|
)
|
|
(100
|
)
|
||
Total long-term financing receivables, net of allowances
|
$
|
35
|
|
|
$
|
35
|
|
|
2020
|
|
2019
|
||||
Allowance at January 1
|
$
|
100
|
|
|
$
|
101
|
|
Provisions
|
2
|
|
|
2
|
|
||
Foreign currency exchange, net
|
(3
|
)
|
|
—
|
|
||
Allowance at March 31
|
$
|
99
|
|
|
$
|
103
|
|
|
March 31, 2020
|
||||||||||||||
|
Gross loan balance (principal and interest)
|
|
Related allowance
|
|
Net financing receivables
|
|
Gross receivables on non-accrual status
|
||||||||
Loans
|
$
|
34
|
|
|
$
|
(1
|
)
|
|
$
|
33
|
|
|
$
|
—
|
|
Impaired loans (1)
|
40
|
|
|
(40
|
)
|
|
—
|
|
|
40
|
|
||||
Total loans
|
74
|
|
|
(41
|
)
|
|
33
|
|
|
40
|
|
||||
Other financing arrangements
|
60
|
|
|
(58
|
)
|
|
2
|
|
|
58
|
|
||||
Total unsecured financing receivables
|
$
|
134
|
|
|
$
|
(99
|
)
|
|
$
|
35
|
|
|
$
|
98
|
|
|
December 31, 2019
|
||||||||||||||
|
Gross loan balance (principal and interest)
|
|
Related allowance
|
|
Net financing receivables
|
|
Gross receivables on non-accrual status
|
||||||||
Loans
|
$
|
33
|
|
|
$
|
(1
|
)
|
|
$
|
32
|
|
|
$
|
—
|
|
Impaired loans (2)
|
43
|
|
|
(43
|
)
|
|
—
|
|
|
43
|
|
||||
Total loans
|
76
|
|
|
(44
|
)
|
|
32
|
|
|
43
|
|
||||
Other financing arrangements
|
59
|
|
|
(56
|
)
|
|
3
|
|
|
56
|
|
||||
Total unsecured financing receivables
|
$
|
135
|
|
|
$
|
(100
|
)
|
|
$
|
35
|
|
|
$
|
99
|
|
|
March 31, 2020
|
|
Weighted-
average useful
lives in years
|
|
December 31, 2019
|
|||||
Management and franchise agreement intangibles
|
$
|
363
|
|
|
18
|
|
|
$
|
367
|
|
Brand and other indefinite-lived intangibles
|
144
|
|
|
—
|
|
|
144
|
|
||
Advanced booking intangibles
|
14
|
|
|
5
|
|
|
14
|
|
||
Other definite-lived intangibles
|
8
|
|
|
6
|
|
|
8
|
|
||
Intangibles
|
529
|
|
|
|
|
533
|
|
|||
Less: accumulated amortization
|
(102
|
)
|
|
|
|
(96
|
)
|
|||
Intangibles, net
|
$
|
427
|
|
|
|
|
$
|
437
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Amortization expense
|
$
|
7
|
|
|
$
|
3
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Management and franchise agreement assets constituting payments to customers (1)
|
$
|
431
|
|
|
$
|
423
|
|
Marketable securities held to fund the loyalty program (Note 5)
|
420
|
|
|
347
|
|
||
Marketable securities held to fund rabbi trusts (Note 5)
|
385
|
|
|
450
|
|
||
Marketable securities held for captive insurance companies (Note 5)
|
91
|
|
|
97
|
|
||
Long-term investments
|
74
|
|
|
65
|
|
||
Common shares of Playa N.V. (Note 5)
|
21
|
|
|
102
|
|
||
Other
|
104
|
|
|
104
|
|
||
Total other assets
|
$
|
1,526
|
|
|
$
|
1,588
|
|
(1) Includes cash consideration as well as other forms of consideration provided, such as debt repayment or performance guarantees.
|
|
March 31, 2020
|
||||||||||||||||||
|
Carrying value
|
|
Fair value
|
|
Quoted prices in active markets for identical assets (Level One)
|
|
Significant other observable inputs (Level Two)
|
|
Significant unobservable inputs (Level Three)
|
||||||||||
Debt (1)
|
$
|
1,965
|
|
|
$
|
1,896
|
|
|
$
|
—
|
|
|
$
|
1,504
|
|
|
$
|
392
|
|
|
December 31, 2019
|
||||||||||||||||||
|
Carrying value
|
|
Fair value
|
|
Quoted prices in active markets for identical assets (Level One)
|
|
Significant other observable inputs (Level Two)
|
|
Significant unobservable inputs (Level Three)
|
||||||||||
Debt (2)
|
$
|
1,627
|
|
|
$
|
1,740
|
|
|
$
|
—
|
|
|
$
|
1,680
|
|
|
$
|
60
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Deferred compensation plans funded by rabbi trusts (Note 5)
|
$
|
385
|
|
|
$
|
450
|
|
Income taxes payable
|
164
|
|
|
147
|
|
||
Self-insurance liabilities (Note 13)
|
79
|
|
|
80
|
|
||
Deferred income taxes (Note 12)
|
45
|
|
|
47
|
|
||
Guarantee liabilities (Note 13)
|
42
|
|
|
46
|
|
||
Other
|
91
|
|
|
114
|
|
||
Total other long-term liabilities
|
$
|
806
|
|
|
$
|
884
|
|
|
|
The four managed hotels in France
|
|
Other performance guarantees
|
|
All performance guarantees
|
||||||||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||
Beginning balance, January 1
|
|
$
|
20
|
|
|
$
|
36
|
|
|
$
|
13
|
|
|
$
|
11
|
|
|
$
|
33
|
|
|
$
|
47
|
|
Initial guarantee obligation liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Amortization of initial guarantee obligation liability into income
|
|
(4
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
||||||
Performance guarantee expense, net
|
|
20
|
|
|
20
|
|
|
6
|
|
|
1
|
|
|
26
|
|
|
21
|
|
||||||
Net payments during the period
|
|
(15
|
)
|
|
(16
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(18
|
)
|
|
(19
|
)
|
||||||
Ending balance, March 31
|
|
$
|
21
|
|
|
$
|
36
|
|
|
$
|
15
|
|
|
$
|
10
|
|
|
$
|
36
|
|
|
$
|
46
|
|
Property description
|
|
Maximum potential future payments
|
|
Maximum exposure net of recoverability from third parties
|
|
Other long-term liabilities recorded at March 31, 2020
|
|
Other long-term liabilities recorded at December 31, 2019
|
|
Year of guarantee expiration
|
||||||||
Hotel properties in India (1)
|
|
$
|
159
|
|
|
$
|
159
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
2020
|
Hotel and residential properties in Brazil (2), (3)
|
|
90
|
|
|
38
|
|
|
3
|
|
|
3
|
|
|
various, through 2023
|
||||
Hotel properties in Tennessee (2)
|
|
44
|
|
|
20
|
|
|
8
|
|
|
8
|
|
|
various, through 2023
|
||||
Hotel property in Pennsylvania (2), (4)
|
|
32
|
|
|
11
|
|
|
2
|
|
|
—
|
|
|
various, through 2023
|
||||
Hotel properties in California (2)
|
|
31
|
|
|
12
|
|
|
3
|
|
|
3
|
|
|
various, through 2021
|
||||
Hotel property in Massachusetts (2), (4)
|
|
27
|
|
|
15
|
|
|
5
|
|
|
6
|