~~0001468174us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-31~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-34521

HYATT HOTELS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

20-1480589

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

150 North Riverside Plaza

8th Floor, Chicago, Illinois 60606

(Address of Principal Executive Offices) (Zip Code)

(312) 750-1234

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A ~~common stock~~Common Stock, $0.01 par value

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At ~~October~~April 30, ~~2020,~~2021, there were ~~38,479,041~~41,150,456 shares of the registrant's Class A common stock, $0.01 par value, outstanding and ~~62,696,948~~60,623,918 shares of the registrant's Class B common stock, $0.01 par value, outstanding.

Table of Contents

HYATT HOTELS CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED ~~SEPTEMBER 30, 2020~~MARCH 31, 2021

TABLE OF CONTENTS



	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3627
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6246
Item 4.	Controls and Procedures	6347

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	6448
Item 1A.	Risk Factors	6448
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6748
Item 3.	Defaults Upon Senior Securities	6748
Item 4.	Mine Safety Disclosures	6748
Item 5.	Other Information	6749
Item 6.	Exhibits	6850

Signatures		6951

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In millions of dollars, except per share amounts)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019			March 31, 2021		March 31, 2020
REVENUES:	REVENUES:									REVENUES:
Owned and leased hotels	Owned and leased hotels	$	80	$	430	$	422	$	1,390	Owned and leased hotels	$	104	$	323
Management, franchise, and other fees	Management, franchise, and other fees	52		148		180		447		Management, franchise, and other fees	63		108
Amortization of management and franchise agreement assets constituting payments to customers		(7)		(5)		(20)		(16)
Contra revenue										Contra revenue	(8)		(6)
Net management, franchise, and other fees	Net management, franchise, and other fees	45		143		160		431		Net management, franchise, and other fees	55		102
Other revenues	Other revenues	7		25		45		98		Other revenues	19		35
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	267		617		1,015		1,826		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	260		533
Total revenues	Total revenues	399		1,215		1,642		3,745		Total revenues	438		993
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:	DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:									DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Owned and leased hotels	Owned and leased hotels	131		346		495		1,070		Owned and leased hotels	124		272
Depreciation and amortization	Depreciation and amortization	80		85		233		248		Depreciation and amortization	74		80
Other direct costs	Other direct costs	9		28		50		103		Other direct costs	23		34
Selling, general, and administrative	Selling, general, and administrative	69		83		217		306		Selling, general, and administrative	95		47
Costs incurred on behalf of managed and franchised properties	Costs incurred on behalf of managed and franchised properties	278		633		1,068		1,871		Costs incurred on behalf of managed and franchised properties	277		555
Direct and selling, general, and administrative expenses	Direct and selling, general, and administrative expenses	567		1,175		2,063		3,598		Direct and selling, general, and administrative expenses	593		988
Net gains and interest income from marketable securities held to fund rabbi trusts		22		0		23		41
Equity losses from unconsolidated hospitality ventures		(20)		(5)		(45)		(2)
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts										Net gains (losses) and interest income from marketable securities held to fund rabbi trusts	12		(48)
Equity earnings (losses) from unconsolidated hospitality ventures										Equity earnings (losses) from unconsolidated hospitality ventures	54		(2)
Interest expense	Interest expense	(35)		(19)		(87)		(58)		Interest expense	(41)		(17)
Gains on sales of real estate	Gains on sales of real estate	0		373		8		374		Gains on sales of real estate	0		8
Asset impairments	Asset impairments	0		(9)		(52)		(13)		Asset impairments	0		(3)
Other income (loss), net	Other income (loss), net	(19)		25		(114)		104		Other income (loss), net	12		(81)
INCOME (LOSS) BEFORE INCOME TAXES		(220)		405		(688)		593
LOSS BEFORE INCOME TAXES										LOSS BEFORE INCOME TAXES	(118)		(138)
BENEFIT (PROVISION) FOR INCOME TAXES	BENEFIT (PROVISION) FOR INCOME TAXES	59		(109)		188		(148)		BENEFIT (PROVISION) FOR INCOME TAXES	(186)		35
NET INCOME (LOSS)		(161)		296		(500)		445
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS		0		0		0		0
NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION		$	(161)	$	296	$	(500)	$	445
EARNINGS (LOSSES) PER SHARE—Basic
Net income (loss)		$	(1.59)	$	2.84	$	(4.93)	$	4.23
Net income (loss) attributable to Hyatt Hotels Corporation		$	(1.59)	$	2.84	$	(4.93)	$	4.23
EARNINGS (LOSSES) PER SHARE—Diluted
Net income (loss)		$	(1.59)	$	2.80	$	(4.93)	$	4.17
Net income (loss) attributable to Hyatt Hotels Corporation		$	(1.59)	$	2.80	$	(4.93)	$	4.17
NET LOSS										NET LOSS	(304)		(103)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS										NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	0		0
NET LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION										NET LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	(304)	$	(103)
LOSSES PER SHARE—Basic										LOSSES PER SHARE—Basic
Net loss										Net loss	$	(2.99)	$	(1.02)
Net loss attributable to Hyatt Hotels Corporation										Net loss attributable to Hyatt Hotels Corporation	$	(2.99)	$	(1.02)
LOSSES PER SHARE—Diluted										LOSSES PER SHARE—Diluted
Net loss										Net loss	$	(2.99)	$	(1.02)
Net loss attributable to Hyatt Hotels Corporation										Net loss attributable to Hyatt Hotels Corporation	$	(2.99)	$	(1.02)

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions of dollars)

(Unaudited)

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Net income (loss) $ (161) $ 296 $ (500) $ 445
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments, net of tax expense (benefit) of $1 for the three and nine months ended September 30, 2020 and $(1) for the three and nine months ended September 30, 2019, respectively 15 (27) (17) (27)
Unrealized gains (losses) on derivative activity, net of tax benefit of $0 and $(9) for the three and nine months ended September 30, 2020 and $(3) and $(7) for the three and nine months ended September 30, 2019, respectively 2 (9) (24) (21)
Other comprehensive income (loss) 17 (36) (41) (48)
COMPREHENSIVE INCOME (LOSS) (144) 260 (541) 397
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0 0 0 0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS CORPORATION $ (144) $ 260 $ (541) $ 397


	Three Months Ended
	March 31, 2021		March 31, 2020
Net loss	$	(304)	$	(103)
Other comprehensive loss, net of taxes:
Foreign currency translation adjustments, net of tax benefit of $0 for the three months ended March 31, 2021 and March 31, 2020	(46)		(51)
Unrealized losses on available-for-sale debt securities, net of tax benefit of $0 for the three months ended March 31, 2021 and March 31,2020	(1)		0
Unrealized gains (losses) on derivative activity, net of tax benefit of $0 and $(9) for the three months ended March 31, 2021, and March 31, 2020, respectively	2		(25)
Other comprehensive loss	(45)		(76)
COMPREHENSIVE LOSS	(349)		(179)
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	0		0
COMPREHENSIVE LOSS ATTRIBUTABLE TO HYATT HOTELS CORPORATION	$	(349)	$	(179)

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except share and per share amounts)

(Unaudited)


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
CURRENT ASSETS:	CURRENT ASSETS:					CURRENT ASSETS:
Cash and cash equivalents	Cash and cash equivalents	$	1,778	$	893	Cash and cash equivalents	$	1,078	$	1,207
Restricted cash	Restricted cash	12		150		Restricted cash	9		11
Short-term investments	Short-term investments	310		68		Short-term investments	550		675
Receivables, net of allowances of $46 and $32 at September 30, 2020 and December 31, 2019, respectively		322		421
Receivables, net of allowances of $57 and $56 at March 31, 2021 and December 31, 2020, respectively						Receivables, net of allowances of $57 and $56 at March 31, 2021 and December 31, 2020, respectively	340		316
Inventories	Inventories	14		12		Inventories	9		9
Prepaids and other assets	Prepaids and other assets	42		134		Prepaids and other assets	58		64
Prepaid income taxes	Prepaid income taxes	160		28		Prepaid income taxes	288		281

Total current assets	Total current assets	2,638		1,706		Total current assets	2,332		2,563
Equity method investments	Equity method investments	260		232		Equity method investments	259		260
Property and equipment, net	Property and equipment, net	3,178		3,456		Property and equipment, net	3,159		3,126
Financing receivables, net of allowances of $107 and $100 at September 30, 2020 and December 31, 2019, respectively		32		35
Financing receivables, net of allowances of $115 and $114 at March 31, 2021 and December 31, 2020, respectively						Financing receivables, net of allowances of $115 and $114 at March 31, 2021 and December 31, 2020, respectively	24		29
Operating lease right-of-use assets	Operating lease right-of-use assets	485		493		Operating lease right-of-use assets	458		474
Goodwill	Goodwill	288		326		Goodwill	288		288
Intangibles, net	Intangibles, net	412		437		Intangibles, net	378		385
Deferred tax assets	Deferred tax assets	243		144		Deferred tax assets	15		207
Other assets	Other assets	1,689		1,588		Other assets	1,856		1,797
TOTAL ASSETS	TOTAL ASSETS	$	9,225	$	8,417	TOTAL ASSETS	$	8,769	$	9,129
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
CURRENT LIABILITIES:	CURRENT LIABILITIES:					CURRENT LIABILITIES:
Current maturities of long-term debt	Current maturities of long-term debt	$	260	$	11	Current maturities of long-term debt	$	260	$	260
Accounts payable	Accounts payable	101		150		Accounts payable	102		102
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	228		304		Accrued expenses and other current liabilities	180		200
Current contract liabilities	Current contract liabilities	246		445		Current contract liabilities	281		282
Accrued compensation and benefits	Accrued compensation and benefits	103		144		Accrued compensation and benefits	100		111
Current operating lease liabilities	Current operating lease liabilities	32		32		Current operating lease liabilities	27		29
Total current liabilities	Total current liabilities	970		1,086		Total current liabilities	950		984
Long-term debt	Long-term debt	2,981		1,612		Long-term debt	2,982		2,984
Long-term contract liabilities	Long-term contract liabilities	643		475		Long-term contract liabilities	679		659
Long-term operating lease liabilities	Long-term operating lease liabilities	390		393		Long-term operating lease liabilities	363		377
Other long-term liabilities	Other long-term liabilities	888		884		Other long-term liabilities	907		911
Total liabilities	Total liabilities	5,872		4,450		Total liabilities	5,881		5,915
Commitments and contingencies (see Note 13)
Commitments and contingencies (see Note 12)						Commitments and contingencies (see Note 12)	0		0

EQUITY:	EQUITY:					EQUITY:
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and NaN outstanding as of September 30, 2020 and December 31, 2019		0		0
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 38,466,898 issued and outstanding at September 30, 2020, and Class B common stock, $0.01 par value per share, 394,691,360 shares authorized, 62,696,948 shares issued and outstanding at September 30, 2020. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 36,109,179 issued and outstanding at December 31, 2019, and Class B common stock, $0.01 par value per share, 397,457,686 shares authorized, 65,463,274 shares issued and outstanding at December 31, 2019		1		1
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and NaN outstanding as of March 31, 2021 and December 31, 2020						Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and NaN outstanding as of March 31, 2021 and December 31, 2020	0		0
Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 40,523,505 issued and outstanding at March 31, 2021, and Class B common stock, $0.01 par value per share, 393,233,161 shares authorized, 61,238,749 shares issued and outstanding at March 31, 2021. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 39,250,241 issued and outstanding at December 31, 2020, and Class B common stock, $0.01 par value per share, 394,033,330 shares authorized, 62,038,918 shares issued and outstanding at December 31, 2020						Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 40,523,505 issued and outstanding at March 31, 2021, and Class B common stock, $0.01 par value per share, 393,233,161 shares authorized, 61,238,749 shares issued and outstanding at March 31, 2021. Class A common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 39,250,241 issued and outstanding at December 31, 2020, and Class B common stock, $0.01 par value per share, 394,033,330 shares authorized, 62,038,918 shares issued and outstanding at December 31, 2020	1		1
Additional paid-in capital	Additional paid-in capital	7		0		Additional paid-in capital	36		13
Retained earnings	Retained earnings	3,592		4,170		Retained earnings	3,085		3,389
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(250)		(209)		Accumulated other comprehensive loss	(237)		(192)
Total stockholders' equity	Total stockholders' equity	3,350		3,962		Total stockholders' equity	2,885		3,211
Noncontrolling interests in consolidated subsidiaries	Noncontrolling interests in consolidated subsidiaries	3		5		Noncontrolling interests in consolidated subsidiaries	3		3
Total equity	Total equity	3,353		3,967		Total equity	2,888		3,214
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	9,225	$	8,417	TOTAL LIABILITIES AND EQUITY	$	8,769	$	9,129

See accompanying Notes to condensed consolidated financial statements.

Table of Contents

HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

(Unaudited)


		Nine Months Ended					Three Months Ended
		September 30, 2020		September 30, 2019			March 31, 2021		March 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:					CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(500)	$	445
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net loss						Net loss	$	(304)	$	(103)
Adjustments to reconcile net loss to net cash used in operating activities:						Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization						Depreciation and amortization	74		80

Gains on sales of real estate	Gains on sales of real estate	(8)		(374)		Gains on sales of real estate	0		(8)
Depreciation and amortization		233		248
Release of contingent consideration liability		0		(29)
Amortization of share awards	Amortization of share awards	24		32		Amortization of share awards	32		17
Amortization of operating lease right-of-use assets	Amortization of operating lease right-of-use assets	23		28		Amortization of operating lease right-of-use assets	8		8
Deferred income taxes	Deferred income taxes	(59)		32		Deferred income taxes	200		(45)
Asset impairments		52		13

Equity losses from unconsolidated hospitality ventures		45		2

Equity (earnings) losses from unconsolidated hospitality ventures						Equity (earnings) losses from unconsolidated hospitality ventures	(54)		2

Amortization of management and franchise agreement assets constituting payments to customers		20		16
Contra revenue						Contra revenue	8		6

Unrealized (gains) losses, net	Unrealized (gains) losses, net	36		(23)		Unrealized (gains) losses, net	(8)		79

Working capital changes and other	Working capital changes and other	(329)		(116)		Working capital changes and other	(47)		(136)
Net cash provided by (used in) operating activities		(463)		274
Net cash used in operating activities						Net cash used in operating activities	(91)		(100)
CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:					CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities and short-term investments	Purchases of marketable securities and short-term investments	(622)		(196)		Purchases of marketable securities and short-term investments	(423)		(110)
Proceeds from marketable securities and short-term investments	Proceeds from marketable securities and short-term investments	399		255		Proceeds from marketable securities and short-term investments	523		109
Contributions to equity method and other investments	Contributions to equity method and other investments	(57)		(39)		Contributions to equity method and other investments	(16)		(21)
Return of equity method and other investments		5		26

Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	0		(18)		Acquisitions, net of cash acquired	(84)		0
Capital expenditures	Capital expenditures	(104)		(244)		Capital expenditures	(19)		(55)

Proceeds from sales of real estate, net of cash disposed	Proceeds from sales of real estate, net of cash disposed	78		461		Proceeds from sales of real estate, net of cash disposed	0		78
Proceeds from financing receivables		0		46

Other investing activities	Other investing activities	(17)		7		Other investing activities	(12)		12
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(318)		298		Net cash provided by (used in) investing activities	(31)		13
CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:					CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt, net of issuance costs of $15 and $0 for the nine months ended September 30, 2020 and September 30, 2019, respectively		2,035		180
Proceeds from debt						Proceeds from debt	0		400

Repayments of debt	Repayments of debt	(405)		(187)		Repayments of debt	(1)		(51)
Repurchases of common stock	Repurchases of common stock	(69)		(280)		Repurchases of common stock	0		(69)
Contingent consideration paid		0		(24)

Dividends paid	Dividends paid	(20)		(60)		Dividends paid	0		(20)
Other financing activities	Other financing activities	(14)		(9)		Other financing activities	(13)		(7)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	1,527		(380)		Net cash provided by (used in) financing activities	(14)		253
EFFECT OF EXCHANGE RATE CHANGES ON CASH	EFFECT OF EXCHANGE RATE CHANGES ON CASH	1		6		EFFECT OF EXCHANGE RATE CHANGES ON CASH	5		3

NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		747		198
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH						NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(131)		169
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR	1,063		622		CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—BEGINNING OF YEAR	1,237		1,063

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD	$	1,810	$	820	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—END OF PERIOD	$	1,106	$	1,232

See accompanying Notes to condensed consolidated financial statements.

Supplemental disclosure of cash flow information:


		September 30, 2020		September 30, 2019			March 31, 2021		March 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	1,778	$	660	Cash and cash equivalents	$	1,078	$	1,194
Restricted cash (1)	Restricted cash (1)	12		140		Restricted cash (1)	9		18
Restricted cash included in other assets (1)	Restricted cash included in other assets (1)	20		20		Restricted cash included in other assets (1)	19		20
Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	$	1,810	$	820	Total cash, cash equivalents, and restricted cash	$	1,106	$	1,232

(1) Restricted cash generally represents sales proceeds pursuant to like-kind exchanges, debt service on bonds, escrow deposits, and other arrangements.
(1) Restricted cash generally represents debt service on bonds, escrow deposits, and other arrangements.						(1) Restricted cash generally represents debt service on bonds, escrow deposits, and other arrangements.


		Nine Months Ended				Three Months Ended
		September 30, 2020		September 30, 2019				March 31, 2021		March 31, 2020
Cash paid during the period for interest	Cash paid during the period for interest	$	73	$	78		Cash paid during the period for interest	$	42	$	37
Cash paid during the period for income taxes		$	54	$	52
Cash paid (received) during the period for income taxes, net							Cash paid (received) during the period for income taxes, net	$	(2)	$	31
Cash paid for amounts included in the measurement of operating lease liabilities	Cash paid for amounts included in the measurement of operating lease liabilities	$	32	$	38		Cash paid for amounts included in the measurement of operating lease liabilities	$	9	$	13

Non-cash investing and financing activities are as follows:	Non-cash investing and financing activities are as follows:						Non-cash investing and financing activities are as follows:
Non-cash contributions to equity method and other investments (see Note 7, Note 13)		$	33	$	8
Non-cash contributions to equity method and other investments (see Note 6, Note 12)							Non-cash contributions to equity method and other investments (see Note 6, Note 12)	$	0	$	33

Change in accrued capital expenditures	Change in accrued capital expenditures	$	(7)	$	11		Change in accrued capital expenditures	$	0	$	9
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 7)		$	14	$	8
Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 6)							Non-cash right-of-use assets obtained in exchange for operating lease liabilities (see Note 6)	$	2	$	4

See accompanying Notes to condensed consolidated financial statements.

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HYATT HOTELS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In millions except share and per share amounts)

(Unaudited)


		Common Shares Outstanding		Common Stock Amount				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests in Consolidated Subsidiaries		Total			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													Class		Class
BALANCE—January 1, 2019		39,507,817	67,115,828	$	1	$	—	$	50	$	3,819	$	(200)	$	7	$	3,677
Total comprehensive income		—	—	—		—		—		63		(10)		—		53
																			A	B	A		B

BALANCE—January 1, 2020																		BALANCE—January 1, 2020	36,109,179	65,463,274	$	1	$	—	$	0	$	4,169	$	(209)	$	5	$	3,966
Total comprehensive loss																		Total comprehensive loss	—	—	—		—		—		(103)		(76)		—		(179)
Noncontrolling interests	Noncontrolling interests	—	—	—		—		—		—		—		(1)		(1)		Noncontrolling interests	—	—	—		—		—		—		—		(2)		(2)
Repurchase of common stock	Repurchase of common stock	(1,452,858)	—	—		—		(71)		(31)		—		—		(102)		Repurchase of common stock	(827,643)	—	—		—		(12)		(57)		—		—		(69)
Employee stock plan issuance	Employee stock plan issuance	19,245	—	—		—		1		—		—		—		1		Employee stock plan issuance	16,654	—	—		—		1		—		—		—		1
Share-based payment activity	Share-based payment activity	326,972	—	—		—		20		—		—		—		20		Share-based payment activity	271,863	—	—		—		11		—		—		—		11
Cash dividends of $0.19 per share (see Note 14)		—	—	—		—		—		(20)		—		—		(20)
BALANCE—March 31, 2019		38,401,176	67,115,828	1		—		0		3,831		(210)		6		3,628
Total comprehensive income		—	—	—		—		—		86		(2)		—		84
Noncontrolling interests		—	—	—		—		—		—		—		(1)		(1)
Repurchase of common stock		(599,678)	—	—		—		(1)		(44)		—		—		(45)
Directors compensation		—	—	—		—		1		—		—		—		1
Employee stock plan issuance		20,523	—	—		—		1		—		—		—		1
Share-based payment activity		44,993	—	—		—		(1)		—		—		—		(1)
Cash dividends of $0.19 per share (see Note 14)		—	—	—		—		—		(20)		—		—		(20)
BALANCE—June 30, 2019		37,867,014	67,115,828	1		—		0		3,853		(212)		5		3,647
Total comprehensive income		—	—	—		—		—		296		(36)		—		260
Cash dividends of $0.20 per share (see Note 13)																		Cash dividends of $0.20 per share (see Note 13)	—	—	—		—		—		(20)		—		—		(20)
BALANCE—March 31, 2020																		BALANCE—March 31, 2020	35,570,053	65,463,274	$	1	$	—	$	0	$	3,989	$	(285)	$	3	$	3,708

Repurchase of common stock		(1,099,507)	(677,384)	—		—		(7)		(126)		—		—		(133)

Employee stock plan issuance		20,026	—	—		—		2		—		—		—		2
Share-based payment activity		23,841	—	—		—		5		—		—		—		5
Cash dividends of $0.19 per share (see Note 14)		—	—	—		—		—		(20)		—		—		(20)
BALANCE—September 30, 2019		36,811,374	66,438,444	$	1	—		$	0	$	4,003	$	(248)	$	5	$	3,761

BALANCE—December 31, 2019		36,109,179	65,463,274	$	1	$	—	$	0	$	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	$	—	$	0	$	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		—		0		3,989		(285)		3		3,708

BALANCE—January 1, 2021																		BALANCE—January 1, 2021	39,250,241	62,038,918	$	1	$	—	$	13	$	3,389	$	(192)	$	3	$	3,214
Total comprehensive loss	Total comprehensive loss	—	—	—		—		—		(236)		18		—		(218)		Total comprehensive loss	—	—	—		—		—		(304)		(45)		—		(349)

Employee stock plan issuance	Employee stock plan issuance	35,338	—	—		—		2		—		—		—		2		Employee stock plan issuance	10,992	—	—		—		1		—		—		—		1
Class share conversions																		Class share conversions	800,169	(800,169)	—		—		—		—		—		—		—
Share-based payment activity	Share-based payment activity	74,047	—	—		—		1		—		—		—		1		Share-based payment activity	462,103	—	—		—		22		—		—		—		22
Class share conversions		2,435,243	(2,435,243)	—		—		—		—		—		—		—

BALANCE—June 30, 2020		38,114,681	63,028,031	1		—		3		3,753		(267)		3		3,493
Total comprehensive loss		—	—	—		—		—		(161)		17		—		(144)
BALANCE—March 31, 2021																		BALANCE—March 31, 2021	40,523,505	61,238,749	$	1	$	—	$	36	$	3,085	$	(237)	$	3	$	2,888

Share-based payment activity		9,506	—	—		—		4		—		—		—		4
Employee stock plan issuance		11,628	—	—		—		—		—		—		—		0
Class share conversions		331,083	(331,083)	—		—		—		—		—		—		—

BALANCE—September 30, 2020		38,466,898	62,696,948	$	1	$	—	$	7	$	3,592	$	(250)	$	3	$	3,353

See accompanying Notes to condensed consolidated financial statements.

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HYATT HOTELS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in millions of dollars, unless otherwise indicated)

(Unaudited)

1. ORGANIZATION

Hyatt Hotels Corporation, a Delaware corporation, and its consolidated subsidiaries (collectively "Hyatt Hotels Corporation") ~~provide~~provides hospitality and other services on a worldwide basis through the ~~development, ownership,~~ operation, management, franchising, ownership, development, and licensing of hospitality ~~and wellness-related~~ businesses. We ~~develop, own,~~ operate, manage, franchise, own, lease, develop, license, or provide services to a portfolio of properties, consisting of full service hotels, select service hotels, resorts, and other properties, including ~~branded spas and fitness studios,~~ timeshare, fractional, and other forms of residential, vacation, and condominium ownership units. At ~~September 30, 2020,~~March 31, 2021, (i) we operated or franchised ~~462~~479 full service hotels, comprising ~~158,731~~164,260 rooms throughout the world, (ii) we operated or franchised ~~493~~514 select service hotels, comprising ~~70,562~~73,987 rooms, of which ~~418~~434 hotels are located in the United States, and (iii) weour portfolio included 8 franchised 8 all-inclusive Hyatt-branded resorts, comprising 3,153 rooms. At ~~September 30, 2020,~~March 31, 2021, our portfolio of properties operated in 6768 countries around the world. Additionally, through strategic relationships, we provide certain reservation and/or loyalty program services to hotels that are unaffiliated with our hotel portfolio and operate under other tradenames or marks owned by such hotel or licensed by third parties.

As used in these Notes and throughout this Quarterly Report on Form 10-Q, (i) the terms "Hyatt," "Company," "we," "us," or "our" mean Hyatt Hotels Corporation and its consolidated subsidiaries, (ii) the term ~~"properties"~~"hotel portfolio" refers to our full service hotels, including our wellness resorts, and ~~other~~our select service hotels, (iii) the terms "properties," "portfolio of properties, ~~including branded spas and fitness studios,~~" or "property portfolio" refer to our hotel portfolio; all-inclusive resorts; and residential, vacation, and condominium ownership units that we ~~develop, own,~~ operate, manage, franchise, own, lease, develop, license, or to which we provide services or license our trademarks, ~~(iii) "Hyatt portfolio of properties" or "portfolio of properties" refers to hotels, resorts, and other properties that we develop, own, operate, manage, franchise, license, or provide services to,~~ including under the Park Hyatt, Miraval, Grand Hyatt, Alila, Andaz, The Unbound Collection by Hyatt, Destination by Hyatt, Hyatt Regency, Hyatt, Hyatt Ziva, Hyatt Zilara, Thompson Hotels, Hyatt Centric, Caption by Hyatt, ~~Joie de Vivre,~~JdV by Hyatt, Hyatt House, Hyatt Place, tommie, UrCove, and Hyatt ~~Residence~~Residences Club brands, and ~~Exhale brands,~~ (iv) the term "worldwide hotel portfolio" includes our full service hotels, including our wellness resorts, and our select service hotels, (v) the term "worldwide property portfolio" includes our all-inclusive resorts, branded spas and fitness studios, and residential, vacation, and condominium ownership units in addition to our worldwide hotel portfolio, and (vi) the term "hospitality ventures" refers to entities in the hospitality industry in which we own less than a 100% equity interest.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes required by GAAP for complete annual financial statements. As a result, this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 (the ~~"2019~~"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.

~~Table~~Impact of ~~Contents~~

~~2. IMPACT OF THE~~the COVID-19 ~~PANDEMIC~~

~~Overview~~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 ~~throughout 2020.~~into 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.

~~Financial Impact~~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 ~~evaluate~~are required to make estimates and assumptions that affect the amounts reported in our ~~goodwill~~condensed consolidated financial statements and ~~indefinite-lived intangible assets for impairment annually during the fourth quarter of each year~~accompanying Notes. Our estimates and at interim dates, if indicators of impairment exist. Given the impact the COVID-19 pandemic is having on our industry, we concluded that indicators of impairment existed during the nine months ended September 30, 2020 for certain goodwill reporting units and indefinite-lived intangibles, and we updated our previous cash flow assumptions based on the current demand trends, historical experiences, and our future expectations for these reporting units and indefinite-lived intangibles. Our assumptions are subject to inherent

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risk and uncertainty due to the ongoing impact of the COVID-19 pandemic, ~~on the hospitality industry. Based on~~and actual results could differ materially from our discounted cash flow analyses, the carrying values of certain reporting units were in excess of the fair values, which were determined to be Level Three fair value measurements, and we recognized $38 million of goodwill impairment charges during the nine months ended September 30, 2020 (see Note 8). The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss) within the owned and leased hotels segment. We concluded that there were 0 impairments of indefinite-lived intangible assets during the nine months ended September 30, 2020. We will continue to monitor the impact the COVID-19 pandemic is having on our business and the valuations of our goodwill and indefinite-lived intangible assets.

We evaluate property and equipment, operating lease right-of-use assets, definite-lived intangible assets, and equity method investments for impairment quarterly. For the nine months ended September 30, 2020, we assessed the recoverability of the net book value of property and equipment, operating lease right-of-use assets, and definite-lived intangible assets and determined that the carrying value of certain assets were not fully recoverable. We then estimated the fair value of these assets and determined that the carrying values were in excess of the fair values. Our analyses incorporated cash flow assumptions based on current economic trends, historical experience, and future growth projections, and the fair value measurements were determined to be Level Three fair value measurements. Based on our analyses and contract terminations, during the nine months ended September 30, 2020, we recognized $14 million of impairment charges related to property and equipment, operating lease right-of-use assets, and management agreement intangibles. The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss), primarily within corporate and other. For our equity method investments, we considered the impact of the COVID-19 pandemic on the underlying operations of the investments to determine whether there were any indications that the declines in value were other than temporary and none were identified.

In assessing our financial assets for credit losses, we considered the impact of the COVID-19 pandemic. As a result of our analyses, during the three and nine months ended September 30, 2020, we recognized $6 million and $19 million, respectively, of accounts receivable reserves in selling, general, and administrative expenses on our condensed consolidated statements of income (loss). During the three and nine months ended September 30, 2020, we recognized $7 million and $12 million, respectively, of credit losses related to certain of our held-to-maturity ("HTM") debt securities and financing receivables, of which $1 million and $6 million was offset by interest income recognized in the same periods (see Notes 5 and 6). The credit losses and interest income were both recognized in other income (loss), net on our condensed consolidated statements of income (loss). During the three and nine months ended September 30, 2020, we recognized $1 million and $14 million, respectively, in credit losses related to a debt repayment guarantee, which has not been funded, in other income (loss), net on our condensed consolidated statements of income (loss) (see Note 13). We will continue to monitor our financial assets for potential credit risk as the impact of the COVID-19 pandemic evolves.

amounts.

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3.2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

~~Summary of Significant Accounting Policies~~

Our significant accounting policies are detailed in Part IV, Item 15, "Exhibits and Financial Statement Schedule—Note 2 to our Consolidated Financial Statements" within the 2019 Form 10-K. Upon adoption of Accounting Standards Update No. 2016-13 ("ASU 2016-13"), ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,~~ ~~our accounting policies have been updated as follows:~~

~~Debt and Equity Securities—Excluding equity method investments, debt and equity securities consist of various investments:~~

•Equity securities consist of interest-bearing money market funds, mutual funds, common shares, and preferred shares. Equity securities with a readily determinable fair value are recorded at fair value on our condensed consolidated balance sheets based on listed market prices or dealer quotations where available. Equity securities without a readily determinable fair value are recorded at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Net gains and losses, both realized and unrealized, and impairment charges on equity securities are recognized in other income (loss), net on our condensed consolidated statements of income (loss).

•Debt securities include preferred shares, time deposits, and fixed income securities, including U.S. government obligations, obligations of other government agencies, corporate debt, mortgage-backed and asset-backed securities, and municipal and provincial notes and bonds. Debt securities are classified as trading, available-for-sale ("AFS"), or held-to-maturity.

•Trading securities—recorded at fair value based on listed market prices or dealer price quotations, where available. Net gains and losses, both realized and unrealized, on trading securities are recognized in net gains and interest income from marketable securities held to fund rabbi trusts or other income (loss), net, depending on the nature of the investment, on our condensed consolidated statements of income (loss).

•AFS securities—recorded at fair value based on listed market prices or dealer price quotations, where available. Unrealized gains and losses on AFS debt securities are recognized in accumulated other comprehensive loss on our condensed consolidated balance sheets. Realized gains and losses on AFS debt securities are recognized in other income (loss), net on our condensed consolidated statements of income (loss). AFS securities are assessed quarterly for expected credit losses which are recognized in other income (loss), net on our condensed consolidated statements of income (loss). In determining the reserve for credit losses, we evaluate AFS securities at the individual security level and consider our investment strategy, current market conditions, financial strength of the underlying investments, term to maturity, credit rating, and our intent and ability to sell the securities.

•HTM securities—investments that we have the intent and ability to hold until maturity are recorded at amortized cost, net of expected credit losses. HTM securities are assessed for expected credit losses quarterly, and credit losses are recognized in other income (loss), net on our condensed consolidated statements of income (loss). We evaluate HTM securities individually when determining the reserve for credit losses due to the unique risks associated with each security. In determining the reserve for credit losses, we consider the financial strength of the underlying assets including the current and forecasted performance of the property, term to maturity, credit quality of the owner, and current market conditions.

~~We classify debt securities as current or long-term, based on their contractual maturity dates and our intent and ability to hold.~~

~~Our preferred shares earn a return that is recognized as interest income in other income (loss), net~~.

~~For additional information about debt and equity securities, see Note 5.~~

~~Financing Receivables—Financing receivables represent contractual rights to receive money either on demand or on fixed or determinable dates and are recorded on our condensed consolidated balance sheets at~~

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~~amortized cost, net of expected credit losses. We recognize interest as earned and include accrued interest in the amortized cost basis of the asset.~~

Our financing receivables are composed of individual, unsecured loans and other types of unsecured financing arrangements provided to hotel owners. These financing receivables generally have stated maturities and interest rates, but the repayment terms vary and may be dependent on future cash flows of the hotel. We individually assess all financing receivables for credit losses quarterly and establish a reserve to reflect the net amount expected to be collected. We estimate credit losses based on an analysis of several factors, including current economic conditions, industry trends, and specific risk characteristics of the financing receivable, including capital structure, loan performance, market factors, and the underlying hotel performance. Adjustments to credit losses on financing receivables are recognized in other income (loss), net on our condensed consolidated statements of income (loss).

We evaluate accrued interest allowances separately from the financing receivable assets. On an ongoing basis, we monitor the credit quality of our financing receivables based on historical and expected future payment activity. We determine our financing to hotel owners to be non-performing if interest or principal is greater than 90 days past due based on the contractual terms of the individual financing receivables or if an allowance has been established for our other financing arrangements with that borrower. If we consider a financing receivable to be non-performing, we place the financing receivable on non-accrual status.

For financing receivables on non-accrual status, we recognize interest income in other income (loss), net in our condensed consolidated statements of income (loss) when cash is received. Accrual of interest income is resumed and potential reversal of any associated allowance for credit loss occurs when the receivable becomes contractually current and collection doubts are removed.

After an allowance for credit losses has been established, we may determine the receivable balance is uncollectible when all commercially reasonable means of recovering the receivable balance have been exhausted. We write off uncollectible balances by reversing the financing receivable and the related allowance for credit losses. For additional information about financing receivables, see Note 6.

~~Accounts Receivables~~—Our accounts receivables primarily consist of trade receivables due from guests for services rendered at our owned and leased properties and from hotel owners with whom we have management and franchise agreements for services rendered and for reimbursements of costs incurred on behalf of managed and franchised properties. We assess all accounts receivables for credit losses quarterly and establish a reserve to reflect the net amount expected to be collected. The credit loss reserve is based on an assessment of historical collection activity, the nature of the receivable, geographic considerations, and the current business environment. The allowance for credit losses is recognized in owned and leased hotels expense or selling, general, and administrative expenses on our condensed consolidated statements of income (loss), based on the nature of the receivable.

~~Guarantees~~—We enter into performance guarantees related to certain hotels we manage. We also enter into debt repayment and other guarantees with respect to unconsolidated hospitality ventures, certain managed hotels, and other properties. We record a liability for the fair value of these guarantees at their inception date. In order to estimate the fair value, we use a Monte Carlo simulation to model the probability of possible outcomes. The valuation methodology requires that we make certain assumptions and judgments regarding discount rates, volatility, hotel operating results, and hotel property sales prices. The fair value is not re-valued due to future changes in assumptions. The corresponding offset depends on the circumstances in which the guarantee was issued and is recorded to equity method investments, other assets, or expenses. We amortize the liability for the fair value of a guarantee into income over the term of the guarantee using a systematic and rational, risk-based approach. Guarantees related to our managed hotels and other properties are amortized into income in other income (loss), net in our condensed consolidated statements of income (loss). Guarantees related to our unconsolidated hospitality ventures are amortized into equity earnings (losses) from unconsolidated hospitality ventures in our condensed consolidated statements of income (loss).

•Performance and other guarantees—On a quarterly basis, we evaluate the likelihood of funding under a guarantee. To the extent we determine an obligation to fund is both probable and estimable based on performance during the period, we record a separate contingent liability with the offset recognized in other income (loss), net.

•Debt repayment guarantees—At inception of the guarantee and on a quarterly basis, we evaluate the risk of funding under a guarantee. We assess credit risk based on the current and forecasted performance of the underlying property, whether the property owner is current on debt service, the historical performance of the

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underlying property, and the current market, and we record a separate liability with an offset recognized in other income (loss), net or equity earnings (losses) from unconsolidated hospitality ventures as necessary.

~~For additional information about guarantees, see Note~~13.

~~Adopted Accounting Standards~~

~~Financial Instruments~~—~~Credit Losses~~—In June 2016, the Financial Accounting Standards Board ("FASB") released ASU 2016-13. ASU 2016-13 replaces the existing impairment model for most financial assets from an incurred loss model to a current expected credit loss model, which requires an entity to recognize allowances for credit losses equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires credit losses relating to AFS debt securities to be recognized through an allowance for credit losses. We adopted ~~ASU 2016-13~~ on January 1, 2020 utilizing the modified retrospective approach. Upon adoption, we recorded an adjustment of $1 million, net of tax, to opening retained earnings related to our credit loss for accounts receivables, a $12 million increase to our HTM debt securities, and a corresponding $12 million credit loss allowance on our condensed consolidated balance sheets. The adoption of ASU 2016-03 did not materially affect our condensed consolidated statements of income (loss) or our condensed consolidated statements of cash flows, and the adoption adjustments do not reflect the impact of the COVID-19 pandemic, see Note 2.

Future Adoption of Accounting Standards

Reference Rate Reform—In March 2020, the ~~FASB~~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 ~~interbank offered rate~~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 ~~relief provided in~~provisions of ASU 2020-04 ~~is applicable to all entities, but is~~are only available through December 31, 2022. We are ~~still~~currently assessing the impact of adopting ASU 2020-04.

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4.3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated Revenues

The following tables present our revenues disaggregated by the nature of the product or service:


		Three Months Ended September 30, 2020															Three Months Ended March 31, 2021
		Owned and leased hotels		Americas management and franchising		ASPAC management and franchising		EAME/SW Asia management and franchising		Corporate and other		Eliminations		Total			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	Rooms revenues	$	43	$	0	$	0	$	0	$	0	$	(2)	$	41	Rooms revenues	$	62	$	0	$	0	$	0	$	0	$	(3)	$	59
Food and beverage	Food and beverage	20		0		0		0		0		0		20		Food and beverage	20		0		0		0		0		0		20
Other	Other	19		0		0		0		0		0		19		Other	25		0		0		0		0		0		25

Owned and leased hotels	Owned and leased hotels	82		0		0		0		0		(2)		80		Owned and leased hotels	107		0		0		0		0		(3)		104

Base management fees	Base management fees	0		12		7		2		0		(2)		19		Base management fees	0		16		8		3		0		(3)		24
Incentive management fees	Incentive management fees	0		0		5		2		0		(1)		6		Incentive management fees	0		1		5		2		0		0		8
Franchise fees	Franchise fees	0		15		0		0		0		0		15		Franchise fees	0		17		0		0		0		0		17
Other fees	Other fees	0		1		4		1		1		0		7		Other fees	0		4		2		2		6		0		14
License fees		0		1		1		0		3		0		5

Management, franchise, and other fees	Management, franchise, and other fees	0		29		17		5		4		(3)		52		Management, franchise, and other fees	0		38		15		7		6		(3)		63
Amortization of management and franchise agreement assets constituting payments to customers		0		(5)		0		(2)		0		0		(7)
Contra revenue																Contra revenue	0		(4)		(1)		(3)		0		0		(8)
Net management, franchise, and other fees	Net management, franchise, and other fees	0		24		17		3		4		(3)		45		Net management, franchise, and other fees	0		34		14		4		6		(3)		55

Other revenues	Other revenues	0		4		0		0		3		0		7		Other revenues	0		17		0		0		2		0		19

Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		234		18		14		1		0		267		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		227		20		13		0		0		260

Total	Total	$	82	$	262	$	35	$	17	$	8	$	(5)	$	399	Total	$	107	$	278	$	34	$	17	$	8	$	(6)	$	438

117

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		Nine Months Ended September 30, 2020															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			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	Rooms revenues	$	236	$	0	$	0	$	0	$	0	$	(10)	$	226	Rooms revenues	$	185	$	0	$	0	$	0	$	0	$	(7)	$	178
Food and beverage	Food and beverage	128		0		0		0		0		0		128		Food and beverage	105		0		0		0		0		0		105
Other	Other	68		0		0		0		0		0		68		Other	40		0		0		0		0		0		40

Owned and leased hotels	Owned and leased hotels	432		0		0		0		0		(10)		422		Owned and leased hotels	330		0		0		0		0		(7)		323

Base management fees	Base management fees	0		60		16		10		0		(12)		74		Base management fees	0		44		6		7		0		(10)		47
Incentive management fees	Incentive management fees	0		1		8		4		0		(1)		12		Incentive management fees	0		4		3		2		0		(1)		8
Franchise fees	Franchise fees	0		47		1		0		0		0		48		Franchise fees	0		27		0		0		0		0		27
Other fees	Other fees	0		3		8		3		2		0		16		Other fees	0		9		10		1		6		0		26
License fees		0		10		9		0		11		0		30

Management, franchise, and other fees	Management, franchise, and other fees	0		121		42		17		13		(13)		180		Management, franchise, and other fees	0		84		19		10		6		(11)		108
Amortization of management and franchise agreement assets constituting payments to customers		0		(13)		(2)		(5)		0		0		(20)
Contra revenue																Contra revenue	0		(4)		(1)		(1)		0		0		(6)
Net management, franchise, and other fees	Net management, franchise, and other fees	0		108		40		12		13		(13)		160		Net management, franchise, and other fees	0		80		18		9		6		(11)		102

Other revenues	Other revenues	0		33		0		0		12		0		45		Other revenues	0		27		0		0		8		0		35

Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		904		62		46		3		0		1,015		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		484		27		20		2		0		533

Total	Total	$	432	$	1,045	$	102	$	58	$	28	$	(23)	$	1,642	Total	$	330	$	591	$	45	$	29	$	16	$	(18)	$	993

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Three Months Ended September 30, 2019
Owned and leased hotels (a) Americas management and franchising (a) ASPAC management and franchising EAME/SW Asia management and franchising Corporate and other (a) Eliminations (a) Total
Rooms revenues $ 263 $ 0 $ 0 $ 0 $ 0 $ (11) $ 252
Food and beverage 134 0 0 0 0 0 134
Other 44 0 0 0 0 0 44
Owned and leased hotels 441 0 0 0 0 (11) 430
Base management fees 0 56 11 10 0 (13) 64
Incentive management fees 0 13 17 9 0 (6) 33
Franchise fees 0 36 1 0 0 0 37
Other fees 0 2 3 2 1 0 8
License fees 0 1 0 0 5 0 6
Management, franchise, and other fees 0 108 32 21 6 (19) 148
Amortization of management and franchise agreement assets constituting payments to customers 0 (4) 0 (1) 0 0 (5)
Net management, franchise, and other fees 0 104 32 20 6 (19) 143
Other revenues 0 16 0 0 9 0 25
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 0 565 30 20 2 0 617
Total $ 441 $ 685 $ 62 $ 40 $ 17 $ (30) $ 1,215
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).

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Nine Months Ended September 30, 2019
Owned and leased hotels (a) Americas management and franchising (a) ASPAC management and franchising EAME/SW Asia management and franchising Corporate and other (a) Eliminations (a) Total
Rooms revenues $ 821 $ 0 $ 0 $ 0 $ 0 $ (27) $ 794
Food and beverage 461 0 0 0 0 0 461
Other 135 0 0 0 0 0 135
Owned and leased hotels 1,417 0 0 0 0 (27) 1,390
Base management fees 0 175 33 27 0 (40) 195
Incentive management fees 0 46 51 26 0 (17) 106
Franchise fees 0 104 3 0 0 0 107
Other fees 0 3 9 5 4 0 21
License fees 0 3 0 0 15 0 18
Management, franchise, and other fees 0 331 96 58 19 (57) 447
Amortization of management and franchise agreement assets constituting payments to customers 0 (11) (1) (4) 0 0 (16)
Net management, franchise, and other fees 0 320 95 54 19 (57) 431
Other revenues 0 71 0 0 26 1 98
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 0 1,688 80 54 4 0 1,826
Total $ 1,417 $ 2,079 $ 175 $ 108 $ 49 $ (83) $ 3,745
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).

Contract Balances

Our contract assets, included in receivables, net on our condensed consolidated balance sheets, were insignificant at both ~~at September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. As our profitability hurdles are generally calculated on a full-year basis, we expect our contract assets to be insignificant ~~through~~at year end.

Contract liabilities ~~are~~were comprised of the following:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Deferred revenue related to the loyalty program	Deferred revenue related to the loyalty program	$	723	$	671	Deferred revenue related to the loyalty program	$	752	$	733
Advanced deposits	Advanced deposits	38		77		Advanced deposits	55		44
Initial fees received from franchise owners	Initial fees received from franchise owners	41		41		Initial fees received from franchise owners	41		41
Deferred revenue related to system-wide services		7		5
Deferred revenue related to insurance programs						Deferred revenue related to insurance programs	33		47
Other deferred revenue	Other deferred revenue	80		126		Other deferred revenue	79		76
Total contract liabilities	Total contract liabilities	$	889	$	920	Total contract liabilities	$	960	$	941

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The following table summarizes the activity in our contract liabilities:


		2020		2019			2021		2020
Beginning balance, January 1	Beginning balance, January 1	$	920	$	830	Beginning balance, January 1	$	941	$	920
Cash received and other	Cash received and other	311		490		Cash received and other	105		246
Revenue recognized	Revenue recognized	(336)		(459)		Revenue recognized	(86)		(262)
Ending balance, June 30		895		861
Cash received and other		114		265
Revenue recognized		(120)		(251)
Ending balance, September 30		$	889	$	875
Ending balance, March 31						Ending balance, March 31	$	960	$	904

Revenue recognized during the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ included in the contract liabilities balance at the beginning of each year was ~~$57~~$69 million and $80 million, respectively. Revenue recognized during the nine months ended September 30, 2020 and September 30, 2019 included in the contract liabilities balance at the beginning of the year was $215 million and $318$137 million, respectively. This revenue primarily relates to the loyalty program, which is recognized net of redemption reimbursements paid to third parties.

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Revenue Allocated to Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted revenue expected to be recognized in future periods was approximately ~~$125~~$120 million at ~~September 30, 2020,~~March 31, 2021, of which we expect to recognize approximately 10% asof the revenue over the next 12 months and the remainder thereafter.

~~We did not estimate revenues expected to be recognized related to our unsatisfied performance obligations for the following:~~

•~~Deferred revenue related to the loyalty program and revenue from base and incentive management fees as the revenue is allocated to a wholly unperformed performance obligation in a series;~~

•~~Revenues related to royalty fees as they are considered sales-based royalty fees;~~

•~~Revenues received for free nights granted through our co-branded credit cards as the awards have an original duration of 12 months; and~~

•~~Revenues related to advanced bookings at owned and leased hotels as each stay has a duration of 12 months or less.~~

5.4. DEBT AND EQUITY SECURITIES

Equity Method Investments

Equity method investments were $259 million and $260 million ~~and $232 million~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

During the nine months ended September 30, 2019, we recognized $8 million of gains in equity losses from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss) resulting from sales activity related to certain equity method investments within our owned and leased hotels segment. During the three and nine months ended September 30, 2019, we received $2 million and $25 million of related sales proceeds, respectively.

During the three and nine months ended September 30, 2019, we recognized $6 million and $7 million of impairment charges, respectively, primarily related to one unconsolidated hospitality venture in equity losses from unconsolidated hospitality ventures on our condensed consolidated statements of income (loss) as the carrying value was in excess of fair value. The fair value was determined to be a Level Three fair value measure, and the impairment was deemed other-than-temporary.

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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,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Total revenues	Total revenues	$	27	$	130	$	211	$	371	Total revenues	$	31	$	117
Gross operating profit (loss)	Gross operating profit (loss)	(11)		51		34		139		Gross operating profit (loss)	(6)		34
Income (loss) from continuing operations		(57)		9		(143)		(2)
Net income (loss)		(57)		9		(143)		(2)
Loss from continuing operations										Loss from continuing operations	(43)		(7)
Net loss										Net loss	(43)		(7)

~~The information above is based~~During the three months ended March 31, 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 ~~most recently available financial~~property. We recognized a $69 million pre-tax gain in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements ~~which are reported on a lag~~ of ~~up to three months for certain of our equity method investments.~~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 ~~and included~~ on our condensed consolidated balance sheets, were as follows:

September 30, 2020 December 31, 2019
Loyalty program (Note 9) $ 556 $ 483
Deferred compensation plans held in rabbi trusts (Note 9 and Note 11) 464 450
Captive insurance companies (Note 9) 158 180
Total marketable securities held to fund operating programs 1,178 1,113
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents, short-term investments, and prepaids and other assets (182) (219)
Marketable securities held to fund operating programs included in other assets $ 996 $ 894


	March 31, 2021		December 31, 2020
Loyalty program (Note 8)	$	566	$	567
Deferred compensation plans held in rabbi trusts (Note 8 and Note 10)	524		511
Captive insurance company (Note 8)	216		226
Total marketable securities held to fund operating programs	$	1,306	$	1,304
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents and short-term investments	(208)		(238)
Marketable securities held to fund operating programs included in other assets	$	1,098	$	1,066

Marketable securities held to fund operating programs include $107 million and $82 million of available-for-sale ("AFS") debt securities at March 31, 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 $86 million and $70 million of equity securities with a readily determinable fair value at March 31, 2021 and December 31, 2020, respectively.

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Net unrealized and realized ~~and unrealized~~ gains ~~and interest income~~(losses) from marketable securities held to fund ~~the loyalty program are~~operating programs recognized ~~in other income (loss), net~~ on our condensed consolidated statements of income (loss): were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Loyalty program (Note 19) $ 3 $ 5 $ 26 $ 24

Net realized and unrealized gains (losses) and interest income from marketable securities held to fund rabbi trusts are recognized in net gains and interest income from marketable securities held to fund rabbi trusts on our condensed consolidated statements of income (loss):

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Unrealized gains (losses) $ 16 $ (2) $ 11 $ 35
Realized gains 6 2 12 6
Net gains and interest income from marketable securities held to fund rabbi trusts $ 22 $ 0 $ 23 $ 41

Our captive insurance companies hold marketable securities which include AFS debt securities that are invested in U.S. government agencies, time deposits, and corporate debt securities and have contractual maturity dates ranging from 2020 through 2025.

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	Three Months Ended March 31,
	2021		2020
Unrealized gains (losses), net
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts	$	3	$	(50)
Other income (loss), net (Note 18)	(9)		2
Other comprehensive loss (Note 13)	(1)		0

Realized gains (losses), net
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts	$	9	$	2
Other income (loss), net (Note 18)	0		1

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, ~~and are included~~ on our condensed consolidated balance sheets, were as follows:

September 30, 2020 December 31, 2019
Interest-bearing money market funds (a) $ 763 $ 147
Time deposits (a) 288 37
Common shares of Playa N.V. (Note 9) 51 102
Total marketable securities held for investment purposes 1,102 286
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments (1,051) (184)
Marketable securities held for investment purposes included in other assets $ 51 $ 102
(a) A portion of proceeds from our senior notes issuances during the nine months ended September 30, 2020 were reinvested in interest-bearing money market funds and time deposits at September 30, 2020 (see Note 10).


	March 31, 2021		December 31, 2020
Time deposits	$	539	$	657
Interest-bearing money market funds	134		107
Common shares of Playa N.V. (Note 8)	89		72
Total marketable securities held for investment purposes	$	762	$	836
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments	(673)		(764)
Marketable securities held for investment purposes included in other assets	$	89	$	72

We hold common shares of Playa Hotels & Resorts N.V. ("Playa N.V.") which are accounted for as an equity security with a readily determinable fair value as we do not have the ability to significantly influence the operations of the entity. The fair value of the common shares is classified as Level One in the fair value hierarchy as we are able to obtain market available pricing information. The remeasurement of our investment at fair value resulted in $7 million and $1 million of unrealized gains for the three months ended September 30, 2020 and September 30, 2019, respectively, and $51 million of unrealized losses and $8 million of unrealized gains for the nine months ended September 30, 2020 and September 30, 2019, respectively, recognized in other income (loss), net on our condensed consolidated statements of income (loss) (see Note~~19).~~ We did 0t sell any shares of common stock during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 or March 31, 2020. Net unrealized gains (losses) recognized on our condensed consolidated statements of income (loss) were as follows:


	Three Months Ended March 31,
	2021		2020
Other income (loss), net (Note 18)	$	17	$	(81)

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Fair Value—We measure marketable securities held to fund operating programs and held for investment purposes at fair value on a recurring basis:


	March 31, 2021		Cash and cash equivalents		Short-term investments		Other assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds	$	330	$	330	$	0	$	0
Mutual funds	610		0		0		610
Common shares in Playa N.V.	89		0		0		89
Level Two - Significant Other Observable Inputs

Time deposits	546		1		540		5
U.S. government obligations	215		0		1		214
U.S. government agencies	65		0		0		65
Corporate debt securities	151		0		9		142
Mortgage-backed securities	24		0		0		24
Asset-backed securities	31		0		0		31
Municipal and provincial notes and bonds	7		0		0		7
Total	$	2,068	$	331	$	550	$	1,187


	December 31, 2020		Cash and cash equivalents		Short-term investments		Other assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds	$	327	$	327	$	0	$	0
Mutual funds	581		0		0		581
Common shares in Playa N.V.	72		0		0		72
Level Two - Significant Other Observable Inputs
Time deposits	662		0		659		3
U.S. government obligations	208		0		3		205
U.S. government agencies	65		0		0		65
Corporate debt securities	159		0		13		146
Mortgage-backed securities	24		0		0		24
Asset-backed securities	35		0		0		35
Municipal and provincial notes and bonds	7		0		0		7
Total	$	2,140	$	327	$	675	$	1,138

During the three months ended March 31, 2021 and March 31, 2020, there were no transfers between levels of the fair value hierarchy. We do not have non-financial assets or ~~September 30, 2019.~~non-financial liabilities required to be measured at fair value on a recurring basis.

Other Investments

HTM Debt Securities—~~At September 30, 2020 and December 31, 2019, we held $80 million and $58 million, respectively, of~~We hold investments in ~~HTM~~held-to-maturity ("HTM") debt securities, ~~net of allowances,~~ which are investments in third-party entities that own or are developing certain of our ~~hotels~~hotels. The securities are mandatorily redeemable

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between 2021 and ~~are~~2027. At March 31, 2021 and December 31, 2020, HTM debt securities recorded within other assets on our condensed consolidated balance ~~sheets.~~ sheets were as follows:


	March 31, 2021		December 31, 2020
HTM debt securities	$	103	$	102
Less: allowance for credit losses	(22)		(21)
Total HTM debt securities, net of allowances	$	81	$	81

The ~~securities are mandatorily redeemable between 2021 and 2027. At September 30, 2020,~~following table summarizes the activity in our ~~investments were net of allowances of $20 million. The carrying value of our investments approximates fair value.~~ HTM debt security allowance for credit losses:


	2021		2020
Allowance at January 1	$	21	$	12
Credit losses (a)	1		3
Allowance at March 31	$	22	$	15
(a) Credit losses were offset by interest income recognized in the same periods. The credit losses and interest income were both recognized in other income (loss), net on our condensed consolidated statements of income (loss).

We estimated the fair value of ~~our investments~~HTM debt securities to be approximately $103 million and $100 million at March 31, 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. ~~Based on the lack of available market data, our investments are classified as Level Three within the fair value hierarchy.~~ The primary sensitivity in these models is based on the selection of appropriate discount rates. Fluctuations in these assumptions could result in different estimates of fair value.

Equity Securities Without a Readily Determinable Fair Value—At ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019,~~2020, we held $12 ~~million and $7~~ million of investments in equity securities without a readily determinable fair value, which represent investments in entities where we do not have the ability to significantly influence the operations of the entity.

5. RECEIVABLES

Accounts Receivable

At March 31, 2021 and December 31, 2020, we had $340 million and $316 million of net receivables, respectively, on our condensed consolidated balance sheets.

The following table summarizes the activity in our accounts receivable allowance for credit losses:


	2021		2020
Allowance at January 1	$	56	$	34

Provisions	1		3
Other	0		1
Allowance at March 31	$	57	$	38

Financing Receivables


	March 31, 2021		December 31, 2020
Unsecured financing to hotel owners	$	144	$	145
Less: current portion of financing receivables, included in receivables, net	(5)		(2)
Less: allowance for credit losses	(115)		(114)
Total long-term financing receivables, net of allowances	$	24	$	29

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~~Fair Value—We measured the following financial assets at fair value on a recurring basis:~~

September 30, 2020 Cash and cash equivalents Short-term investments Prepaids and other assets Other assets
Level One - Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds $ 920 $ 920 $ 0 $ 0 $ 0
Mutual funds 530 0 0 0 530
Common shares 51 0 0 0 51
Level Two - Significant Other Observable Inputs
Commercial paper 1 1 0 0 0
Time deposits 294 2 287 0 5
U.S. government obligations 204 0 6 0 198
U.S. government agencies 52 0 2 0 50
Corporate debt securities 168 0 15 0 153
Mortgage-backed securities 23 0 0 0 23
Asset-backed securities 32 0 0 0 32
Municipal and provincial notes and bonds 5 0 0 0 5
Total $ 2,280 $ 923 $ 310 $ 0 $ 1,047

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 $ 0 $ 0 $ 0
Mutual funds 502 0 0 0 502
Common shares 102 0 0 0 102
Level Two - Significant Other Observable Inputs
Time deposits 47 0 41 0 6
U.S. government obligations 202 0 4 31 167
U.S. government agencies 50 0 3 6 41
Corporate debt securities 161 0 20 18 123
Mortgage-backed securities 23 0 0 4 19
Asset-backed securities 39 0 0 6 33
Municipal and provincial notes and bonds 4 0 0 1 3
Total $ 1,399 $ 269 $ 68 $ 66 $ 996

During the three and nine months ended September 30, 2020 and September 30, 2019, there were no transfers between levels of the fair value hierarchy. We do not have non-financial assets or non-financial liabilities required to be measured at fair value on a recurring basis.

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~~6. FINANCING RECEIVABLES~~

September 30, 2020 December 31, 2019
Unsecured financing to hotel owners $ 143 $ 135
Less: current portion of financing receivables, included in receivables, net (1) 0
Less: allowance for losses (110) (100)
Total long-term financing receivables, net of allowances $ 32 $ 35

Allowance for Credit Losses—The following table summarizes the activity in our unsecured financing receivables allowance:


		2020		2019			2021		2020
Allowance at January 1	Allowance at January 1	$	100	$	101	Allowance at January 1	$	114	$	100
Provisions						Provisions	3		2

Foreign currency exchange, net						Foreign currency exchange, net	(2)		(3)
Allowance at March 31						Allowance at March 31	$	115	$	99

Provisions		5		3
Write-offs		0		(4)

Allowance at June 30		105		100
Provisions		5		1
Foreign currency exchange, net		0		(1)

Allowance at September 30		$	110	$	100

Credit Monitoring—Our unsecured financing receivables were as follows:


		September 30, 2020									March 31, 2021
		Gross loan balance (principal and interest)		Related allowance		Net financing receivables		Gross receivables on non-accrual status			Gross loan balance (principal and interest)		Related allowance		Net financing receivables		Gross receivables on nonaccrual status
Loans	Loans	$	32	$	(1)	$	31	$	0	Loans	$	29	$	(1)	$	28	$	0
Impaired loans (1)	Impaired loans (1)	46		(46)		0		46		Impaired loans (1)	53		(53)		0		53
Total loans	Total loans	78		(47)		31		46		Total loans	82		(54)		28		53
Other financing arrangements	Other financing arrangements	65		(63)		2		61		Other financing arrangements	62		(61)		1		59
Total unsecured financing receivables	Total unsecured financing receivables	$	143	$	(110)	$	33	$	107	Total unsecured financing receivables	$	144	$	(115)	$	29	$	112

(1) The unpaid principal balance was ~~$36~~$42 million and the average recorded loan balance was ~~$45~~$53 million at ~~September 30, 2020.~~March 31, 2021.


		December 31, 2019									December 31, 2020
		Gross loan balance (principal and interest)		Related allowance		Net financing receivables		Gross receivables on non-accrual status			Gross loan balance (principal and interest)		Related allowance		Net financing receivables		Gross receivables on non-accrual status
Loans	Loans	$	33	$	(1)	$	32	$	0	Loans	$	30	$	(1)	$	29	$	0
Impaired loans (2)	Impaired loans (2)	43		(43)		0		43		Impaired loans (2)	53		(53)		0		53
Total loans	Total loans	76		(44)		32		43		Total loans	83		(54)		29		53
Other financing arrangements	Other financing arrangements	59		(56)		3		56		Other financing arrangements	62		(60)		2		58
Total unsecured financing receivables	Total unsecured financing receivables	$	135	$	(100)	$	35	$	99	Total unsecured financing receivables	$	145	$	(114)	$	31	$	111

(2) The unpaid principal balance was ~~$33~~$42 million and the average recorded loan balance was ~~$46~~$48 million at December 31, ~~2019.~~2020.

Fair Value—~~The carrying~~We estimated the fair value of ~~our~~ financing receivables ~~approximates fair value.~~to be approximately $47 million and $44 million at March 31, 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.

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7.6. ACQUISITIONS AND DISPOSITIONS

Acquisitions

~~Land~~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 three months ended March 31, 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 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	$	6
Repayment of third-party mortgage loan	78
Fair value of our previously held equity method investment	6
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.

Dispositions

Hyatt Centric Center City Philadelphia—During the ~~nine~~three months ended ~~September 30, 2019, we acquired $15 million of land through an asset acquisition from~~March 31, 2020, an unrelated third party ~~to develop a hotel in Austin, Texas and subsequently sold the land and related construction in progress through an asset disposition during the year ended December 31, 2019.~~

~~Dispositions~~

~~Property Under Development—During the nine months ended September 30, 2020, an unrelated third-party~~ invested in certain of our subsidiaries that ~~are developing a hotel,~~developed Hyatt Centric Center City Philadelphia and adjacent parking and retail space in ~~Philadelphia, Pennsylvania in~~ exchange for a ~~60%~~58% ownership interest, resulting in the derecognition of the ~~non-financial~~nonfinancial assets of the subsidiaries. As a result of the transaction, we received $72 million of proceeds, recorded our ~~40%~~42% ownership interest as an equity method investment, and recognized a $4 million pre-tax gain in gains on sales of real estate on our condensed consolidated statements of income (loss) during the ~~nine~~three months ended ~~September 30,~~March 31, 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~~three months ended ~~September 30,~~March 31, 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 ~~for which~~and recorded a $4 million operating lease right-of-use asset and related lease liability ~~were recorded~~ 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 on our condensed consolidated statements of income (loss) during the ~~nine~~three months ended ~~September 30,~~March 31, 2020. ~~The~~At March 31, 2020, the operating lease ~~has~~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.

~~Hyatt Regency Atlanta~~—During the three months ended September 30, 2019, we sold Hyatt Regency Atlanta to an unrelated third party for approximately $346 million, net of closing costs and proration adjustments, and accounted for the transaction as an asset disposition. We entered into a long-term management agreement for the property upon sale. The sale resulted in a $272 million pre-tax gain which was recognized in gains on sales of real estate on our condensed consolidated statements of income (loss) during the three and nine months ended September 30, 2019. The operating results and financial position of this hotel prior to the sale remain within our owned and leased hotels segment.

~~Land and Lease Assignment~~—During the three months ended September 30, 2019, we sold the property adjacent to Grand Hyatt San Francisco and assigned the related Apple store lease to an unrelated third party for approximately $115 million, net of closing costs and proration adjustments, and accounted for the transaction as an asset disposition. The sale resulted in a $101 million pre-tax gain which was recognized in gains on sales of real estate on our condensed consolidated statements of income (loss) during the three and nine months ended September 30, 2019. The operating results and financial position of this property prior to the sale remain within our owned and leased hotels segment.

Like-Kind Exchange Agreements

Periodically, we enter into like-kind exchange agreements ~~associated with~~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.

In conjunction with the sale of the property adjacent to Grand Hyatt San Francisco during the three months ended September 30, 2019, $115 million of proceeds were held as restricted for use in a potential like-kind exchange. However, we did not acquire the identified replacement property within the specified 180 day period, and the proceeds were released during the nine months ended September 30, 2020.

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~~8. GOODWILL AND~~7. INTANGIBLES, NET

September 30, 2020 December 31, 2019
Goodwill $ 288 $ 326

During the nine months ended September 30, 2020, we recognized $38 million of goodwill impairment charges related to 2 reporting units (see Note 2). During the nine months ended September 30, 2019, we did 0t recognize any goodwill impairment charges.

September 30, 2020 Weighted-
average useful
lives in years December 31, 2019
Management and franchise agreement intangibles $ 362 18 $ 367
Brand and other indefinite-lived intangibles 144 — 144
Advanced booking intangibles 6 3 14
Other definite-lived intangibles 8 6 8
Intangibles 520 533
Less: accumulated amortization (108) (96)
Intangibles, net $ 412 $ 437

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Amortization expense $ 7 $ 8 $ 21 $ 18


	March 31, 2021		Weighted- average useful lives in years	December 31, 2020
Management and franchise agreement intangibles	$	354	18	$	354

Brand and other indefinite-lived intangibles	130		—	130
Advanced booking intangibles	6		3	6
Other definite-lived intangibles	8		6	8
Intangibles	498			498
Less: accumulated amortization	(120)			(113)
Intangibles, net	$	378		$	385

During the nine months ended September 30, 2020, we recognized $4 million of impairment charges related to management agreement intangibles for contracts that terminated. During the three and nine months ended September 30, 2019, we recognized $9 million and $13 million of impairment charges related to management agreement intangibles, respectively, for contracts that terminated. The impairment charges were recognized in asset impairments on our condensed consolidated statements of income (loss), primarily within our Americas management and franchising segment.


	Three Months Ended March 31,
	2021		2020
Amortization expense	$	7	$	7

8. OTHER ASSETS


	March 31, 2021		December 31, 2020
Marketable securities held to fund rabbi trusts (Note 4)	$	524	$	511
Management and franchise agreement assets constituting payments to customers (1)	471		470
Marketable securities held to fund the loyalty program (Note 4)	432		441
Marketable securities held for captive insurance company (Note 4)	142		114
Long-term investments (Note 4)	93		93
Common shares of Playa N.V. (Note 4)	89		72
Other	105		96
Total other assets	$	1,856	$	1,797
(1) Includes cash consideration as well as other forms of consideration provided, such as debt repayment or performance guarantees.

9. ~~OTHER ASSETS~~

September 30, 2020 December 31, 2019
Marketable securities held to fund rabbi trusts (Note 5) $ 464 $ 450
Management and franchise agreement assets constituting payments to customers (1) 448 423
Marketable securities held to fund the loyalty program (Note 5) 434 347
Marketable securities held for captive insurance companies (Note 5) 98 97
Long-term investments (Note 5) 92 65
Common shares of Playa N.V. (Note 5) 51 102
Other 102 104
Total other assets $ 1,689 $ 1,588
(1) Includes cash consideration as well as other forms of consideration provided, such as debt repayment or performance guarantees.

~~10.~~ DEBT

Long-term debt ~~net of current maturities,~~ was ~~$2,981~~$2,982 million and ~~$1,612~~$2,984 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~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. We received approximately $745 million of net proceeds from the sale, after deducting $5 million of underwriting discounts and other offering expenses, which we intend to use for general corporate purposes. Interest on the 2022 Notes is payable quarterly on March 1, June 1, September 1, and December 1 of each year, beginning on December 1, 2020.

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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 the issuance of the 2025 Notes and the 2030 Notes to repay all outstanding borrowings on our revolving credit facility and settle the outstanding interest rate locks, and we intend to use the remainder for general corporate purposes. Interest on the 2025 Notes and 2030 Notes is payable semi-annually on April 23 and October 23 of each year, beginning on October 23, 2020.

Revolving Credit Facility—During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we entered into a ~~Second~~Third Amendment to the Second Amended and Restated Credit Agreement (the "Revolver Amendment"). ~~Terms~~The Revolver Amendment (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 Revolver Amendment ~~include, but are not limited~~also included an option, at our election, to ~~waivers~~extend the maturity date of $1.45 billion of revolving credit commitments by one year on ~~certain covenants and modifications to negative covenants and other~~the terms ~~including~~specified in the ~~interest rate.~~Revolver Amendment. The terms of the Revolver Amendment ~~also~~ restrict, among other things, our ability to repurchase shares and pay dividends ~~through~~until the first quarter of ~~2021.~~2022. The $1.5 billion aggregate commitment amount under our revolving credit facility remains unchanged.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, we had 0 borrowings or repayments on our revolving credit facility. During the three months ended March 31, 2020, we had $400 million of borrowings and $50 million of repayments on our revolving credit facility. The weighted-average interest rate on these borrowings was ~~1.71%~~1.66% at ~~September 30,~~March 31, 2020. At ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019,~~2020, we had 0 balance outstanding. At ~~September 30, 2020,~~March 31, 2021, we had $1,499 million of borrowing capacity available under our revolving credit facility, net of letters of credit outstanding.

Fair Value—We estimated the fair value of debt, excluding finance ~~leases,~~lease obligations, which consists of ~~$250 million of 5.375% senior~~the notes due 2021 (the "2021 Notes"), the 2022 Notes, $350 million of 3.375% senior notes due 2023 (the "2023 Notes"), the 2025 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"), and the 2030 Notes,below, collectively referred to as the "Senior Notes," bonds, and other long-term debt.

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•$250 million of 5.375% senior notes due 2021 (the "2021 Notes")

•$750 million of three-month LIBOR plus 3.000% senior notes due 2022 (the "2022 Notes")

•$350 million of 3.375% senior notes due 2023 (the "2023 Notes")

•$450 million of 5.375% senior notes due 2025 (the "2025 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")

•$450 million of 5.750% senior notes due 2030 (the "2030 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 ~~these~~our assumptions will result in different estimates of fair value.

September 30, 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) $ 3,259 $ 3,435 $ 0 $ 3,395 $ 40


	March 31, 2021
	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)	$	3,257	$	3,499	$	0	$	3,461	$	38

(1) Excludes $9 million of finance lease obligations and ~~$27~~$24 million of unamortized discounts and deferred financing fees.

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 $ 0 $ 1,680 $ 60


	December 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 (2)	$	3,261	$	3,561	$	0	$	3,518	$	43

(2) Excludes ~~$11~~$9 million of finance lease obligations and ~~$15~~$26 million of unamortized discounts and deferred financing fees.

Interest Rate Locks—At both March 31, 2021 and December 31, ~~2019,~~2020, we had 0 outstanding interest rate ~~locks with $275~~locks. During the three months ended March 31, 2020, we recognized $34 million of pre-tax losses in ~~notional value and mandatory settlement dates of 2021.~~ The interest rate locks hedged a portion of the risk of changes in the benchmark interest rate associated with long-term debt we anticipated issuing in the future. These derivative instruments were designated as cash flow hedges and deemed highly effective both at inception and upon settlement, as discussed below.

~~At December 31, 2019, we had $24 million related to these instruments recorded in other long-term liabilities~~unrealized gains (losses) on our condensed consolidated ~~balance sheets. We estimated the fair values~~statements of ~~interest rate locks, which~~comprehensive loss related to derivative instruments that were ~~classified as Level Two~~settled in ~~the fair value hierarchy, using discounted cash flow models. The primary sensitivities in these models were the forward and discount curves.~~

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~~During the nine months ended September 30, 2020,~~April 2020. Upon settlement, we ~~settled the aforementioned interest rate locks for~~recorded a $61 million ~~upon issuance of the 2030 Notes. The $61 million, which was recorded to~~loss within accumulated other comprehensive loss. This loss is amortized ~~over the term of the 2030 Notes to~~into interest expense on our condensed consolidated statements of income (loss)~~. As a result, we recognized~~ over the term of the 2030 Notes and resulted in $2 ~~million and $3~~ million of interest expense recognized during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 (see Note ~~14)~~13). The $61 million settlement is reflected as a cash outflow from operating activities on the condensed consolidated statement of cash flows for the nine months ended September 30, 2020, as our policy is to classify cash flows from derivative instruments in the same category as the item being hedged.

During the three and nine months ended September 30, 2020, we recognized $0 and $37 million of pre-tax losses, respectively, in unrealized gains (losses) on derivative activity on our condensed consolidated statements of comprehensive income (loss).

During the three and nine months ended September 30, 2019, we recognized $13 million and $30 million of pre-tax losses, respectively, in unrealized gains (losses) on derivative activity on our condensed consolidated statements of comprehensive income (loss).

~~11.~~10. OTHER LONG-TERM LIABILITIES

September 30, 2020 December 31, 2019
Deferred compensation plans funded by rabbi trusts (Note 5) $ 464 $ 450
Income taxes payable 169 147
Self-insurance liabilities (Note 13) 74 80
Deferred income taxes (Note 12) 49 47
Guarantee liabilities (Note 13) 32 46
Other 100 114
Total other long-term liabilities $ 888 $ 884


	March 31, 2021		December 31, 2020
Deferred compensation plans funded by rabbi trusts (Note 4)	$	524	$	511
Income taxes payable	167		166
Self-insurance liabilities (Note 12)	67		67
Deferred income taxes (Note 11)	66		48
Guarantee liabilities (Note 12)	26		31
Other	57		88
Total other long-term liabilities	$	907	$	911

~~12.~~11. INCOME TAXES

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was signed into law. The provisions include, but are not limited to, allowing net operating loss carrybacks, modifying the net interest deduction limitations, providing technical corrections to tax depreciation methods for qualified improvement property, allowing refundable payroll tax credits, and deferring employer social security deposits. Specifically, net operating losses incurred in 2020 may be carried back to each of the preceding five years to offset prior year taxable income generating a refund in future periods when the tax returns are filed and the cash is received.

During the three months ended September 30, 2020, we recognized a $7 million benefit related to the employee retention credit created under the CARES Act, of which $3 million was recognized as a reduction of owned and leased hotels expense and $4 million was recognized as a reduction of costs incurred on behalf of managed and franchised properties on our condensed consolidated statements of income (loss). During the nine months ended September 30, 2020, we recognized a $25 million benefit related to the employee retention credit created under the CARES Act, of which $7 million was recognized as a reduction of owned and leased hotels expense and $18 million was recognized as a reduction of costs incurred on behalf of managed and franchise properties on our condensed consolidated statements of income (loss). In both periods, the reduction of costs incurred on behalf of managed properties was offset by a reduction in revenues for the reimbursement of costs incurred on behalf of managed and franchised properties with no impact to net income (loss) on our condensed consolidated statements of income (loss).

The effective income tax rates for the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020 were (156.6)% and ~~September 30, 2019 were 26.8% and 26.9%, respectively. The effective income tax rates for the nine months ended September 30, 2020 and September 30, 2019 were 27.3% and 25.0%~~25.4%, respectively. Our effective tax rate ~~increased~~decreased for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, compared to the ~~nine~~three months ended ~~September 30, 2019, primarily~~March 31, 2020, due to ~~U.S. net operating losses that will be benefited at the 35% tax rate in accordance with the terms of the CARES Act, partially offset by~~ a ~~$23~~$193 million ~~valuation allowance recorded on foreign tax credits not expected~~non-cash expense to ~~be realized within the carryforward period. In addition, in 2019, we recognized~~record a ~~non-recurring benefit as a result of an agreement reached by the United States and Swiss tax authorities on Advanced Pricing Agreement terms covering the years 2012 through 2021.~~full valuation

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allowance on U.S. federal and state deferred tax assets and the impact of unbenefited U.S. and foreign losses in the period.

During the year ended December 31, 2020 and the three months ended March 31, 2021, we generated significant pre-tax losses driven by the COVID-19 pandemic business disruption, and during the three months ended March 31, 2021, we entered into a three-year cumulative U.S. pre-tax loss position. When assessing the need for a valuation allowance against our deferred tax assets, we considered both positive and negative evidence, including the cumulative three-year pre-tax loss position. We considered sources of positive evidence including recent favorable recovery trends in the hospitality industry in the first quarter of 2021 and the indefinite carryforward period of U.S. tax losses generated. Accounting Standards Codification 740, Income Taxes, prescribes that a recent cumulative pre-tax loss position is strong objectively verifiable negative evidence that is difficult to overcome and little or no weight is placed on future projections of pre-tax income, and therefore, our forecasts did not have an impact on our assessment. Based on the weight of all available evidence, we recorded a full valuation allowance against our U.S. deferred tax assets.

During the three months ended March 31, 2021, we recognized a $193 million valuation allowance for U.S. federal and state deferred tax assets. At January 1, 2021, we had no U.S. federal net operating loss carryforwards, as the net operating losses we generated in 2020 were carried back to prior years, as described below. To measure the valuation allowance, we estimated the years in which our deferred tax assets and liabilities would reverse using systematic and logical methods to determine reversal patterns.

If we continue to generate losses in future periods, additional valuation allowances may be required that could have an adverse impact on our net income (loss). Conversely, if pre-tax income returns to normalized levels, we expect to see these allowances reverse, which would result in an increase in reported net income. We will continue to reassess the realizability of our U.S. deferred tax asset balances in future periods.

During the three months ended March 31, 2021, we filed a U.S. refund claim, which carried back the taxable loss generated in 2020 to 2015, 2016, and 2017 as allowed under the provision of the Coronavirus Aid, Relief, and Economic Security Act. As a result, we expect a refund from the Internal Revenue Service ("IRS") of approximately $250 million, which is recorded in prepaid income taxes on our condensed consolidated balance sheets.

We are subject to audits by federal, state, and foreign tax authorities. ~~We are currently under field exam by the Internal Revenue Service ("IRS") for tax years 2015 through 2017.~~ U.S. tax years 2009 through 2011 are before the U.S. Tax Court concerning the tax treatment of the loyalty program. ~~Additionally,~~We are currently under field exam by the IRS for tax years 2015 through 2017. During the three months ended March 31, 2021, we received a Notice of Proposed Adjustment for those tax years related to the loyalty program issue currently in U.S. Tax Court. As a result, U.S. tax years ~~2012~~2009 through ~~2014~~2017 are pending the outcome of the issue currently in U.S. Tax Court. If the IRS' position to include loyalty program contributions as taxable income to the Company is upheld, it would result in an income tax payment of ~~$198~~$218 million (including ~~$54~~$60 million of estimated interest, net of federal tax benefit) for all assessed years that would be partially offset by a deferred tax asset. As future tax benefits will be recognized at the reduced U.S. corporate income tax rate, $74 million of the payment and related interest would have an impact on the effective tax rate, if recognized.years. We believe we have an adequate uncertain tax liability recorded in connection with this matter.

At March 31, 2021 and December 31, 2020, total unrecognized tax benefits recorded in other long-term liabilities on our condensed consolidated balance sheets were $147 million and $146 million, respectively, of which $138 million and $49 million, respectively, would impact the effective tax rate if recognized.

~~13.~~

12. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, we enter into various commitments, guarantees, surety bonds, and letter of credit agreements.

Commitments—At ~~September 30, 2020,~~March 31, 2021, we are committed, under certain conditions, to lend or provide certain consideration to, or invest in, various business ventures up to ~~$282~~$335 million, net of any related letters of credit.

Performance Guarantees—Certain of our contractual agreements with third-party hotel owners require us to guarantee payments to the owners if specified levels of operating profit are not achieved by their hotels. At ~~September 30, 2020,~~March 31, 2021, the remaining maximum exposure under our performance guarantees was ~~$52~~$41 million. Our most significant performance guarantee, relating to 4 managed hotels in France, expired on April 30, 2020.

We had ~~$33~~$14 million and $16 million of total ~~net~~ performance guarantee liabilities ~~both~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, which included ~~$7 million and $14~~$6 million recorded in other long-term liabilities for both periods and ~~$26~~$8 million and ~~$19~~$10 million recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets, respectively.

Four managed hotels in France (1) 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 0 0 0 1 0 1
Amortization of initial guarantee obligation liability into income (4) (8) (2) (1) (6) (9)
Performance guarantee expense, net 26 24 13 0 39 24
Net payments during the period (15) (36) (11) (4) (26) (40)
Foreign currency exchange, net (1) 0 0 0 (1) 0
Ending balance, June 30 26 16 13 7 39 23
Amortization of initial guarantee obligation liability into income 0 (4) (1) (1) (1) (5)
Performance guarantee expense (recovery), net 0 (1) 8 2 8 1
Net payments during the period (7) (3) (7) (2) (14) (5)
Foreign currency exchange, net 1 (1) 0 0 1 (1)
Ending balance, September 30 $ 20 $ 7 $ 13 $ 6 $ 33 $ 13

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~~(1) Based on payment terms, we expect to settle the liability by December 31, 2020.~~


	Four managed hotels in France				Other performance guarantees				All performance guarantees
	2021		2020		2021		2020		2021		2020
Beginning balance, January 1	$	0	$	20	$	16	$	13	$	16	$	33
Initial guarantee obligation liability	0		0		1		0		1		0
Amortization of initial guarantee obligation liability into income	0		(4)		(1)		(1)		(1)		(5)
Performance guarantee expense, net	0		20		1		6		1		26
Payments during the period	0		(15)		(3)		(3)		(3)		(18)
Ending balance, March 31	$	0	$	21	$	14	$	15	$	14	$	36

Additionally, we enter into certain management contracts where we have the right, but not an obligation, to make payments to certain hotel owners if their hotels do not achieve specified levels of operating profit. If we choose not to fund the shortfall, the hotel owner has the option to terminate the management contract. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019, there were 0 amounts~~2020, we had $4 million and $3 million, respectively, recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets related to these performance ~~test clauses.~~

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cure payments.

Debt Repayment and Other Guarantees—We enter into various debt repayment and other guarantees in order to assist ~~property~~hotel owners and unconsolidated hospitality ventures in obtaining third-party financing or to obtain more favorable borrowing terms.

We had $39 million and $32 million of total debt repayment and other guarantees liabilities at September 30, 2020 and December 31, 2019, respectively, which included $25 million and $32 million recorded in other long-term liabilities and $14 million and $0 recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets, respectively.


Property description	Property description	Maximum potential future payments		Maximum exposure net of recoverability from third parties		Total liabilities recorded at September 30, 2020		Total liabilities recorded at December 31, 2019		Year of guarantee expiration	Property description	Maximum potential future payments		Maximum exposure net of recoverability from third parties		Other long-term liabilities recorded at March 31, 2021		Other long-term liabilities recorded at December 31, 2020		Year of guarantee expiration
Hotel properties in India (1)	Hotel properties in India (1)	$	168	$	168	$	1	$	5	2021	Hotel properties in India (1)	$	170	$	170	$	0	$	0	2021
Hotel and residential properties in Brazil (2), (3)		90		38		17		3		various, through 2023
Hotel properties in Tennessee (2)	Hotel properties in Tennessee (2)	44		20		6		8		various, through 2023	Hotel properties in Tennessee (2)	56		26		7		8		various, through 2024
Hotel properties in California (2)	Hotel properties in California (2)	38		15		2		3		various, through 2021	Hotel properties in California (2)	38		15		2		2		2021
Hotel property in Pennsylvania (2), (3)											Hotel property in Pennsylvania (2), (3)	28		11		1		1		various, through 2023
Hotel property in Massachusetts (2), ~~(4)~~(3)	Hotel property in Massachusetts (2), ~~(4)~~(3)	30		16		4		6		various, through 2022	Hotel property in Massachusetts (2), ~~(4)~~(3)	27		14		3		4		various, through 2022
Hotel property in Pennsylvania (2), (4)		27		11		1		0		various, through 2023
Hotel properties in Georgia (2)	Hotel properties in Georgia (2)	27		13		4		2		various, through 2024	Hotel properties in Georgia (2)	27		13		3		4		various, through 2024
Hotel property in Oregon (2), (4)		21		8		2		3		various, through 2022
Other (2), (3)		19		5		2		2		various, through 2022
Hotel property in Oregon (2)											Hotel property in Oregon (2)	21		8		1		1		2022
Other (2), (4)											Other (2), (4)	21		8		3		5		various, through 2025
Total	Total	$	464	$	294	$	39	$	32		Total	$	388	$	265	$	20	$	25

(1) Debt repayment guarantee is denominated in Indian rupees and translated using exchange rates at ~~September 30, 2020.~~March 31, 2021. We have the contractual right to recover amounts funded from an unconsolidated hospitality venture, which is a related party. We expect our maximum exposure to be ~~$84~~$85 million, taking into account our partner's 50% ownership interest in the unconsolidated hospitality venture. Under certain events or conditions, we have the right to force the sale of the properties in order to recover amounts funded.

(2) We have agreements with our unconsolidated hospitality venture partners, the respective hotel owners, or other third parties to recover certain amounts funded under the debt repayment guarantee; the recoverability mechanism may be in the form of cash ~~financing receivable,~~ or HTM debt security.

(3) If certain funding thresholds are met or if certain events occur, we have the ability to assume control of the property. With respect to properties in Brazil, this right only exists for the residential property.

~~(4)~~ In conjunction with the debt repayment guarantees, we are subject to completion guarantees whereby the parties agree to substantially complete the construction of the project by a specified date. In the event of default, we are obligated to complete construction using the funds available from the outstanding loan. Any additional funds paid by us are subject to partial recovery in the form of cash. At ~~September 30, 2020,~~March 31, 2021, the maximum potential future payments ~~are $4 million,~~ and the maximum exposure net of recoverability from third parties ~~is $2 million.~~are insignificant.

~~As a result~~(4) If certain funding thresholds are met or if certain events occur, we have the ability to assume control of ~~existing economic conditions, in part due to~~ the COVID-19 pandemic, and the developer's inability to complete construction and meet its debt service, we recognized $1 million and $14 million of credit losses related to a debt repayment guarantee for the residential property in Brazil in other income (loss), net on our condensed consolidated statements of income (loss) during the three and nine months ended September 30, 2020, respectively (see Note 19).property.

At ~~September 30, 2020,~~March 31, 2021, we are not aware of, nor have we received notification that our unconsolidated hospitality ventures or hotel owners are not current on their debt service obligations where we have provided a debt repayment guarantee.

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Guarantee Liabilities Fair Value—We estimated the fair value of our guarantees to be ~~$79~~$44 million and ~~$62~~$66 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. Based on the lack of available market data, we have classified our guarantees as Level Three in the fair value hierarchy.

Insurance—We obtain commercial insurance for potential losses for general liability, workers' compensation, automobile liability, employment practices, crime, property, cyber risk, and other miscellaneous coverages. A portion of the risk is retained on a self-insurance basis primarily through a U.S.-based and licensed captive insurance ~~companies~~company that ~~are~~is a wholly owned ~~subsidiaries~~subsidiary of Hyatt and generally ~~insure~~insures our deductibles and retentions. Reserve requirements are established based on actuarial projections of ultimate losses. Reserves for losses in our captive insurance ~~companies~~company to be paid within 12 months are ~~$38~~$36 million and ~~$41~~$37 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and are recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets. Reserves for losses in our captive insurance ~~companies~~company to be paid in future periods are ~~$74 million and $80~~$67 million at ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019, respectively,~~2020 and are recorded in other long-term liabilities on our condensed consolidated balance sheets.

Collective Bargaining Agreements—At ~~September 30, 2020,~~March 31, 2021, approximately ~~27%~~26% of our U.S.-based employees were covered by various collective bargaining agreements, generally providing for basic pay rates, working hours, other conditions of employment, and orderly settlement of labor disputes. Certain employees are covered by union-sponsored, multi-employer pension and health plans pursuant to agreements between us and various unions. Generally, labor relations have been maintained in a normal and satisfactory manner, and we believe our employee relations are good.

Surety Bonds—Surety bonds issued on our behalf were ~~$50~~$49 million at ~~September 30, 2020~~March 31, 2021 and primarily relate to workers' compensation, taxes, licenses, construction liens, and utilities related to our lodging operations.

Letters of Credit—Letters of credit outstanding on our behalf at ~~September 30, 2020~~March 31, 2021 were ~~$264~~$238 million, which relate to our ongoing operations, hotel properties under development in the U.S., collateral for estimated insurance claims, and securitization of our performance under our debt repayment ~~guarantees~~guarantee associated with the hotel properties in India, ~~and the residential property in Brazil,~~ which ~~are~~is only called ~~upon~~on if we default on our ~~guarantees.~~guarantee. Of the letters of credit outstanding, $1 million reduces the available capacity under our revolving credit facility (see Note ~~10)~~9).

Capital Expenditures—As part of our ongoing business operations, expenditures are required to complete renovation projects that have been approved.

Other—We act as general partner of various partnerships owning hotel properties that are subject to mortgage indebtedness. These mortgage agreements generally limit the lender's recourse to security interests in assets financed and/or other assets of the partnership(s) and/or the general partner(s) thereof.

In conjunction with financing obtained for our unconsolidated hospitality ventures and certain managed hotels, ~~and other properties,~~ we may provide standard indemnifications to the lender for loss, liability, or damage occurring as a result of our actions or actions of the other unconsolidated hospitality venture partners or respective hotel ~~owners, or other third parties.~~owners.

As a result of certain dispositions, we have agreed to provide customary indemnifications to third-party purchasers for certain liabilities incurred prior to sale and for breach of certain representations and warranties made during the sales process, such as representations of valid title, authority, and environmental issues that may not be limited by a contractual monetary amount. These indemnification agreements survive until the applicable statutes of limitation expire or until the agreed upon contract terms expire.

We are subject, from time to time, to various claims and contingencies related to lawsuits, taxes, and environmental matters, as well as commitments under contractual obligations. Many of these claims are covered under our current insurance programs, subject to deductibles. Although the ultimate liability for these matters cannot be determined at this point, based on information currently available, we do not expect the ultimate resolution of such claims and litigation to have a material effect on our condensed consolidated financial statements.

During the year ended December 31, 2018, we received a notice from the Indian tax authorities assessing additional service tax on our operations in India. We appealed this decision and do not believe a loss is probable, and therefore, we have not recorded a liability in connection with this matter. At ~~September 30, 2020,~~March 31, 2021, our maximum exposure is not expected to exceed $18 million.

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~~14.~~13. EQUITY

Accumulated Other Comprehensive Loss

Balance at
July 1, 2020 Current period other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive loss (a) Balance at
September 30, 2020
Foreign currency translation adjustments $ (215) $ 15 $ 0 $ (200)
Unrecognized gains on AFS debt securities 1 0 0 1
Unrecognized pension cost (9) 0 0 (9)
Unrealized losses on derivative instruments (44) 0 2 (42)
Accumulated other comprehensive loss $ (267) $ 15 $ 2 $ (250)
(a) The amount reclassified from accumulated other comprehensive loss includes realized losses recognized in interest expense, net of insignificant tax impacts, related to the settlement of interest rate locks (see Note 10).
Balance at
January 1, 2020 Current period other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive loss (b) Balance at
September 30, 2020
Foreign currency translation adjustments $ (183) $ (17) $ 0 $ (200)
Unrecognized gains on AFS debt securities 1 0 0 1
Unrecognized pension cost (9) 0 0 (9)
Unrealized losses on derivative instruments (18) (27) 3 (42)
Accumulated other comprehensive loss $ (209) $ (44) $ 3 $ (250)
(b) The amount reclassified from accumulated other comprehensive loss includes realized losses recognized in interest expense, net of insignificant tax impacts, related to the settlement of interest rate locks (see Note 10). We expect to reclassify $6 million of losses over the next 12 months.
Balance at
July 1, 2019 Current period other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive loss Balance at
September 30, 2019
Foreign currency translation adjustments $ (191) $ (27) $ 0 $ (218)
Unrecognized pension cost (5) 0 0 (5)
Unrealized losses on derivative instruments (16) (9) 0 (25)
Accumulated other comprehensive loss $ (212) $ (36) $ 0 $ (248)
Balance at
January 1, 2019 Current period other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive loss Balance at
September 30, 2019
Foreign currency translation adjustments $ (191) $ (27) $ 0 $ (218)
Unrecognized pension cost (5) 0 0 (5)
Unrealized losses on derivative instruments (4) (21) 0 (25)
Accumulated other comprehensive loss $ (200) $ (48) $ 0 $ (248)

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	Balance at January 1, 2021		Current period other comprehensive loss before reclassification		Amount reclassified from accumulated other comprehensive loss		Balance at March 31, 2021
Foreign currency translation adjustments (a)	$	(145)	$	(24)	$	(22)	$	(191)
Unrealized gains (losses) on AFS debt securities	1		(1)		0		0
Unrecognized pension cost	(7)		0		0		(7)
Unrealized losses on derivative instruments (b)	(41)		0		2		(39)
Accumulated other comprehensive loss	$	(192)	$	(25)	$	(20)	$	(237)
(a) The amount reclassified from accumulated other comprehensive loss related to the acquisition of the remaining interest in the entities which own Grand Hyatt São Paulo (see Note 6).
(b) The amount reclassified from accumulated other comprehensive loss represents realized losses recognized in interest expense related to the settlement of interest rate locks (see Note 9). We expect to reclassify $7 million of losses over the next 12 months.









	Balance at January 1, 2020		Current period other comprehensive loss before reclassification		Amount reclassified from accumulated other comprehensive loss		Balance at March 31, 2020
Foreign currency translation adjustments	$	(183)	$	(51)	$	0	$	(234)
Unrealized gains (losses) on AFS debt securities	1		0		0		1
Unrecognized pension cost	(9)		0		0		(9)
Unrealized losses on derivative instruments	(18)		(25)		0		(43)
Accumulated other comprehensive loss	$	(209)	$	(76)	$	0	$	(285)

Share Repurchase—During 2019 and 2018, our board of directors authorized the repurchase of up to $750 million and $750 million, respectively, of our common stock. These repurchases may be made from time to time in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan or an accelerated share repurchase transaction, at prices we deem appropriate and subject to our financial condition, capital requirements, market conditions, restrictions under the terms of our revolving credit facility, applicable law, and other factors deemed relevant in our sole discretion. The common stock repurchase program applies to our Class A and Class B common stock. The common stock repurchase program does not obligate us to repurchase any dollar amount or number of shares of common stock, and the program may be suspended or discontinued at any time.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, we did not repurchase common stock.

During the three months ended March 31, 2020, we repurchased 827,643 shares of Class A common stock. The shares of common stock were repurchased at a weighted-average price of $84.08 per share for an aggregate purchase price of $69 million, excluding related insignificant expenses. The shares repurchased during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 represented approximately 1% of our total shares of common stock outstanding at December 31, 2019.

During the nine months ended September 30, 2019, we repurchased 3,829,427 shares of common stock. The shares of common stock were repurchased at a weighted-average price of $73.08 per share for an aggregate purchase price of $280 million, excluding related insignificant expenses. The shares repurchased during the nine months ended September 30, 2019 represented approximately 4% of our total shares of common stock outstanding at December 31, 2018.

The shares of Class A common stock repurchased on the open market were retired and returned to the status of authorized and unissued ~~shares, while the shares of Class B common stock repurchased were retired and the total number of authorized Class B shares was reduced by the number of shares retired (see Note 16).~~shares. At ~~September 30, 2020,~~March 31, 2021, we had $928 million remaining under the share repurchase authorization.

Dividend—~~The following tables summarize~~Hyatt did 0t declare or pay dividends to Class A or Class B shareholders of record during the three months ended March 31, 2021.On February 13, 2020, our board of directors declared a cash dividend of $0.20 per share for the first quarter of 2020, which was paid on March 9, 2020 to Class A and Class B shareholders of ~~record:~~record on February 26, 2020. For the three months ended March 31, 2020, $7 million and $13 million of cash dividends were paid for Class A and Class B common stock, respectively.

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Class A common stock $ 0 $ 8 $ 7 $ 22
Class B common stock 0 12 13 38
Total cash dividends paid $ 0 $ 20 $ 20 $ 60

~~Date declared~~

Dividend per share amount
for Class A and Class B

~~Date of record~~

~~Date paid~~

~~February 13, 2020~~

~~0.20~~

~~February 26, 2020~~

~~March 9, 2020~~

~~February 13, 2019~~

~~0.19~~

~~February 27, 2019~~

~~March 11, 2019~~

~~May 17, 2019~~

~~0.19~~

~~May 29, 2019~~

~~June 10, 2019~~

~~July 31, 2019~~

~~0.19~~

~~August 27, 2019~~

~~September 9, 2019~~

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~~15.~~14. STOCK-BASED COMPENSATION

As part of our Long-Term Incentive Plan ("LTIP"), we award ~~Stock Appreciation Rights~~time-vested stock appreciation rights ("SARs"), ~~Restricted Stock Units~~time-vested restricted stock units ("RSUs"), and ~~Performance Share Units~~performance-vested restricted stock units ("PSUs") to certain employees and non-employee directors. In addition, non-employee directors may elect to receive their annual fees and/or annual equity retainers in the form of shares of our Class A common stock. Compensation expense and unearned compensation presented below exclude amounts related to employees of our managed hotels and other employees whose payroll is reimbursed, as this expense has been and will continue to be reimbursed by our third-party hotel owners and is recognized within revenues for the reimbursement of costs incurred on behalf of managed and franchised properties and costs incurred on behalf of managed and franchised properties on our condensed consolidated statements of income (loss). Stock-based compensation expense ~~included~~recognized in selling, general, and administrative expenses on our condensed consolidated statements of income (loss) related to these awards was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
SARs	SARs	$	0	$	1	$	10	$	11	SARs	$	9	$	10
RSUs	RSUs	3		2		17		13		RSUs	13		10
PSUs	PSUs	0		1		(7)		4		PSUs	6		(5)
Total	Total	$	3	$	4	$	20	$	28	Total	$	28	$	15

The ~~nine~~three months ended ~~September 30,~~March 31, 2020 ~~includes~~included a reversal of previously recognized stock-based compensation expense based on our ~~current~~ assessment at the time of the expected achievement relative to the applicable performance targets related to certain PSU awards.

SARs—During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, we granted 396,889 SARs to employees with a weighted-average grant date fair value of $28.68. During the three months ended March 31, 2020, we granted 1,250,434 SARs to employees with a weighted-average grant date fair value of $8.88.

RSUs—During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2021, we granted ~~643,989 SARs~~388,726 RSUs to employees and non-employee directors with a weighted-average grant date fair value of ~~$17.11.~~

~~RSUs~~—$80.48. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, we granted ~~628,407~~519,730 RSUs to employees with a weighted-average grant date fair value of ~~$49.33. During the nine months ended September 30, 2019, we granted 355,774 RSUs to employees with a weighted-average grant date fair value of $72.05.~~$48.66.

PSUs—During the ~~nine~~three months ended ~~September 30, 2020, we did 0t grant any PSUs under our LTIP. During the nine months ended September 30, 2019,~~March 31, 2021, we granted ~~120,720~~153,256 PSUs to employees with a weighted-average grant date fair value of ~~$77.95.~~$82.02. During the three months ended March 31, 2020, we did 0t grant any PSUs under our LTIP.

Our total unearned compensation for our stock-based compensation programs at ~~September 30, 2020~~March 31, 2021 was $2$3 million for SARs, ~~$18~~$25 million for RSUs, and $0$23 million for PSUs, which will primarily be recognized in stock-based compensation expense over a weighted-average period of three years.

~~16.~~15. RELATED-PARTY TRANSACTIONS

In addition to those included elsewhere in the Notes to our condensed consolidated financial statements, related-party transactions entered into by us are summarized as follows:

~~Legal Services~~—A partner in a law firm that provided services to us throughout the nine months ended September 30, 2020 and September 30, 2019 is the brother-in-law of our Executive Chairman. We incurred $2 million of legal fees with this firm during each of the three months ended September 30, 2020 and September 30, 2019. We incurred $7 million and $5 million of legal fees with this firm during the nine months ended September 30, 2020 and September 30, 2019, respectively. At September 30, 2020 and December 31, 2019, we had $1 million and insignificant amounts due to the law firm, respectively.

Equity Method Investments—We have equity method investments in entities that own, operate, manage, or franchise properties for which we receive management, franchise, or ~~franchise~~license fees. We recognized $1 million and $5$3 million of fees for the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019, respectively. We recognized $5 million and $15 million of fees for the nine months ended September 30, 2020 and September 30, 2019,~~ respectively. In addition, in some cases we provide loans (see Note 6)5) or guarantees (see Note ~~13)~~12) to these entities. During each of the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ we recognized $1 million of income related to these guarantees. ~~During each of the nine months ended September 30, 2020 and September 30, 2019, we recognized $3 million of income related to these guarantees.~~ At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had $~~15 million~~ ~~and $17~~

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$15 million of receivables due from these ~~properties, respectively.~~properties. Our ownership interest in these unconsolidated hospitality ventures varies from 24% to 50%. See Note 54 for further details regarding these investments.

~~Other Services—~~The brother of our Executive Chairman is affiliated with a limited partnership which has ownership interests in hotels from which we recognized $1 million and $2 million of management and franchise fees during the three months ended September 30, 2020 and September 20, 2019, respectively. We recognized $1 million and $4 million of management and franchise fees during the nine months ended September 30, 2020 and September 30, 2019, respectively. At September 30, 2020 and December 31, 2019, we had $1 million and insignificant receivables due from these properties, respectively.

Class B Share Conversion—During the three ~~and nine~~ months ended ~~September 30, 2020, 331,083 and 2,766,326~~March 31, 2021, 800,169 shares of Class B common stock ~~respectively,~~ were converted on a share-for-share basis into shares of ~~our~~ Class A common stock, $0.01 par value per share. The shares of Class B common stock that were converted into shares of Class A common stock have been retired, thereby reducing the shares of Class B common stock authorized and outstanding.

~~Class B Share Repurchase—~~During the three and nine months ended September 30, 2019, we repurchased 677,384 shares of Class B common stock for a weighted-average price of $74.21 per share, for an aggregate purchase price of approximately $50 million. The shares repurchased represented approximately 1% of our total shares of common stock outstanding prior to the repurchase. The shares of Class B common stock were repurchased in privately negotiated transactions from trusts or limited partnerships owned indirectly by trusts for the benefit of certain Pritzker family members or private charitable organizations affiliated with certain Pritzker family members and were retired, thereby reducing the shares of Class B common stock authorized and outstanding by the repurchased share amount.

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16. SEGMENT INFORMATION

Our reportable segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by the chief operating decision maker ("CODM") to assess performance and make decisions regarding the allocation of resources. Our CODM is our President and Chief Executive Officer. Effective January 1, 2020, we changed the strategic and operational oversight for our Miraval properties, which were previously evaluated as a distinct business by our CODM. The management fees from Miraval properties are now reported in the Americas management and franchising segment, and the operating results and financial position of underlying hotel results are now reported in our owned and leased hotels segment; the results of Miraval properties were previously reported in corporate and other. In addition, the license fees we receive from Hyatt Residence Club are now reported within our Americas management and franchising segment due to changes in the strategic oversight for these license agreements. The segment changes have been reflected retrospectively to the three and nine months ended September 30, 2019. We define our reportable segments as follows:

•Owned and leased hotels—This segment derives its earnings from owned and leased hotel properties located predominantly in the United States but also in certain international locations, and for purposes of segment Adjusted EBITDA, includes our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture. Adjusted EBITDA includes intercompany expenses related to management fees paid to the Company's management and franchising segments, which are eliminated in consolidation. Intersegment revenues relate to promotional award redemptions earned by our owned and leased hotels related to our co-branded credit ~~cards~~card program and are eliminated in consolidation.

•Americas management and franchising—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in the United States, Latin America, Canada, and the Caribbean as well as revenues from residential management operations. This segment's revenues also include the reimbursement of costs incurred on behalf of managed and franchised properties. These reimbursed costs relate primarily to payroll at managed properties where the Company is the employer, as well as costs associated with sales, reservations, technology, and marketing services (collectively, "system-wide services") and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from the Company's owned and leased hotels and are eliminated in consolidation.

•ASPAC management and franchising—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in Southeast Asia, Greater China, Australia, New Zealand, South Korea, Japan, and Micronesia. This segment's revenues also include the

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reimbursement of costs incurred on behalf of managed and franchised properties. These reimbursed costs relate primarily to system-wide services and the loyalty program operated on behalf of owners of managed and franchised properties. ~~The intersegment revenues relate to management fees earned from the Company's owned hotel, which was sold during the year ended December 31, 2019, and are eliminated in consolidation.~~

•EAME/SW Asia management and franchising—This segment derives its earnings primarily from a combination of hotel management and licensing of our portfolio of brands to franchisees located in Europe, Africa, the Middle East, India, Central Asia, and Nepal. This segment's revenues also include the reimbursement of costs incurred on behalf of managed and franchised properties. These reimbursed costs relate primarily to system-wide services and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from the Company's owned and leased hotels and are eliminated in consolidation.

Our CODM evaluates performance based on owned and leased hotels ~~revenues,~~revenues; management, franchise, and other fees ~~revenues,~~revenues; and Adjusted EBITDA. Adjusted EBITDA, as we define it, is a non-GAAP measure. We define Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ~~ventures~~ventures' Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude interest expense; benefit (provision) for income taxes; depreciation and amortization; amortization of management and franchise agreement assets ~~constituting~~and performance cure payments, which constitute payments to customers ("Contra revenue"); revenues for the reimbursement of costs incurred on behalf of managed and franchised properties; costs incurred on behalf of managed and franchised ~~properties;~~properties that we intend to recover over the long term; equity earnings (losses) from unconsolidated hospitality ventures; stock-based compensation expense; gains (losses) on sales of real estate; asset impairments; and other income (loss), net.

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The table below shows summarized consolidated financial information by segment. Included within corporate and other are results from our co-branded credit card program, the results of the Exhale ~~results related to our co-branded credit cards,~~spa and fitness business, which was sold during the year ended December 31, 2020, and unallocated corporate expenses.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Owned and leased hotels	Owned and leased hotels									Owned and leased hotels
Owned and leased hotels revenues	Owned and leased hotels revenues	$	82	$	441	$	432	$	1,417	Owned and leased hotels revenues	$	107	$	330

Intersegment revenues (a)	Intersegment revenues (a)	2		11		10		27		Intersegment revenues (a)	3		7
Adjusted EBITDA	Adjusted EBITDA	(56)		73		(100)		291		Adjusted EBITDA	(29)		34
Depreciation and amortization	Depreciation and amortization	63		66		182		196		Depreciation and amortization	59		63
Americas management and franchising	Americas management and franchising									Americas management and franchising
Management, franchise, and other fees revenues	Management, franchise, and other fees revenues	29		108		121		331		Management, franchise, and other fees revenues	38		84
Contra revenue	Contra revenue	(5)		(4)		(13)		(11)		Contra revenue	(4)		(4)
Other revenues	Other revenues	4		16		33		71		Other revenues	17		27
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	234		565		904		1,688		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	227		484
Intersegment revenues (a)	Intersegment revenues (a)	3		15		12		49		Intersegment revenues (a)	3		10
Adjusted EBITDA	Adjusted EBITDA	16		93		81		288		Adjusted EBITDA	28		68
Depreciation and amortization	Depreciation and amortization	5		6		15		18		Depreciation and amortization	5		5
ASPAC management and franchising	ASPAC management and franchising									ASPAC management and franchising
Management, franchise, and other fees revenues	Management, franchise, and other fees revenues	17		32		42		96		Management, franchise, and other fees revenues	15		19
Contra revenue	Contra revenue	0		0		(2)		(1)		Contra revenue	(1)		(1)
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	18		30		62		80		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	20		27
Intersegment revenues (a)		0		1		0		1

Adjusted EBITDA	Adjusted EBITDA	9		19		15		59		Adjusted EBITDA	5		8
Depreciation and amortization	Depreciation and amortization	1		1		3		3		Depreciation and amortization	1		1
EAME/SW Asia management and franchising	EAME/SW Asia management and franchising									EAME/SW Asia management and franchising
Management, franchise, and other fees revenues	Management, franchise, and other fees revenues	5		21		17		58		Management, franchise, and other fees revenues	7		10
Contra revenue	Contra revenue	(2)		(1)		(5)		(4)		Contra revenue	(3)		(1)
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	14		20		46		54		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	13		20
Intersegment revenues (a)	Intersegment revenues (a)	0		3		1		7		Intersegment revenues (a)	0		1
Adjusted EBITDA	Adjusted EBITDA	(2)		12		(12)		33		Adjusted EBITDA	0		1
Depreciation and amortization	Depreciation and amortization	1		1		1		1		Depreciation and amortization	0		0
Corporate and other	Corporate and other									Corporate and other
Revenues	Revenues	7		15		25		45		Revenues	8		14
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	1		2		3		4		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		2
Intersegment revenues (a)	Intersegment revenues (a)	0		0		0		(1)		Intersegment revenues (a)	0		0
Adjusted EBITDA	Adjusted EBITDA	(15)		(33)		(65)		(110)		Adjusted EBITDA	(24)		(27)
Depreciation and amortization	Depreciation and amortization	10		11		32		30		Depreciation and amortization	9		11
Eliminations	Eliminations									Eliminations
Revenues (a)	Revenues (a)	(5)		(30)		(23)		(83)		Revenues (a)	(6)		(18)
Adjusted EBITDA	Adjusted EBITDA	0		(1)		2		2		Adjusted EBITDA	0		2
TOTAL	TOTAL									TOTAL
Revenues	Revenues	$	399	$	1,215	$	1,642	$	3,745	Revenues	$	438	$	993
Adjusted EBITDA	Adjusted EBITDA	(48)		163		(79)		563		Adjusted EBITDA	(20)		86
Depreciation and amortization	Depreciation and amortization	80		85		233		248		Depreciation and amortization	74		80

(a)Intersegment revenues are included in management, franchise, and other fees revenues, owned and leased hotels revenues, and other revenues and eliminated in Eliminations.

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The table below provides a reconciliation of our net ~~income (loss)~~loss attributable to Hyatt Hotels Corporation to EBITDA and a reconciliation of EBITDA to our consolidated Adjusted EBITDA:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Net income (loss) attributable to Hyatt Hotels Corporation		$	(161)	$	296	$	(500)	$	445
Net loss attributable to Hyatt Hotels Corporation										Net loss attributable to Hyatt Hotels Corporation	$	(304)	$	(103)
Interest expense	Interest expense	35		19		87		58		Interest expense	41		17
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(59)		109		(188)		148		(Benefit) provision for income taxes	186		(35)
Depreciation and amortization	Depreciation and amortization	80		85		233		248		Depreciation and amortization	74		80
EBITDA	EBITDA	(105)		509		(368)		899		EBITDA	(3)		(41)
Contra revenue	Contra revenue	7		5		20		16		Contra revenue	8		6
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	(267)		(617)		(1,015)		(1,826)		Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	(260)		(533)
Costs incurred on behalf of managed and franchised properties	Costs incurred on behalf of managed and franchised properties	278		633		1,068		1,871		Costs incurred on behalf of managed and franchised properties	277		555
Equity losses from unconsolidated hospitality ventures		20		5		45		2
Stock-based compensation expense (Note 15)		3		4		20		28
Gains on sales of real estate (Note 7)		0		(373)		(8)		(374)
Equity (earnings) losses from unconsolidated hospitality ventures										Equity (earnings) losses from unconsolidated hospitality ventures	(54)		2
Stock-based compensation expense (Note 14)										Stock-based compensation expense (Note 14)	28		15
Gains on sales of real estate (Note 6)										Gains on sales of real estate (Note 6)	0		(8)
Asset impairments	Asset impairments	0		9		52		13		Asset impairments	0		3
Other (income) loss, net (Note 19)		19		(25)		114		(104)
Pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA		(3)		13		(7)		38
Other (income) loss, net (Note 18)										Other (income) loss, net (Note 18)	(12)		81
Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA										Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA	(4)		6
Adjusted EBITDA	Adjusted EBITDA	$	(48)	$	163	$	(79)	$	563	Adjusted EBITDA	$	(20)	$	86

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~~18. EARNINGS (LOSSES)~~17. LOSSES PER SHARE

The calculation of basic and diluted ~~earnings (losses)~~losses per share, including a reconciliation of the numerator and denominator, are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Numerator:
Net income (loss) $ (161) $ 296 $ (500) $ 445
Net income (loss) attributable to noncontrolling interests 0 0 0 0
Net income (loss) attributable to Hyatt Hotels Corporation $ (161) $ 296 $ (500) $ 445
Denominator:
Basic weighted-average shares outstanding 101,277,404 104,349,157 101,312,741 105,226,587
Share-based compensation 0 1,569,736 0 1,553,693
Diluted weighted-average shares outstanding 101,277,404 105,918,893 101,312,741 106,780,280
Basic Earnings (Losses) Per Share:
Net income (loss) $ (1.59) $ 2.84 $ (4.93) $ 4.23
Net income (loss) attributable to noncontrolling interests 0 0 0 0
Net income (loss) attributable to Hyatt Hotels Corporation $ (1.59) $ 2.84 $ (4.93) $ 4.23
Diluted Earnings (Losses) Per Share:
Net income (loss) $ (1.59) $ 2.80 $ (4.93) $ 4.17
Net income (loss) attributable to noncontrolling interests 0 0 0 0
Net income (loss) attributable to Hyatt Hotels Corporation $ (1.59) $ 2.80 $ (4.93) $ 4.17


	Three Months Ended March 31,
	2021		2020
Numerator:
Net loss	$	(304)	$	(103)
Net loss attributable to noncontrolling interests	0		0
Net loss attributable to Hyatt Hotels Corporation	$	(304)	$	(103)
Denominator:
Basic weighted-average shares outstanding	101,525,935		101,402,348
Share-based compensation	0		0
Diluted weighted-average shares outstanding	101,525,935		101,402,348
Basic Losses Per Share:
Net loss	$	(2.99)	$	(1.02)
Net loss attributable to noncontrolling interests	0		0
Net loss attributable to Hyatt Hotels Corporation	$	(2.99)	$	(1.02)
Diluted Losses Per Share:
Net loss	$	(2.99)	$	(1.02)
Net loss attributable to noncontrolling interests	0		0
Net loss attributable to Hyatt Hotels Corporation	$	(2.99)	$	(1.02)

The computations of diluted net ~~income (loss)~~losses per share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ do not include the following shares of Class A common stock assumed to be issued as stock-settled SARs and RSUs because they are anti-dilutive.


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2020	2019	2020	2019		2021	2020
SARs	SARs	390,900	14,800	706,600	14,400	SARs	1,342,600	1,058,600
RSUs	RSUs	540,200	0	499,200	0	RSUs	658,100	470,500

18. OTHER INCOME (LOSS), NET


	Three Months Ended March 31,
	2021		2020
Unrealized gains (losses), net (Note 4)	$	8	$	(79)
Interest income	6		11
Depreciation recovery	4		6
Performance guarantee liability amortization (Note 12)	1		5

Performance guarantee expense, net (Note 12)	(1)		(26)
Credit losses (Note 4 and Note 5)	(2)		(4)






Other, net	(4)		6
Other income (loss), net	$	12	$	(81)

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~~19. OTHER INCOME (LOSS), NET~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Restructuring expenses $ (22) $ 0 $ (69) $ 0
Performance guarantee expense, net (Note 13) (8) (1) (47) (25)
Credit losses (Note 2 and Note 13) (8) 0 (26) 0
Release of contingent consideration liability 0 2 0 29
Release and amortization of debt repayment guarantee liability 0 1 1 18
Realized gains (Note 5) 1 1 5 1
Performance guarantee liability amortization (Note 13) 1 5 7 14
Depreciation recovery 6 7 18 19
Interest income (Note 5) 6 6 23 18
Unrealized gains (losses), net (Note 5) 8 3 (36) 23
Other, net (3) 1 10 7
Other income (loss), net $ (19) $ 25 $ (114) $ 104

During the three and nine months ended September 30, 2020, we recognized $22 million and $69 million, respectively, of restructuring expenses, including severance, insurance benefits, outplacement, and other related costs, due to operational changes as a result of the COVID-19 pandemic.

During the nine months ended September 30, 2019, we released $29 million of contingent consideration liability for management agreements previously acquired in conjunction with Two Roads Hospitality LLC ("Two Roads") in which specific actions were not completed or payment was no longer probable.

During the nine months ended September 30, 2019, we recognized a $15 million release of our debt repayment guarantee liability for a hotel property in Washington State as the debt was refinanced, and we are no longer guarantor.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about the Company's plans, strategies, and financial ~~performance, prospects,~~performance; the impact of the COVID-19 pandemic and pace of recovery; the amount by which the Company intends to reduce its real estate asset base and the anticipated timeframe for such asset dispositions; and prospective or future ~~events and~~events. Forward-looking statements involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently ~~uncertain.~~ uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the factors discussed in our filings with the SEC, including our Annual Report on Form ~~10-K~~10-K; the duration of the COVID-19 pandemic and ~~our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2020 and June 30, 2020; the~~its short and longer-term effects, ~~of the COVID-19 pandemic,~~ including on the demand for travel, transient and group business, and levels of consumer ~~confidence;~~confidence, and the pace of recovery following the pandemic, any additional resurgence, or COVID-19 variants; the impact of the COVID-19 pandemic, any additional resurgence, or COVID-19 variants, and the impact of actions that governments, businesses, and individuals take in response, ~~to the COVID-19 pandemic or any resurgence, including limiting or banning travel; the impact of the COVID-19 pandemic, and actions taken in response to the COVID-19 pandemic or any resurgence,~~ on global and regional economies, travel limitations or bans, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the broad distribution of COVID-19 vaccines and wide acceptance by the general population of such vaccines; the ability of third-party owners, franchisees, or hospitality venture partners to successfully navigate the impacts of the COVID-19 ~~pandemic; the duration of the~~pandemic, any additional resurgence, or COVID-19 ~~pandemic and the pace of recovery following the pandemic or any resurgence;~~variants; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and the pace of economic recovery following economic downturns; levels of spending in business and leisure segments as well as consumer confidence;

declines in occupancy and average daily ~~rate;~~rate ("ADR"); limited visibility with respect to future bookings; loss of key personnel; domestic and international political and ~~geopolitical~~geo-political conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters such as earthquakes, tsunamis, tornadoes, hurricanes, floods, wildfires, oil spills,

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nuclear incidents, and global outbreaks of pandemics or contagious diseases, such as the COVID-19 pandemic, or fear of such ~~outbreaks, such as the COVID-19 pandemic;~~outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, ~~and common stock~~share repurchase program, and ~~quarterly~~ dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party property owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and the introduction of new brand concepts; the timing of acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute on our strategy to expand our management and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; declines in the value of our real estate assets; unforeseen terminations of our management or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates and operating costs; foreign exchange rate fluctuations or currency restructurings; lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, including as a result of the COVID-19 pandemic, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; and violations of regulations or laws related to our franchising business.

These factors are not necessarily all of the important factors that could cause our actual results, performance, or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our business, financial condition, results of operations, or cash flows. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions, or changes in other

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factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The following discussion should be read in conjunction with the Company's condensed consolidated financial statements and accompanying Notes, which appear elsewhere in this Quarterly Report on Form 10-Q.

Executive Overview

We provide hospitality and other services on a worldwide basis through the ~~development, ownership,~~ operation, management, franchising, ownership, development, and licensing of hospitality ~~and wellness-related~~ businesses. We ~~develop, own,~~ operate, manage, franchise, own, lease, develop, license, or provide services to a portfolio of properties consisting of full service hotels, select service hotels, resorts, and other properties, including ~~branded spas and fitness studios, and~~ timeshare, fractional, and other forms of residential, vacation, and condominium ownership units.

At ~~September 30, 2020,~~March 31, 2021, our worldwide hotel portfolio consisted of ~~955~~993 full and select service hotels ~~(229,293~~(238,247 rooms), including:

•~~414~~418 managed properties ~~(127,124~~(129,429 rooms), all of which we operate under management and hotel services agreements with third-party property owners;

•~~474~~503 franchised properties ~~(78,036~~(83,498 rooms), all of which are owned by third parties that have franchise agreements with us and are operated by third parties;

•32 owned properties ~~(13,534~~(13,841 rooms) (including 1 consolidated hospitality venture), 1 finance leased property (171 rooms), and 6 operating leased properties (2,086 rooms), all of which we manage; ~~and~~

•26 managed properties and 2 franchised properties owned or leased by unconsolidated hospitality ventures ~~(8,342~~(8,207 rooms).; and

~~Table~~•5 franchised properties (1,015 rooms) that are operated by an unconsolidated hospitality venture in connection with a master license agreement by Hyatt, 3 of ~~Contents~~these properties (669 rooms) are leased by the unconsolidated hospitality venture.

Our worldwide property portfolio also included:

•8 all-inclusive resorts (3,153 rooms), all of which are owned by a third party in which we hold common shares and which operates the resorts under franchise agreements with us;

•16 vacation ownership properties under the Hyatt Residence Club brand and operated by third parties;

•3538 residential properties, which consist of branded residences and serviced apartments. We manage all of the serviced apartments and those branded residential units that participate in a rental program with an adjacent Hyatt-branded hotel; and

•3736 condominium ownership properties for which we provide services for the rental programs and/or homeowners associations (including 1 unconsolidated hospitality venture).

~~Our worldwide property portfolio also included branded spas and fitness studios, comprised of managed and leased locations.~~ 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.

We report our consolidated operations in U.S. dollars. Amounts are reported in millions, unless otherwise noted. Percentages may not recompute due to rounding, and percentage changes that are not meaningful are presented as "NM". Constant currency disclosures used throughout Management's Discussion and Analysis of Financial Condition and Results of Operations are non-GAAP measures. See "—Non-GAAP Measures" for further discussion of constant currency disclosures. We manage our business within four reportable segments as described below:

•Owned and leased hotels, which consists of our owned and leased full service and select service hotels and, for purposes of segment Adjusted EBITDA, our pro rata share of the Adjusted EBITDA of our unconsolidated hospitality ventures, based on our ownership percentage of each venture;

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•Americas management and franchising ("Americas"), which consists of our management and franchising of properties located in the United States, Latin America, Canada, and the ~~Caribbean;~~Caribbean, as well as our residential management operations;

•ASPAC management and franchising ("ASPAC"), which consists of our management and franchising of properties located in Southeast Asia, Greater China, Australia, New Zealand, South Korea, Japan, and Micronesia; and

•EAME/SW Asia management and franchising ("EAME/SW Asia"), which consists of our management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia, and Nepal.

Within corporate and other, we include the results ~~of Exhale, results~~ from our co-branded credit ~~cards,~~card program, the results of the Exhale spa and fitness business, which was sold during the year ended December 31, 2020, and unallocated corporate expenses. See Part I, Item 1 "Financial Statements—Note 1716 to the Condensed Consolidated Financial Statements" for further discussion of our segment ~~structure, including changes that were effective January 1, 2020.~~structure.

Overview of the Impact of the COVID-19 Pandemic

The global spread and ~~unprecedented~~ impact of the COVID-19 pandemic are complex and continuously evolving, resulting in significant disruption to our business, the lodging and hospitality industries, and the global economy. The pandemic has led governments and other authorities around the world to impose measures intended to control its spread, including restrictions on ~~freedom of movement,~~large gatherings of ~~large numbers of~~ people, ~~and business operations such as~~ travel bans, border closings, business closures and restrictions, quarantines, shelter-in-place orders, and social distancing measures. As a result, the COVID-19 pandemic and its ~~consequences~~impacts have significantly reduced global travel and demand for hotel rooms and travel experiences and have had a material detrimental impact on global commercial activity across the travel, lodging, and hospitality industries, ~~all of~~ which has had, and is expected to continue to have, a material impact on our business, results of operations, cash flows, and ~~cash flows.~~financial condition.

WeWhile we have seen continued improvement during the quarter ended March 31, 2021, we expect demand could continue to be uneven in the near term, and we do not expect a material improvement in results until business traveler and ~~general~~ consumer confidence related to risks associated with the COVID-19 pandemic improves and various ~~governmental~~government and corporate restrictions on travel and freedom of movement ~~as well as social distancing and other precautionary requirements,~~ are lifted. ~~As such, we~~We have, at times, suspended operations at certain hotels experiencing low levels of occupancy for different lengths of time across our portfolio. As restrictions ~~are~~have been lifted, we have been able to reopen the majority of hotels where operations were previously suspended, but as cases of COVID-19 increase in various regions around the ~~COVID-19 pandemic increase,~~globe, restrictions have been

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re-established in certain markets, which have created, and may continue to create, demand ~~volatility.~~volatility and may result in the subsequent re-suspension of operations at certain hotels. At March 31, 2021, 96% of our system-wide hotels were open compared to 94% at December 31, 2020. Even once all restrictions on global travel have been lifted and vaccines are widely available and distributed, there remains considerable uncertainty as to the pace of recovery of demand for lodging and travel-related experiences.

We are monitoring ~~the continuously evolving situation and~~ guidance from international and domestic authorities, including federal, state, and local public health authorities, and ~~we may be required or elect to take additional actions based on their recommendations. Under these circumstances,~~ there may be developments that require us to further adjust our operations.

Overview of Financial Results

For the quarter ended ~~September 30, 2020,~~March 31, 2021, we reported a net loss attributable to Hyatt Hotels Corporation of ~~$161~~$304 million, representing a ~~$457~~$201 million decrease compared to the quarter ended ~~September 30, 2019, primarily~~March 31, 2020, driven by decreased operating performance as a result of the COVID-19 ~~pandemic.~~pandemic and a non-cash tax valuation allowance recognized in the quarter.

Consolidated revenues decreased ~~$816~~$555 million or ~~67.2%~~55.9% ($~~817~~557 million, or ~~67.2%~~56.0%, excluding the impact of currency) during the quarter ended ~~September 30, 2020~~March 31, 2021 compared to the quarter ended ~~September 30, 2019.~~March 31, 2020. The decreases in owned and leased hotels revenues; management, franchise, and other ~~fees,~~fees; other ~~revenues,~~revenues; and revenues for the reimbursement of costs incurred on behalf of managed and franchised properties of ~~$96~~$219 million, ~~$18~~$45 million, $16 million, and ~~$350~~$273 million, respectively, for the quarter ended ~~September 30, 2020~~March 31, 2021, compared to the quarter ended ~~September 30, 2019,~~March 31, 2020, were primarily driven by the impact of the COVID-19 pandemic. ~~Owned and leased hotels revenues decreased $350 million due to the impact of the COVID-19 pandemic and dispositions in 2019.~~

Across our portfolio of properties, we have continued to experience significant disruption during the ~~third~~first quarter, with ~~intermittent recovery within certain markets~~sequential improvement in demand over the course of the quarter, largely driven by leisure travel within certain markets, and we expect varied levels of recovery ~~to continue~~ over the remainder of ~~2020 and into~~ 2021. The pace of recovery is

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difficult to predict at this time and is highly dependent on a variety of factors including group business and corporate travel demand, consumer confidence regarding the safety of travel, the distribution and broad acceptance of COVID-19 vaccines, and the global economic impact resulting from the pandemic.

At our full service hotels in the Americas, including owned and leased hotels, we have seen significant group cancellations concentrated in near-term booking dates, and we have started to see a meaningful increase in cancellations for the first half of 2021. We anticipate cancellation activity to continue, especially for larger corporate meetings, as long as the COVID-19 pandemic is ongoing and travel restrictions remain in place. While we continue to see long-term group bookings production ~~booking volumes for dates into 2021 and beyond have been uneven and~~improve compared to 2020, though still significantly lower than pre-COVID-19 pandemic levels. The revenue associated with group booking demand is dependent on travel restrictions related to gatherings being lifted and confidence from meeting planners and businesses that their attendees are comfortable traveling.

Our consolidated Adjusted EBITDA for the quarter ended ~~September 30, 2020~~March 31, 2021 decreased ~~$211~~$106 million, compared to the ~~third~~first quarter of ~~2019.~~2020, driven by the impacts of the COVID-19 pandemic. See "—Segment Results" for further discussion. For the remainder of the year, we expect Adjusted EBITDA to be negatively impacted by the expected declines in revenues across our portfolio of properties and ongoing non-controllable fixed expenses at our owned and leased hotels. We anticipate this will be partially offset by favorability in selling, general, and administrative expenses as a result of decreased payroll and related costs and the elimination of all non-essential spending. See "—Non-GAAP Measures" for an explanation of how we utilize Adjusted EBITDA, why we present it, and material limitations on its usefulness, as well as a reconciliation of our net ~~income (loss)~~loss attributable to Hyatt Hotels Corporation to EBITDA and a reconciliation of EBITDA to consolidated Adjusted EBITDA.

During the quarter ended ~~September 30, 2020,~~March 31, 2021, there were no returns of capital to our shareholders through share repurchases, and there was no quarterly dividend ~~payment. We~~payment as we suspended all share repurchase activity ~~effective~~and dividend payments beginning in March ~~3, 2020, and we also suspended all dividend payments. The terms of the Revolver Amendment restrict our ability to repurchase shares and pay dividends through the first quarter of 2021.~~2020.

We expect to successfully execute plans announced in March 2019 to realize proceeds of approximately $1.5 billion from the sale of real estate by March 2022 as part of our capital strategy. As of ~~September 30, 2020,~~March 31, 2021, we have realized ~~over $950 million~~proceeds of ~~proceeds~~approximately $1 billion towards this goal from the disposition of owned assets.

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Hotel Chain Revenue per Available Room ("RevPAR") Statistics.


			RevPAR				RevPAR
			Three Months Ended September 30,				Three Months Ended March 31,
(Comparable locations)	(Comparable locations)	Number of comparable hotels (1)	2020			vs. 2019 (in constant $)		(Comparable locations)	Number of comparable hotels (1)	2021		vs. 2020 (in constant $)
System-wide hotels	System-wide hotels	810	$	38		(72.0)	%	System-wide hotels	889	$	46	(48.9)	%
Owned and leased hotels	Owned and leased hotels	37	$	28		(83.1)	%	Owned and leased hotels	35	$	48	(64.4)	%
Americas full service hotels	Americas full service hotels	209	$	28		(82.7)	%	Americas full service hotels	216	$	44	(61.8)	%
Americas select service hotels	Americas select service hotels	382	$	47		(57.8)	%	Americas select service hotels	416	$	48	(34.7)	%
ASPAC full service hotels	ASPAC full service hotels	97	$	59		(58.9)	%	ASPAC full service hotels	111	$	57	(19.8)	%
ASPAC select service hotels	ASPAC select service hotels	20	$	38		(29.3)	%	ASPAC select service hotels	26	$	32	40.9	%
EAME/SW Asia full service hotels	EAME/SW Asia full service hotels	85	$	32		(76.1)	%	EAME/SW Asia full service hotels	102	$	37	(58.2)	%
EAME/SW Asia select service hotels	EAME/SW Asia select service hotels	17	$	25		(63.8)	%	EAME/SW Asia select service hotels	18	$	29	(46.7)	%
(1) The number of comparable hotels presented above includes owned and leased hotels and hotels that have temporarily suspended operations due to the COVID-19 pandemic.	(1) The number of comparable hotels presented above includes owned and leased hotels and hotels that have temporarily suspended operations due to the COVID-19 pandemic.				(1) The number of comparable hotels presented above includes owned and leased hotels and hotels that have temporarily suspended operations due to the COVID-19 pandemic.

System-wide RevPAR decreased ~~72.0%~~48.9% during the three months ended ~~September 30, 2020,~~March 31, 2021, compared to the three months ended ~~September 30, 2019,~~March 31, 2020, driven by decreased group and transient demand due to the impact of the COVID-19 pandemic, ~~on group~~which significantly affected most regions beginning in March 2020. System-wide RevPAR had double-digit percentage growth for the month of March 2021 compared to the same period in 2020, as leisure demand continues to drive recovery and travel restrictions have eased in certain markets due to lower COVID-19 cases coupled with an increase in vaccine distribution. The ASPAC region had triple-digit percentage RevPAR growth for the month of March 2021, compared to the same period in 2020, primarily due to improved transient demand worldwide. During the third quarter, hotel operations that were previously suspended continue to resume across the portfolio, and at September 30, 2020, operations had resumed at 92% of our system-wide hotels compared to 80% at June 30, 2020.led by Greater China. See "—Segment Results" for ~~detailed~~ discussion of RevPAR by segment.

~~During the three months ended September 30, 2020, compared to the three months ended June 30, 2020, all segments experienced triple-digit percentage~~Our comparable system-wide hotels RevPAR ~~growth, primarily driven by increased demand. RevPAR for our Americas comparable full service~~of $46 and ~~select service hotels benefited from improved demand in certain markets within the United States, largely driven by hotel re-openings. RevPAR in ASPAC trended favorably~~$90 for the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~as domestic demand continued to improve in Greater China. Hotel re-openings, along with the summer holiday, contributed to occupancy trending favorably in EAME/SW Asia~~respectively, remain significantly below pre-pandemic levels of previously reported comparable system-wide hotels RevPAR of $132 for the three months ended September 30, 2020 compared to the three months ended June 30, 2020. RevPAR at our comparable owned and leased hotels moderately increased over the course of the third quarter of 2020 as hotels resumed operations. See "—Segment Results" for further discussion of RevPAR by segment.

~~As various parts of the world are experiencing a resurgence in positive COVID-19 cases and continue to enforce travel restrictions,~~March 31, 2019. While there remains uncertainty surrounding significant near-term ~~improvement. It~~improvement, it is our expectation that business transient and group business ~~may be minimal in~~will continue to gradually improve over the coming ~~months, but leisure~~months. Leisure transient demand may remain consistent ~~with third quarter levels~~ or ~~gradually improve. However,~~moderately improve over 2021, especially during the summer months, but demand may be varied and irregular in the current environment. ~~Preliminary estimates indicate system-wide RevPAR for the month ended October 31, 2020 reflects a modest sequential improvement compared to the third quarter~~

Table of ~~2020.~~ Contents

Results of Operations

Three ~~and Nine~~ Months Ended ~~September 30, 2020~~March 31, 2021 Compared with Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020

Discussion on Consolidated Results

For additional information regarding our consolidated results, ~~please~~ refer to our condensed consolidated statements of income (loss) included in this quarterly report. Consolidated results were impacted significantly by the COVID-19 pandemic during the three ~~and nine~~ months ended ~~September 30, 2020 compared to the three~~March 31, 2021 and ~~nine months ended September 30, 2019.~~March 31, 2020. See "—Segment Results" for further discussion.

The impact from our investments in marketable securities held to fund our deferred compensation plans through rabbi trusts was recognized on the various financial statement line items discussed below and had no impact on net ~~income (loss). See "Net gains and interest income from marketable securities held to fund rabbi trusts" for the allocation of the impact to the various financial statement line items.~~

~~Table of Contents~~

loss.

Owned and leased hotels revenues.


		Three Months Ended September 30,											Three Months Ended March 31,
		2020		2019		Better / (Worse)				Currency Impact			2021		2020		Better / (Worse)				Currency Impact
Comparable owned and leased hotels revenues	Comparable owned and leased hotels revenues	$	75	$	388	$	(313)	(80.5)	%	$	1	Comparable owned and leased hotels revenues	$	101	$	301	$	(200)	(66.4)	%	$	2
Non-comparable owned and leased hotels revenues	Non-comparable owned and leased hotels revenues	5		42		(37)		(90.0)	%	—		Non-comparable owned and leased hotels revenues	3		22		(19)		(86.3)	%	—
Total owned and leased hotels revenues	Total owned and leased hotels revenues	$	80	$	430	$	(350)	(81.4)	%	$	1	Total owned and leased hotels revenues	$	104	$	323	$	(219)	(67.8)	%	$	2

Nine Months Ended September 30,
2020 2019 Better / (Worse) Currency Impact
Comparable owned and leased hotels revenues $ 417 $ 1,242 $ (825) (66.4) % $ (4)
Non-comparable owned and leased hotels revenues 5 148 (143) (96.8) % (2)
Total owned and leased hotels revenues $ 422 $ 1,390 $ (968) (69.6) % $ (6)

Comparable owned and leased hotels revenues decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, driven by the COVID-19 pandemic beginning in the latter half of the first quarter of 2020, resulting in decreased demand ~~and suspended hotel operations~~ at a significant number of ~~hotels due to the COVID-19 pandemic.~~hotels. For the same ~~periods,~~period, non-comparable owned and leased hotels revenues decreased due to ~~dispositions.~~the extended closure of an owned hotel. See "—Segment Results" for further discussion.

~~Table of Contents~~

Management, franchise, and other fees revenues.


		Three Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Base management fees	Base management fees	$	19	$	64	$	(45)	(70.2)	%	Base management fees	$	24	$	47	$	(23)	(48.8)	%
Incentive management fees	Incentive management fees	6		33		(27)		(81.3)	%	Incentive management fees	8		8		—		2.2	%
Franchise fees	Franchise fees	15		37		(22)		(59.0)	%	Franchise fees	17		27		(10)		(38.0)	%

Management and franchise fees	Management and franchise fees	40		134		(94)		(69.8)	%	Management and franchise fees	49		82		(33)		(40.6)	%
Other fees revenues	Other fees revenues	12		14		(2)		(17.1)	%	Other fees revenues	14		26		(12)		(46.7)	%
Management, franchise, and other fees	Management, franchise, and other fees	$	52	$	148	$	(96)	(65.0)	%	Management, franchise, and other fees	$	63	$	108	$	(45)	(42.0)	%

Three Months Ended September 30,
2020 2019 Better / (Worse)
Management, franchise, and other fees $ 52 $ 148 $ (96) (65.0) %
Contra revenue (7) (5) (2) (20.5) %
Net management, franchise, and other fees $ 45 $ 143 $ (98) (68.3) %

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Base management fees $ 74 $ 195 $ (121) (62.2) %
Incentive management fees 12 106 (94) (88.5) %
Franchise fees 48 107 (59) (54.8) %
Management and franchise fees 134 408 (274) (67.1) %
Other fees revenues 46 39 7 19.2 %
Management, franchise, and other fees $ 180 $ 447 $ (267) (59.7) %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Management, franchise, and other fees	Management, franchise, and other fees	$	180	$	447	$	(267)	(59.7)	%	Management, franchise, and other fees	$	63	$	108	$	(45)	(42.0)	%
Contra revenue	Contra revenue	(20)		(16)		(4)		(21.4)	%	Contra revenue	(8)		(6)		(2)		(24.6)	%
Net management, franchise, and other fees	Net management, franchise, and other fees	$	160	$	431	$	(271)	(62.8)	%	Net management, franchise, and other fees	$	55	$	102	$	(47)	(46.3)	%

The decreases in base management fees and franchise fees for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, were ~~primarily~~ driven by decreased demand ~~and suspended hotel operations~~ at a significant number of hotels as a result of the COVID-19 pandemic. Other fees revenues decreased for the three months ended March 31, 2021, compared to the three months ended March 31, 2020, driven by decreases in license fees in the ASPAC and Americas management and franchising segments. See "—Segment Results" for further discussion. The increase in other fees during the nine months ended September 30, 2020, compared to the same period in the prior year, was primarily driven by license fees in the Americas and ASPAC management and franchising segments, partially offset by a decrease in license fees related to our co-branded credit cards.

Other revenues. During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, other revenues decreased ~~$18~~$16 million, ~~and $53 million, respectively,~~ primarily driven by the impact of the COVID-19 pandemic ~~on our residential management and Exhale operations.~~

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on our residential management operations and the sale of the Exhale spa and fitness business during the fourth quarter of 2020.

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


		Three Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Change					2021		2020		Change
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	$	267	$	617	$	(350)	(56.8)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	$	260	$	533	$	(273)	(51.2)	%
Less: rabbi trust impact	Less: rabbi trust impact	(10)		—		(10)		NM		Less: rabbi trust impact	(5)		20		(25)		(125.1)	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	$	257	$	617	$	(360)	(58.4)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	$	255	$	553	$	(298)	(53.9)	%

Nine Months Ended September 30,
2020 2019 Change
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties $ 1,015 $ 1,826 $ (811) (44.5) %
Less: rabbi trust impact (11) (17) 6 37.5 %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties excluding rabbi trust impact $ 1,004 $ 1,809 $ (805) (44.5) %

Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, primarily driven by the impact of the COVID-19 pandemic and ~~the~~ associated ~~suspension of hotel operations at a number of hotels as well as~~ cost containment initiatives, ~~in 2020, both of~~ which led to lower reimbursements for payroll and related costs and expenses related to system-wide services provided to managed and franchised properties. This decrease was partially offset by a $25 million increase in the value of the marketable securities held to fund our deferred compensation plans through rabbi trusts due to improved market performance.

Owned and leased hotels expenses.


	Three Months Ended March 31,
	2021		2020		Better / (Worse)
Comparable owned and leased hotels expenses	$	111	$	247	$	136	54.7	%
Non-comparable owned and leased hotels expenses	11		32		21		66.1	%
Rabbi trust impact	2		(7)		(9)		(123.3)	%
Total owned and leased hotels expenses	$	124	$	272	$	148	54.3	%

The ~~decreases~~decrease in ~~revenues for the reimbursement of costs incurred on behalf of managed~~comparable owned and ~~franchised properties for~~leased hotels expenses during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, ~~include~~was primarily driven by the aforementioned decreased demand at a ~~$10 million increase~~significant number of hotels and ~~a $6 million decrease, respectively,~~related suspension of operations at certain hotels due to the COVID-19 pandemic. For the same period, non-comparable owned and leased hotels expenses decreased due to the extended closure of an owned hotel. See "—Segment Results" for further discussion.

Other direct costs. During the three months ended March 31, 2021, compared to the three months ended March 31, 2020, other direct costs decreased $11 million, primarily driven by the impact of the COVID-19 pandemic on our residential management operations and the sale of the Exhale spa and fitness business during the fourth quarter of 2020.

Selling, general, and administrative expenses.


	Three Months Ended March 31,
	2021		2020		Change
Selling, general, and administrative expenses	$	95	$	47	$	48	102.0	%
Less: rabbi trust impact	(10)		41		(51)		(124.4)	%
Less: stock-based compensation expense	(28)		(15)		(13)		(85.3)	%
Adjusted selling, general, and administrative expenses	$	57	$	73	$	(16)	(22.5)	%

Selling, general, and administrative expenses increased during the three months ended March 31, 2021, compared to the same period in the prior year, primarily driven by the improved market performance of the underlying investments in marketable securities held to fund our deferred compensation plans through rabbi ~~trusts.~~

~~Owned~~trusts and ~~leased hotels expense.~~

Three Months Ended September 30,
2020 2019 Better / (Worse)
Comparable owned and leased hotels expense $ 120 $ 311 $ 191 61.3 %
Non-comparable owned and leased hotels expense 8 35 27 79.5 %
Rabbi trust impact 3 — (3) NM
Total owned and leased hotels expense $ 131 $ 346 $ 215 62.2 %

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Comparable owned and leased hotels expense $ 480 $ 948 $ 468 49.3 %
Non-comparable owned and leased hotels expense 12 117 105 89.8 %
Rabbi trust impact 3 5 2 48.0 %
Total owned and leased hotels expense $ 495 $ 1,070 $ 575 53.7 %

~~The decreases~~an increase in ~~comparable owned and leased hotels~~stock-based compensation expense, ~~which include an insignificant and $4 million net favorable currency impact~~primarily due to lapping a reversal of previously recognized stock-based compensation expense related to certain PSU awards during the three ~~and nine~~ months ended September 30, 2020, respectively, compared to the same periods in the prior year, were primarily driven by the aforementioned decreased demand and suspension of hotel operations at a number of hotels. For the same periods, non-comparable owned and leased hotels expense decreased due to dispositions. See "—Segment Results" for further discussion.March 31, 2020.

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~~Other direct costs.~~During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended September 30, 2019, other direct costs decreased $19 million and $53 million, respectively, primarily driven by the impact of the COVID-19 pandemic on our residential management and Exhale operations as well as decreases related to our co-branded credit card program from lower point transfers.

~~Selling, general, and administrative expenses.~~

Three Months Ended September 30,
2020 2019 Change
Selling, general, and administrative expenses $ 69 $ 83 $ (14) (16.7) %
Less: rabbi trust impact (19) — (19) NM
Less: stock-based compensation expense (3) (4) 1 25.5 %
Adjusted selling, general, and administrative expenses $ 47 $ 79 $ (32) (40.6) %

Nine Months Ended September 30,
2020 2019 Change
Selling, general, and administrative expenses $ 217 $ 306 $ (89) (29.1) %
Less: rabbi trust impact (20) (36) 16 43.7 %
Less: stock-based compensation expense (20) (28) 8 28.6 %
Adjusted selling, general, and administrative expenses $ 177 $ 242 $ (65) (27.1) %

~~Selling,~~March 31, 2020, Adjusted selling, general, and administrative expenses decreased ~~during the three and nine months ended September 30, 2020, compared to the same periods in the prior year, primarily due to significant decreases in expenses~~ as a result of cost containment initiatives that primarily drove decreases in ~~2020, primarily~~ payroll and related ~~costs, and integration related costs incurred in 2019 associated with the acquisition of Two Roads, partially offset by an increase in bad debt expense.~~

The decreases in selling, general, and administrative expenses during the three and nine months ended September 30, 2020, compared to the same periods in the prior year, include a $19 million increase and a $16 million decrease, respectively, due to the market performance of the underlying investments in marketable securities held to fund our deferred compensation plans through rabbi trusts.costs.

Adjusted selling, general, and administrative expenses exclude the impact of ~~expenses related to~~ deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted selling, general, and administrative expenses, as we define it, is a non-GAAP measure. See "—Non-GAAP Measures" for further discussion of Adjusted selling, general, and administrative expenses.

~~Table of Contents~~

Costs incurred on behalf of managed and franchised properties.


		Three Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Change					2021		2020		Change
Costs incurred on behalf of managed and franchised properties	Costs incurred on behalf of managed and franchised properties	$	278	$	633	$	(355)	(56.1)	%	Costs incurred on behalf of managed and franchised properties	$	277	$	555	$	(278)	(50.1)	%
Less: rabbi trust impact	Less: rabbi trust impact	(10)		—		(10)		NM		Less: rabbi trust impact	(5)		20		(25)		(125.1)	%
Costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	Costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	$	268	$	633	$	(365)	(57.6)	%	Costs incurred on behalf of managed and franchised properties excluding rabbi trust impact	$	272	$	575	$	(303)	(52.7)	%

Nine Months Ended September 30,
2020 2019 Change
Costs incurred on behalf of managed and franchised properties $ 1,068 $ 1,871 $ (803) (42.9) %
Less: rabbi trust impact (11) (17) 6 37.5 %
Costs incurred on behalf of managed and franchised properties excluding rabbi trust impact $ 1,057 $ 1,854 $ (797) (43.0) %

Costs incurred on behalf of managed and franchised properties decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, driven by the impact of the COVID-19 pandemic and ~~the~~ associated ~~suspension of hotel operations at a number of hotels as well as~~ cost containment initiatives, ~~in 2020,~~ both of which led to lower reimbursements for payroll and related costs and expenses related to system-wide services provided to managed and franchised properties.

~~The decreases in costs incurred on behalf of managed and franchised properties during three and nine months ended September 30, 2020, compared to the same periods~~ This decrease was partially offset by a $25 million increase in the ~~prior year, include a $10 million increase and a $6 million decrease, respectively, due to the market performance~~value of the ~~underlying investments in~~ marketable securities held to fund our deferred compensation plans through rabbi ~~trusts.~~trusts due to improved market performance.

Net gains (losses) and interest income from marketable securities held to fund rabbi trusts.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Rabbi trust impact allocated to selling, general, and administrative expenses $ 19 $ — $ 19 NM
Rabbi trust impact allocated to owned and leased hotels expense 3 — 3 NM
Net gains and interest income from marketable securities held to fund rabbi trusts $ 22 $ — $ 22 NM


	Three Months Ended March 31,
	2021		2020		Better / (Worse)
Rabbi trust impact allocated to selling, general, and administrative expenses	$	10	$	(41)	$	51	124.4	%
Rabbi trust impact allocated to owned and leased hotels expenses	2		(7)		9		123.3	%
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts	$	12	$	(48)	$	60	124.3	%

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Rabbi trust impact allocated to selling, general, and administrative expenses $ 20 $ 36 $ (16) (43.7) %
Rabbi trust impact allocated to owned and leased hotels expense 3 5 (2) (48.0) %
Net gains and interest income from marketable securities held to fund rabbi trusts $ 23 $ 41 $ (18) (44.3) %

Net gains (losses) and interest income from marketable securities held to fund rabbi trusts increased during the three months ended ~~September 30, 2020,~~March 31, 2021, compared to the same period in prior year, driven by the ~~favorable~~aforementioned performance of the underlying invested assets. The nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, decreased due to the unfavorable performance of the underlying invested assets, partially offset by the aforementioned favorable performance

Equity earnings (losses) from unconsolidated hospitality ventures. Equity earnings (losses) from unconsolidated hospitality ventures increased $56 million during the three months ended ~~September 30, 2020~~March 31, 2021 compared to the same period in prior year. This increase is driven by a $69 million pre-tax gain recognized in connection with the acquisition of the remaining 50% interest in the entities that own Grand Hyatt São Paulo, partially offset by an increase in Hyatt's share of unconsolidated hospitality ventures' net losses.

Interest expense. Interest expense increased $24 million duringthe three months ended March 31, 2021, compared to the same period in the prior ~~year.~~

~~Table of Contents~~

~~Equity losses from unconsolidated hospitality ventures.~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 Better /
(Worse) 2020 2019 Better /
(Worse)
Hyatt's share of unconsolidated hospitality ventures net losses excluding foreign currency $ (20) $ (4) $ (16) $ (35) $ (13) $ (22)
Hyatt's share of unconsolidated hospitality ventures foreign currency net gains (losses) (1) (3) 1 (4) (17) 2 (19)
Net gains from sales activity related to unconsolidated hospitality ventures (Note 5) — — — — 8 (8)
Impairment charges related to investments in
unconsolidated hospitality ventures (Note 5) — (6) 6 (1) (7) 6
Other 3 4 (1) 8 8 —
Equity losses from unconsolidated hospitality ventures $ (20) $ (5) $ (15) $ (45) $ (2) $ (43)
(1) Foreign currency impact is driven by one of our unconsolidated hospitality ventures which holds loans denominated in a currency other than its functional currency.

~~Interest Expense.~~ ~~Interest expense increased $16 million and $29 million duringthe three and nine months ended September 30, 2020, respectively, compared to the same periods in the prior~~ year, driven by the 2025 and 2030 Notes issued during the second quarter of 2020 and the 2022 Notes issued during the third quarter ~~the 2025 Notes and the 2030 Notes issued during the second quarter, and issuance costs related to the bridge credit facility executed and terminated during the second quarter.~~of 2020. See Part I, Item 1 "Financial Statements—Note 109 to the Condensed Consolidated Financial Statements" for additional information.

Gains on sales of real estate. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, we recognized a $4 million pre-tax gain related to an unrelated third-party's investment in certain of our subsidiaries that ~~are developing a hotel,~~developed Hyatt Centric Center City Philadelphia and adjacent parking and retail space ~~in Philadelphia, Pennsylvania~~ and a $4 million pre-tax gain for the sale of a commercial building in Omaha, Nebraska. ~~During the three and nine months ended September 30, 2019, we recognized~~

~~pre-tax gains of $272 million related to the sale of Hyatt Regency Atlanta and $101 million related the sale of the~~

~~property adjacent to Grand Hyatt San Francisco and assignment of the Apple store lease.~~ See Part I, Item 1 "Financial Statements—Note 76 to the Condensed Consolidated Financial Statements" for additional information.

~~Asset impairments.~~Table of Contents During the nine months ended September 30, 2020, we recognized $38 million of goodwill impairment charges and $14 million of impairment charges related to property and equipment, operating lease right-of-use assets, and definite-lived intangibles. During the three and nine months ended September 30, 2019, we recognized $9 million and $13 million of impairment charges, respectively, related to Two Roads management agreement intangibles for contracts that terminated. See Part I, Item 1 "Financial Statements—Note 2 to the Condensed Consolidated Financial Statements" for additional information.

Other income (loss), net. Other income (loss), net ~~decreased $44 million and $218~~increased $93 million during the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 compared to the same ~~periods~~period in the prior year. See Part I, Item 1 "Financial Statements—Note 1918 to the Condensed Consolidated Financial Statements" for additional information.

Benefit (provision) for income taxes.


		Three Months Ended September 30,											Three Months Ended March 31,
		2020			2019			Better / (Worse)					2021			2020			Better / (Worse)
Income (loss) before income taxes		$	(220)		$	405		$	(625)	(154.1)	%
Loss before income taxes												Loss before income taxes	$	(118)		$	(138)		$	20	14.2	%
Benefit (provision) for income taxes	Benefit (provision) for income taxes	59			(109)			168		153.8	%	Benefit (provision) for income taxes	(186)			35			(221)		(629.6)	%
Effective tax rate	Effective tax rate	26.8		%	26.9		%			0.1	%	Effective tax rate	(156.6)		%	25.4		%			(182.0)	%

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Income (loss) before income taxes $ (688) $ 593 $ (1,281) (215.9) %
Benefit (provision) for income taxes 188 (148) 336 227.0 %
Effective tax rate 27.3 % 25.0 % (2.3) %

~~Table of Contents~~

The income tax ~~benefit~~provision of $186 million for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 is primarily ~~due~~driven by a non-cash expense to ~~net losses before income taxes. See~~recognize a full valuation allowance on U.S. federal and state deferred tax assets as further described in Part I, Item 1 "Financial Statements—Note 1211 to the Condensed Consolidated Financial ~~Statements" for additional information.~~Statements."

Segment Results

As described in Part I, Item 1 "Financial Statements—Note 1716 to the Condensed Consolidated Financial Statements," we evaluate segment operating performance using owned and leased hotels ~~revenues,~~revenues; management, franchise, and other fees ~~revenues,~~revenues; and Adjusted ~~EBITDA, and amounts for the three and nine months ended September 30, 2019 have been adjusted retrospectively for the segment changes effective January 1, 2020.~~EBITDA.

Owned and leased hotels segment.

Revenues, comparable RevPAR, and Adjusted EBITDA decreased ~~significantly~~ during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, primarily driven by the impact of the COVID-19 pandemic beginning in March 2020 at our owned and leased properties, resulting in decreased group and transient demand. At March 31, ~~2020, 18%~~2021, 85% of our owned and leased hotels were ~~open, and throughout the second and third quarters, operations have largely resumed across the portfolio, with 87% of our owned and leased hotels open at September 30, 2020.~~open.

Owned and leased hotels segment revenues.

Three Months Ended September 30,
2020 2019 Better / (Worse) Currency Impact
Comparable owned and leased hotels revenues $ 77 $ 399 $ (322) (80.5) % $ 1
Non-comparable owned and leased hotels revenues 5 42 (37) (90.0) % —
Total segment revenues $ 82 $ 441 $ (359) (81.4) % $ 1


		Nine Months Ended September 30,											Three Months Ended March 31,
		2020		2019		Better / (Worse)				Currency Impact			2021		2020		Better / (Worse)				Currency Impact
Comparable owned and leased hotels revenues	Comparable owned and leased hotels revenues	$	427	$	1,269	$	(842)	(66.3)	%	$	(4)	Comparable owned and leased hotels revenues	$	104	$	308	$	(204)	(66.4)	%	$	2
Non-comparable owned and leased hotels revenues	Non-comparable owned and leased hotels revenues	5		148		(143)		(96.8)	%	(2)		Non-comparable owned and leased hotels revenues	3		22		(19)		(86.3)	%	—

Total segment revenues	Total segment revenues	$	432	$	1,417	$	(985)	(69.5)	%	$	(6)	Total segment revenues	$	107	$	330	$	(223)	(67.7)	%	$	2

Comparable owned and leased hotels revenues decreased for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, driven by the significant impacts of the COVID-19 pandemic as described above.

The ~~decreases~~decrease in non-comparable owned and leased hotels revenues for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, ~~were~~was primarily driven by the ~~dispositions~~extended closure of ~~Hyatt Regency Atlanta and Grand Hyatt Seoul in the latter half of 2019.~~an owned hotel.

Three Months Ended September 30,
RevPAR Occupancy ADR
2020 vs. 2019
(in constant $) 2020 vs. 2019 2020 vs. 2019
(in constant $)
Comparable owned and leased hotels $ 28 (83.1) % 14.6 % (60.5)% pts $ 194 (13.1) %

Nine Months Ended September 30,
RevPAR Occupancy ADR
2020 vs. 2019
(in constant $) 2020 vs. 2019 2020 vs. 2019
(in constant $)
Comparable owned and leased hotels $ 54 (68.9) % 24.3 % (51.5)% pts $ 224 (2.9) %

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	Three Months Ended March 31,
	RevPAR		Occupancy			ADR
	2021			vs. 2020 (in constant $)		2021		vs. 2020	2021		vs. 2020 (in constant $)
Comparable owned and leased hotels	$	48		(64.4)	%	28.1	%	(27.3)% pts	$	170	(29.9)	%

The ~~declines~~decline in RevPAR at our comparable owned and leased hotels during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, ~~were~~was driven by ~~the temporary suspension of operations at certain owned and leased hotels as well as~~ low demand ~~both~~ due to the impact of the COVID-19 pandemic. The comparable owned and leased hotel portfolio overall showed signs of recovery during the three months ended March 31, 2021 with sequential monthly increases in RevPAR, driven by leisure demand with notable increases toward the end of the quarter.

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During the three ~~and nine~~ months ended ~~September 30, 2020, no properties were~~March 31, 2021, one property was removed from ~~the~~ comparable owned and leased hotels ~~results.~~results as the property has been closed for an extended period.

Owned and leased hotels segment Adjusted EBITDA.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Owned and leased hotels Adjusted EBITDA $ (53) $ 60 $ (113) (187.6) %
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA (3) 13 (16) (127.5) %
Segment Adjusted EBITDA $ (56) $ 73 $ (129) (177.4) %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Owned and leased hotels Adjusted EBITDA	Owned and leased hotels Adjusted EBITDA	$	(93)	$	253	$	(346)	(136.7)	%	Owned and leased hotels Adjusted EBITDA	$	(25)	$	28	$	(53)	(187.5)	%
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA		(7)		38		(45)		(119.5)	%
Pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA										Pro rata share of unconsolidated hospitality ventures' Adjusted EBITDA	(4)		6		(10)		(164.2)	%
Segment Adjusted EBITDA	Segment Adjusted EBITDA	$	(100)	$	291	$	(391)	(134.5)	%	Segment Adjusted EBITDA	$	(29)	$	34	$	(63)	(183.5)	%

Owned and leased hotels Adjusted EBITDA. The ~~decreases~~decrease in Adjusted EBITDA at our owned and leased hotels for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, ~~were~~was primarily driven by the aforementioned ~~decreases in revenues. Within Adjusted EBITDA, the decreases in revenues were partially offset by decreases~~decrease in comparable owned and leased hotels ~~expense~~revenues. Within Adjusted EBITDA, the decrease in revenues was partially offset by a decrease in comparable owned and leased hotels expenses during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, primarily driven by a ~~reduction of~~reduced payroll and related costs due to the temporary suspension of hotel operations at a number of hotels. Adjusted EBITDA at our non-comparable owned and leased hotels decreased $9 million and $33 million during the three and nine months ended September 30, 2020, compared to the three and nine months ended September 30, 2019, respectively, primarily driven by the disposition of Hyatt Regency Atlanta in 2019.costs.

Pro rata share of unconsolidated hospitality ~~ventures~~ventures' Adjusted EBITDA. Our pro rata share of Adjusted EBITDA from our unconsolidated hospitality ventures decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in ~~2019,~~2020, primarily driven by decreased demand due to the COVID-19 pandemic.

Americas management and franchising segment.

Revenues, full service and select service RevPAR, and Adjusted EBITDA decreased ~~significantly~~ during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, driven by the impact of the COVID-19 pandemic beginning in March 2020. At March 31, ~~2020, 51%~~2021, 93% of our Americas full service hotels and ~~91%~~99% of Americas select service hotels were open, and throughout the second and third quarters, operations resumed across the portfolio, with 85% of our Americas full service hotels and 98% of Americas select service hotels open at September 30, 2020.

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open.

Americas management and franchising segment revenues.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment revenues
Management, franchise, and other fees $ 29 $ 108 $ (79) (73.5) %
Contra revenue (5) (4) (1) (14.7) %
Other revenues 4 16 (12) (74.5) %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 234 565 (331) (58.6) %
Total segment revenues $ 262 $ 685 $ (423) (61.7) %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Segment revenues	Segment revenues									Segment revenues
Management, franchise, and other fees	Management, franchise, and other fees	$	121	$	331	$	(210)	(63.6)	%	Management, franchise, and other fees	$	38	$	84	$	(46)	(53.9)	%
Contra revenue	Contra revenue	(13)		(11)		(2)		(17.9)	%	Contra revenue	(4)		(4)		—		(9.0)	%
Other revenues	Other revenues	33		71		(38)		(53.4)	%	Other revenues	17		27		(10)		(34.8)	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	904		1,688		(784)		(46.5)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	227		484		(257)		(53.0)	%
Total segment revenues	Total segment revenues	$	1,045	$	2,079	$	(1,034)	(49.8)	%	Total segment revenues	$	278	$	591	$	(313)	(52.8)	%

The decreases in management, franchise, and other fees and other revenues for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, were driven by ~~hotels with suspended operations and~~ depressed demand due to the COVID-19 pandemic.

The ~~decreases~~decrease in revenues for the reimbursement of costs incurred on behalf of managed and franchised properties for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, ~~were~~was driven by the impact of the COVID-19 pandemic ~~and the associated suspension of hotel operations at a number of hotels~~ as well as cost containment initiatives, ~~in 2020,~~ both of which led to lower reimbursements for payroll and related costs and expenses related to system-wide services provided to managed and franchised properties.

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable System-wide Hotels) 2020 vs. 2019
(in constant $) 2020 vs. 2019 2020 vs. 2019
(in constant $)
Americas full service $ 28 (82.7) % 17.7 % (59.4)% pts $ 155 (24.6) %
Americas select service $ 47 (57.8) % 44.3 % (34.6)% pts $ 105 (24.8) %

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		Nine Months Ended September 30,							Three Months Ended March 31,
		RevPAR		Occupancy			ADR		RevPAR				Occupancy	ADR
(Comparable System-wide Hotels)	(Comparable System-wide Hotels)	2020			vs. 2019 (in constant $)		2020			vs. 2019	2020				vs. 2019 (in constant $)		(Comparable System-wide Hotels)	2021		vs. 2020 (in constant $)		2021		vs. 2020	2021		vs. 2020 (in constant $)
Americas full service	Americas full service	$	50		(68.9)	%	25.7	%		(50.0)% pts	$	194			(8.4)	%	Americas full service	$	44	(61.8)	%	26.3	%	(27.4)% pts	$	166	(21.8)	%
Americas select service	Americas select service	$	48		(55.5)	%	40.9	%		(35.4)% pts	$	117			(16.9)	%	Americas select service	$	48	(34.7)	%	48.4	%	(7.3)% pts	$	99	(25.0)	%

The RevPAR decreases at our comparable system-wide full service and select service hotels during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, were due to the COVID-19 pandemic.

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RevPAR increased sequentially throughout the months in 2021, for both full service and select service hotels, driven by transient demand.

During the three months ended ~~September 30, 2020, no~~March 31, 2021, two properties were ~~removed from the comparable Americas full and select service system-wide hotel results. During the nine months ended September 30, 2020, one property left the chain and was~~ removed from the comparable Americas full service system-wide hotel results as one is undergoing a significant renovation and ~~two~~one has been closed for an extended period. No properties were removed from the comparable Americas select service system-wide hotel ~~results as one property left the chain and one property is undergoing a significant renovation.~~results.

Americas management and franchising segment Adjusted EBITDA.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ 16 $ 93 $ (77) (82.9) %

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ 81 $ 288 $ (207) (71.9) %


	Three Months Ended March 31,
	2021		2020		Better / (Worse)
Segment Adjusted EBITDA	$	28	$	68	$	(40)	(59.3)	%

The ~~decreases~~decrease in Adjusted EBITDA ~~were~~was primarily driven by the aforementioned decreases in revenues during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, partially offset by ~~reductions in~~reduced expenses as a result of cost containment initiatives, ~~in 2020,~~ primarily payroll and related costs.

ASPAC management and franchising segment.

Revenues, full service and select service RevPAR, and Adjusted EBITDA decreased significantly during the three and nine months ended September 30, 2020, compared to the three and nine months ended September 30, 2019, driven by theThe impact of the COVID-19 pandemic ~~beginning~~began in late January ~~2020. At~~2020, primarily in Greater China, and expanded throughout ASPAC, primarily Japan and South Korea, in February 2020 as hotels were operating with reduced occupancy rates due to lockdowns, travel restrictions, and quarantine measures. Recovery into 2021 has been led by improved transient demand in Greater China and at March 31, ~~2020, 88%~~2021, all hotels in Greater China and 97% of our ASPAC full and select service hotels were open. ~~Operations have resumed across the portfolio throughout the second and third quarters, with 92% of hotels in ASPAC open at September 30, 2020.~~

ASPAC management and franchising segment revenues.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment revenues
Management, franchise, and other fees $ 17 $ 32 $ (15) (47.9) %
Contra revenue — — — (37.5) %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 18 30 (12) (38.4) %
Total segment revenues $ 35 $ 62 $ (27) (43.8) %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Segment revenues	Segment revenues									Segment revenues
Management, franchise, and other fees	Management, franchise, and other fees	$	42	$	96	$	(54)	(57.0)	%	Management, franchise, and other fees	$	15	$	19	$	(4)	(21.7)	%
Contra revenue	Contra revenue	(2)		(1)		(1)		(32.4)	%	Contra revenue	(1)		(1)		—		(44.7)	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	62		80		(18)		(22.1)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	20		27		(7)		(27.6)	%
Total segment revenues	Total segment revenues	$	102	$	175	$	(73)	(41.6)	%	Total segment revenues	$	34	$	45	$	(11)	(25.9)	%

Management, franchise, and other fees decreased for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, primarily driven by ~~the COVID-19 pandemic.~~a decrease in license fees due to timing of sales of branded residential ownership units, partially offset by an increase in base and incentive management fees driven by Greater China.

The ~~decreases~~decrease in revenues for the reimbursement of costs incurred on behalf of managed and franchised properties during three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019, were~~March 31, 2020, was driven by ~~lower~~cost containment initiatives that lowered reimbursements for expenses related to system-wide services provided to managed and franchised ~~properties due to cost containment initiatives in 2020.~~properties.

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Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable System-wide Hotels) 2020 vs. 2019
(in constant $) 2020 vs. 2019 2020 vs. 2019
(in constant $)
ASPAC full service $ 59 (58.9) % 42.4 % (33.0)% pts $ 139 (26.9) %
ASPAC select service $ 38 (29.3) % 57.9 % (9.9)% pts $ 66 (17.3) %


		Nine Months Ended September 30,							Three Months Ended March 31,
		RevPAR		Occupancy			ADR		RevPAR				Occupancy	ADR
(Comparable System-wide Hotels)	(Comparable System-wide Hotels)	2020			vs. 2019 (in constant $)		2020			vs. 2019	2020				vs. 2019 (in constant $)		(Comparable System-wide Hotels)	2021		vs. 2020 (in constant $)		2021		vs. 2020	2021		vs. 2020 (in constant $)
ASPAC full service	ASPAC full service	$	53		(62.1)	%	34.4	%		(37.9)% pts	$	154			(20.2)	%	ASPAC full service	$	57	(19.8)	%	37.5	%	3.0% pts	$	151	(26.2)	%
ASPAC select service	ASPAC select service	$	28		(44.6)	%	41.0	%		(22.8)% pts	$	68			(13.8)	%	ASPAC select service	$	32	40.9	%	48.0	%	21.7% pts	$	68	(22.9)	%

Comparable ~~system-wide hotels~~full service RevPAR decreased for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the same ~~periods~~period in the prior year, driven by decreased ~~inbound travel and low~~ transient ~~demand,~~business as a result of the COVID-19 ~~pandemic.~~pandemic and travel restrictions in certain markets in the region, partially offset by stronger recovery in Greater China as a result of domestic demand. Comparable select service RevPAR increased for the three months ended March 31, 2021, compared to the same period in the prior year, driven by the aforementioned increase in domestic demand led by Greater China.

During the three months ended ~~September 30, 2020,~~March 31, 2021, one property left the chain and was removed from the comparable ASPAC full service system-wide hotel ~~results. During the nine months ended September 30, 2020,~~results and one property left the chain and was removed from the ~~comparable~~ ASPAC select service system-wide hotel ~~results, and four properties were removed from the comparable ASPAC full service system-wide hotel results, as three properties left the chain and one property experienced a seasonal closure.~~results.

ASPAC management and franchising segment Adjusted EBITDA.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ 9 $ 19 $ (10) (58.2) %

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ 15 $ 59 $ (44) (75.4) %


	Three Months Ended March 31,
	2021		2020		Better / (Worse)
Segment Adjusted EBITDA	$	5	$	8	$	(3)	(39.7)	%

The ~~decreases~~decrease in Adjusted EBITDA ~~were~~was primarily driven by the aforementioned ~~decreases~~decrease in revenues during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021 compared to the same ~~periods~~period in the prior ~~year, partially offset by reductions in expenses as a result of cost containment initiatives in 2020, primarily payroll and related costs.~~year.

EAME/SW Asia management and franchising segment.

Revenues, full service and select service RevPAR, and Adjusted EBITDA decreased ~~significantly~~ during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, driven by the impact of the COVID-19 pandemic beginning in March 2020. At March 31, ~~2020, 52%~~2021, 89% of our EAME/SW Asia full and select service hotels were open. ~~Operations have resumed across the portfolio throughout the second and third quarters, with 86% of hotels in EAME/SW Asia open at September 30, 2020.~~

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EAME/SW Asia management and franchising segment revenues.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment revenues
Management, franchise, and other fees $ 5 $ 21 $ (16) (75.2) %
Contra revenue (2) (1) (1) (31.6) %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 14 20 (6) (35.4) %
Total segment revenues $ 17 $ 40 $ (23) (58.2) %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Segment revenues	Segment revenues									Segment revenues
Management, franchise, and other fees	Management, franchise, and other fees	$	17	$	58	$	(41)	(70.2)	%	Management, franchise, and other fees	$	7	$	10	$	(3)	(35.2)	%
Contra revenue	Contra revenue	(5)		(4)		(1)		(27.6)	%	Contra revenue	(3)		(1)		(2)		(54.1)	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	46		54		(8)		(15.6)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	13		20		(7)		(34.5)	%
Total segment revenues	Total segment revenues	$	58	$	108	$	(50)	(46.6)	%	Total segment revenues	$	17	$	29	$	(12)	(40.6)	%

The ~~decreases~~decrease in management, franchise, and other fees during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019, were~~March 31, 2020, was driven by the COVID-19 pandemic.

Three Months Ended September 30,
RevPAR Occupancy ADR
(Comparable System-wide Hotels) 2020 vs. 2019
(in constant $) 2020 vs. 2019 2020 vs. 2019
(in constant $)
EAME/SW Asia full service $ 32 (76.1) % 18.6 % (51.2)% pts $ 172 (10.2) %
EAME/SW Asia select service $ 25 (63.8) % 29.4 % (48.6)% pts $ 85 (4.1) %

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		Nine Months Ended September 30,							Three Months Ended March 31,
		RevPAR		Occupancy			ADR		RevPAR				Occupancy	ADR
(Comparable System-wide Hotels)	(Comparable System-wide Hotels)	2020			vs. 2019 (in constant $)		2020			vs. 2019	2020				vs. 2019 (in constant $)		(Comparable System-wide Hotels)	2021		vs. 2020 (in constant $)		2021		vs. 2020	2021		vs. 2020 (in constant $)
EAME/SW Asia full service	EAME/SW Asia full service	$	43		(66.0)	%	25.4	%		(41.8)% pts	$	168			(9.8)	%	EAME/SW Asia full service	$	37	(58.2)	%	29.6	%	(19.4)% pts	$	124	(31.0)	%
EAME/SW Asia select service	EAME/SW Asia select service	$	30		(53.5)	%	34.1	%		(38.2)% pts	$	89			(1.4)	%	EAME/SW Asia select service	$	29	(46.7)	%	45.3	%	(15.0)% pts	$	63	(29.2)	%

Comparable system-wide hotels RevPAR decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~September 30, 2019, due to~~March 31, 2020, driven by the COVID-19 ~~pandemic.~~pandemic and associated travel restrictions.

During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, no properties were removed from the comparable EAME/SW Asia full service system-wide hotel results and one property left the chain and was removed from the comparable EAME/SW Asia ~~full service system-wide hotel results, and no properties were removed from the comparable EAME/SW Asia~~ select service system-wide hotel results.

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EAME/SW Asia management and franchising segment Adjusted EBITDA.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ (2) $ 12 $ (14) (113.4) %


	Three Months Ended March 31,
	2021		2020		Better / (Worse)
Segment Adjusted EBITDA	$	—	$	1	$	(1)	(102.5)	%

Nine Months Ended September 30,
2020 2019 Better / (Worse)
Segment Adjusted EBITDA $ (12) $ 33 $ (45) (135.4) %

The decreases in Adjusted EBITDA during the three and nine months ended September 30, 2020, compared to the same periods in the prior year, were primarily driven by the aforementioned decreases in revenues. The decrease in Adjusted EBITDA during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~September 30, 2019,~~the same period in the prior year, was ~~also~~primarily driven by ~~an increase~~the aforementioned decrease in revenues. This decrease was partially offset by cost containment initiatives that reduced expenses, primarily payroll and related costs, and prior year selling, general, and administrative expenses for reserves recognized on certain ~~receivables, partially offset by reductions in expenses as a result of cost containment initiatives in 2020, primarily payroll and related costs.~~receivables.

Corporate and other.

Three Months Ended September 30,
2020 2019 Better / (Worse)
Revenues $ 7 $ 15 $ (8) (54.8) %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties 1 2 (1) (49.1) %
Adjusted EBITDA (15) (33) 18 57.8 %


		Nine Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Better / (Worse)					2021		2020		Better / (Worse)
Revenues	Revenues	$	25	$	45	$	(20)	(43.9)	%	Revenues	$	8	$	14	$	(6)	(44.8)	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	3		4		(1)		(41.6)	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	—		2		(2)		(100.0)	%
Adjusted EBITDA	Adjusted EBITDA	(65)		(110)		45		41.7	%	Adjusted EBITDA	(24)		(27)		3		13.3	%

Revenues decreased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, primarily driven by ~~decreases in~~the sale of the Exhale ~~operations impacted by~~spa and fitness business during the ~~COVID-19 pandemic as well as decreases in revenue from point transfers related to our co-branded credit card program.~~fourth quarter of 2020.

Adjusted EBITDA increased during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, primarily due to ~~reductions in expenses as a result of~~ cost containment initiatives ~~in 2020, primarily~~that reduced expenses, predominantly payroll and related ~~costs, and integration related costs incurred in 2019 associated with the acquisition of Two Roads.~~costs.

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Non-GAAP Measures

Adjusted Earnings Before Interest Expense, Taxes, Depreciation, and Amortization ("Adjusted EBITDA") and EBITDA

We use the terms Adjusted EBITDA and EBITDA throughout this quarterly report. Adjusted EBITDA and EBITDA, as we define them, are non-GAAP measures. We define consolidated Adjusted EBITDA as net income (loss) attributable to Hyatt Hotels Corporation plus our pro rata share of unconsolidated owned and leased hospitality ~~ventures~~ventures' Adjusted EBITDA based on our ownership percentage of each owned and leased venture, adjusted to exclude the following items:

•interest expense;

•benefit (provision) for income taxes;

•depreciation and amortization;

•~~amortization of management and franchise agreement assets constituting payments to customers ("~~Contra ~~revenue");~~revenue;

•revenues for the reimbursement of costs incurred on behalf of managed and franchised properties;

•costs incurred on behalf of managed and franchised ~~properties;~~properties that we intend to recover over the long term;

•equity earnings (losses) from unconsolidated hospitality ventures;

•stock-based compensation expense;

•gains ~~(losses)~~ on sales of real estate;

•asset impairments; and

•other income (loss), net.

We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to corporate and other Adjusted EBITDA.

Our board of directors and executive management team focus on Adjusted EBITDA as a key performance and compensation measure both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our President and Chief Executive Officer, who is our CODM, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in significant part, by assessing the Adjusted EBITDA of each segment. In addition, the compensation committee of our board of directors determines the annual variable compensation for certain members of our management based in part on consolidated Adjusted EBITDA, segment Adjusted EBITDA, or some combination of both.

We believe Adjusted EBITDA is useful to investors because it provides investors the same information that we use internally for purposes of assessing our operating performance and making compensation decisions and facilitates our comparison of results before these items with results from other companies within our industry.

Adjusted EBITDA excludes certain items that can vary widely across different industries and among companies within the same industry. For instance, interest expense and benefit (provision) for income taxes are dependent upon company specifics, including capital structure, credit ratings, tax policies, and jurisdictions in which they operate, and therefore, can vary significantly across companies. Depreciation and amortization ~~as well as Contra revenue,~~ are dependent on company policies including how the assets are utilized as well as the lives assigned to the ~~assets.~~assets, and Contra revenue is dependent on company policies and strategic decisions regarding payments to hotel owners. We exclude revenues for the reimbursement of costs and costs incurred on behalf of managed and franchised properties which relate to the reimbursement of payroll costs and for system-wide services and programs that we operate for the benefit of our hotel owners as contractually we do not provide services or operate the related programs to generate a profit over the terms of the respective contracts. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Therefore, we exclude the net impact when evaluating period-over-period changes in our operating results. Adjusted EBITDA includes costs incurred on behalf of our managed and franchised properties related to system-wide services and programs that we

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do not intend to recover from hotel owners. We exclude stock-based compensation expense to remove the variability amongst companies resulting from different compensation

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plans companies have adopted. Finally, we exclude other items that are not core to our operations, such as asset impairments and unrealized and realized gains and losses on marketable securities.

Adjusted EBITDA and EBITDA are not substitutes for net income (loss) attributable to Hyatt Hotels Corporation, net income (loss), or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA and EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income generated by our business. Our management compensates for these limitations by reference to our GAAP results and using Adjusted EBITDA supplementally. See our condensed consolidated statements of income (loss) in our condensed consolidated financial statements included elsewhere in this quarterly report.

See below for a reconciliation of net income (loss) attributable to Hyatt Hotels Corporation to EBITDA and a reconciliation of EBITDA to consolidated Adjusted EBITDA.

Adjusted selling, general, and administrative expenses

Adjusted selling, general, and administrative expenses, as we define it, is a non-GAAP measure. Adjusted selling, general, and administrative expenses exclude the impact of deferred compensation plans funded through rabbi trusts and stock-based compensation expense. Adjusted selling, general, and administrative expenses assist us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis. See "—Results of Operations" for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.

Comparable hotels

"Comparable system-wide hotels" represents all properties we manage or franchise (including owned and leased properties) and that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Hotels that have temporarily suspended operations due to the COVID-19 pandemic are included in our definition of comparable system-wide hotels. We may use variations of comparable system-wide hotels to specifically refer to comparable system-wide Americas full service or select service hotels for those properties that we manage or franchise within the Americas management and franchising segment, comparable system-wide ASPAC full service or select service hotels for those properties we manage or franchise within the ASPAC management and franchising segment, or comparable system-wide ~~EAME~~ EAME/SW Asia full service or select service hotels for those properties that we manage or franchise within the EAME/SW Asia management and franchising segment. "Comparable owned and leased hotels" represents all properties we own or lease and that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Hotels that have temporarily suspended operations due to the COVID-19 pandemic are included in our definition of comparable owned and leased hotels. Comparable system-wide hotels and comparable owned and leased hotels are commonly used as a basis of measurement in our industry. "Non-comparable system-wide hotels" or "non-comparable owned and leased hotels" represent all hotels that do not meet the respective definition of "comparable" as defined above.

Constant dollar currency

We report the results of our operations both on an as-reported basis, as well as on a constant dollar basis. Constant dollar currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate constant dollar currency by restating prior-period local currency financial results at the current period's exchange rates. These restated amounts are then compared to our current period reported amounts to provide operationally driven variances in our results.

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The table below provides a reconciliation of our net ~~income (loss)~~loss attributable to Hyatt Hotels Corporation to EBITDA and a reconciliation of EBITDA to consolidated Adjusted EBITDA:


		Three Months Ended September 30,									Three Months Ended March 31,
		2020		2019		Change					2021		2020		Change
Net income (loss) attributable to Hyatt Hotels Corporation		$	(161)	$	296	$	(457)	(154.2)	%
Net loss attributable to Hyatt Hotels Corporation										Net loss attributable to Hyatt Hotels Corporation	$	(304)	$	(103)	$	(201)	(195.2)	%
Interest expense	Interest expense	35		19		16		88.7	%	Interest expense	41		17		24		132.6	%
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(59)		109		(168)		(153.8)	%	(Benefit) provision for income taxes	186		(35)		221		629.6	%
Depreciation and amortization	Depreciation and amortization	80		85		(5)		(6.4)	%	Depreciation and amortization	74		80		(6)		(7.4)	%
EBITDA	EBITDA	(105)		509		(614)		(120.6)	%	EBITDA	(3)		(41)		38		91.3	%
Contra revenue	Contra revenue	7		5		2		20.5	%	Contra revenue	8		6		2		24.6	%
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	(267)		(617)		350		56.8	%	Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	(260)		(533)		273		51.2	%
Costs incurred on behalf of managed and franchised properties	Costs incurred on behalf of managed and franchised properties	278		633		(355)		(56.1)	%	Costs incurred on behalf of managed and franchised properties	277		555		(278)		(50.1)	%
Equity losses from unconsolidated hospitality ventures		20		5		15		341.1	%
Equity (earnings) losses from unconsolidated hospitality ventures										Equity (earnings) losses from unconsolidated hospitality ventures	(54)		2		(56)		NM
Stock-based compensation expense	Stock-based compensation expense	3		4		(1)		(25.5)	%	Stock-based compensation expense	28		15		13		85.3	%
Gains on sales of real estate	Gains on sales of real estate	—		(373)		373		100.0	%	Gains on sales of real estate	—		(8)		8		100.0	%
Asset impairments	Asset impairments	—		9		(9)		(99.5)	%	Asset impairments	—		3		(3)		(100.0)	%
Other (income) loss, net	Other (income) loss, net	19		(25)		44		173.9	%	Other (income) loss, net	(12)		81		(93)		(114.8)	%
Pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA		(3)		13		(16)		(127.5)	%
Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA										Pro rata share of unconsolidated owned and leased hospitality ventures' Adjusted EBITDA	(4)		6		(10)		(164.2)	%
Adjusted EBITDA	Adjusted EBITDA	$	(48)	$	163	$	(211)	(129.9)	%	Adjusted EBITDA	$	(20)	$	86	$	(106)	(123.3)	%

Nine Months Ended September 30,
2020 2019 Change
Net income (loss) attributable to Hyatt Hotels Corporation $ (500) $ 445 $ (945) (212.3) %
Interest expense 87 58 29 49.9 %
(Benefit) provision for income taxes (188) 148 (336) (227.0) %
Depreciation and amortization 233 248 (15) (6.0) %
EBITDA (368) 899 (1,267) (140.9) %
Contra revenue 20 16 4 21.4 %
Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties (1,015) (1,826) 811 44.5 %
Costs incurred on behalf of managed and franchised properties 1,068 1,871 (803) (42.9) %
Equity losses from unconsolidated hospitality ventures 45 2 43 NM
Stock-based compensation expense 20 28 (8) (28.6) %
Gains on sales of real estate (8) (374) 366 97.9 %
Asset impairments 52 13 39 277.7 %
Other (income) loss, net 114 (104) 218 208.9 %
Pro rata share of unconsolidated owned and leased hospitality ventures Adjusted EBITDA (7) 38 (45) (119.5) %
Adjusted EBITDA $ (79) $ 563 $ (642) (114.1) %

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Liquidity and Capital Resources

Overview

We finance our business primarily with existing cash, short-term investments, and cash generated from our operations. As part of our long-term business strategy, we use net proceeds from dispositions to support our acquisitions and new investment opportunities as well as return capital to our shareholders when appropriate. If we deem necessary, we borrow cash under our revolving credit facility or from other third-party sources and may also raise funds by issuing debt or equity securities. We maintain a cash investment policy that emphasizes preservation of capital.

The COVID-19 pandemic and related travel restrictions and other containment efforts have had a significant impact on ~~the~~ travel ~~industry~~and lodging and hospitality industries and, as a result, on our business, results of operations, cash flows, and ~~cash flows.~~financial condition. Given the uncertainty and dynamic nature of the situation, we cannot currently estimate the ultimate financial impact of the COVID-19 pandemic and have therefore taken significant actions to manage operating expenses and cash flows consistent with business needs and demand levels. Those actions include the reduction of (i) capital expenditures; (ii) selling, general, and administrative expenses, including permanent reductions in staffing levels; (iii) a significant portion of owned and leased hotels expense; and (iv) costs incurred on behalf of our third-party owners. We also suspended our quarterly dividend and all share repurchases.

On ~~August 26, 2020, we issued and sold the 2022 Notes and on April 21, 2020,~~March 18, 2021, we entered into the Revolver ~~Amendment~~Amendment. See Part I, Item 1 "Financial Statements—Note 9 to the Condensed Consolidated Financial Statements" and ~~issued the 2025 Notes and the 2030 Notes. See~~ our Current ~~Reports~~Report on Form 8-K filed with the SEC on ~~September 1, 2020, April 21, 2020, and April 24, 2020, respectively,~~March 22, 2021, which is incorporated in this quarterly report by reference, for more information related to ~~our revolving credit facility amendment and notes offerings. Based on these actions, we~~the Revolver Amendment. We believe that our cash position, short-term investments, and cash from operations, together with borrowing capacity under our revolving credit facility and our access to the capital markets, will be adequate to meet all of our funding requirements and capital deployment objectives for the foreseeable future. Our cash burn decreased for the three months ended September 30, 2020, compared to the three months ended June 30, 2020, primarily due to improved cash flow from operations and lower levels of capital expenditures and investment spend. These results were partially offset by working capital support provided to third-party owners. We believe our existing liquidity, excluding proceeds from the 2022 Notes, is sufficient to fund our operations at third quarter 2020 demand levels for more than 36 months.

We may, from time to time, seek to retire or purchase ~~additional amounts of~~ our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan or an accelerated share repurchase transaction. Such repurchases or exchanges, if any, will depend on prevailing market conditions, restrictions in our existing or future

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financing arrangements, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

Recent Transactions Affecting our Liquidity and Capital Resources

During the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ various transactions impacted our liquidity. See "—Sources and Uses of Cash."

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Sources and Uses of Cash


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
Cash provided by (used in):	Cash provided by (used in):					Cash provided by (used in):
Operating activities	Operating activities	$	(463)	$	274	Operating activities	$	(91)	$	(100)
Investing activities	Investing activities	(318)		298		Investing activities	(31)		13
Financing activities	Financing activities	1,527		(380)		Financing activities	(14)		253
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	1		6		Effect of exchange rate changes on cash	5		3

Net increase in cash, cash equivalents, and restricted cash		$	747	$	198
Net increase (decrease) in cash, cash equivalents, and restricted cash						Net increase (decrease) in cash, cash equivalents, and restricted cash	$	(131)	$	169

Cash Flows from Operating Activities

Cash ~~provided by (used in)~~used in operating activities decreased ~~$737~~$9 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The decrease was primarily due to an increase in our working capital and a decrease in tax payments in 2021. This decrease was partially offset by a decline in performance ~~at hotels within our management and franchising and owned and leased hotels segments which~~across the portfolio as results were negatively impacted by the COVID-19 pandemic, ~~and the settlement of our outstanding interest rate locks for $61 million upon issuance of the 2030 Notes.~~which significantly affected operations beginning in March 2020.

Cash Flows from Investing Activities

During the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:

•We ~~invested $223~~purchased our partner's interest in the entities that own Grand Hyatt São Paulo for $6 million ~~in net purchases~~ of ~~marketable securities~~cash, and ~~short-term investments.~~we repaid the $78 million third-party mortgage loan on the property.

•We invested ~~$104~~$19 million in capital expenditures (see "—Capital Expenditures").

•We invested ~~$57~~$16 million in unconsolidated hospitality ventures.

•We received $100 million in net proceeds from marketable securities and short-term investments.

During the three months ended March 31, 2020:

•We received $72 million of proceeds related to the disposition of a ~~60%~~58% ownership interest in certain subsidiaries that ~~are developing a hotel,~~developed Hyatt Centric Center City Philadelphia and adjacent parking and retail ~~space in Philadelphia, Pennsylvania.~~space.

•We received $6 million of proceeds, net of closing costs and proration adjustments, from the sale of a commercial building in Omaha, Nebraska.

~~During the nine months ended September 30, 2019:~~

•~~We sold Hyatt Regency Atlanta to an unrelated third party for approximately $346 million, net of closing costs and proration adjustments.~~

•We sold the property adjacent to Grand Hyatt San Francisco and assigned the related Apple store lease to an unrelated third party for approximately $115 million, net of closing costs and proration adjustments. Proceeds from the sale were held as a restricted for use in a potential like-kind exchange.

•~~We received $59 million of net proceeds from the sale of marketable securities and short-term investments.~~

•~~We received $46 million of proceeds from an unsecured financing receivable~~

•~~We received $25 million of proceeds from the sales activity related to certain equity method investments.~~

•We invested ~~$244~~$55 million in capital expenditures (see "—Capital Expenditures").

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•~~We acquired land for $15 million from an unrelated third party.~~

Cash Flows from Financing Activities

•During the ~~nine~~three months ended ~~September 30, 2020:~~

•~~We issued~~March 31, 2021, we did not repurchase common stock. During the ~~2025 and the 2030 Notes and received approximately $890 million of net proceeds, after deducting $10 million of underwriting discounts and other offering expenses.~~

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•~~We issued the 2022 Notes and received approximately $745 million of net proceeds, after deducting $5 million of underwriting discounts and other offering expenses.~~

•Wethree months ended March 31, 2020, we repurchased 827,643 shares of Class A common stock for an aggregate purchase price of $69 million.

•WeDuring the three months ended March 31, 2021, we did not pay dividends. During the three months ended March 31, 2020, we paid a ~~first quarter~~quarterly $0.20 per share cash dividend on Class A and Class B common stock totaling $20 million.

•WeDuring the three months ended March 31, 2021, we did not draw on our revolving credit facility. During the three months ended March 31, 2020, we borrowed $400 million and repaid ~~$400 million on our revolving credit facility.~~

~~During the nine months ended September 30, 2019:~~

•~~We repurchased 3,829,427 shares of Class A and Class B common stock for an aggregate purchase price of $280 million.~~

•~~We paid three quarterly $0.19 per share cash dividends on Class A and Class B common stock totaling $60 million.~~

•~~We paid $24 million of contingent consideration as a result of the acquisition of Two Roads.~~

•~~We borrowed and repaid $180~~$50 million on our revolving credit facility.

We define net debt as total debt less the total of cash and cash equivalents and short-term investments. We consider net debt and its components to be an important indicator of liquidity and a guiding measure of capital structure strategy. Net debt is a non-GAAP measure and may not be computed the same as similarly titled measures used by other companies. The following table provides a summary of our debt to capital ratios:


		September 30, 2020			December 31, 2019				March 31, 2021			December 31, 2020
Consolidated debt (1)	Consolidated debt (1)	$	3,241		$	1,623		Consolidated debt (1)	$	3,242		$	3,244
Stockholders' equity	Stockholders' equity	3,350			3,962			Stockholders' equity	2,885			3,211
Total capital	Total capital	6,591			5,585			Total capital	6,127			6,455
Total debt to total capital	Total debt to total capital	49.2		%	29.1		%	Total debt to total capital	52.9		%	50.3		%
Consolidated debt (1)	Consolidated debt (1)	3,241			1,623			Consolidated debt (1)	3,242			3,244
Less: cash and cash equivalents and short-term investments	Less: cash and cash equivalents and short-term investments	(2,088)			(961)			Less: cash and cash equivalents and short-term investments	(1,628)			(1,882)
Net consolidated debt	Net consolidated debt	$	1,153		$	662		Net consolidated debt	$	1,614		$	1,362
Net debt to total capital	Net debt to total capital	17.5		%	11.9		%	Net debt to total capital	26.3		%	21.1		%

(1) Excludes approximately ~~$654~~$643 million and ~~$572~~$671 million of our share of unconsolidated hospitality venture indebtedness at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, substantially all of which is non-recourse to us and a portion of which we guarantee pursuant to separate agreements.

Capital Expenditures

We routinely make capital expenditures to enhance our business. We classify our capital expenditures into maintenance and technology, enhancements to existing properties, and investment in new properties under development or recently opened. We have been, and will continue to be, ~~prudent~~disciplined with respect to our capital spending, taking into account our cash flow from operations.


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
Maintenance and technology						Maintenance and technology	$	10	$	13
Enhancements to existing properties	Enhancements to existing properties	$	52	$	90	Enhancements to existing properties	9		27
Investment in new properties under development or recently opened	Investment in new properties under development or recently opened	33		100		Investment in new properties under development or recently opened	—		15
Maintenance and technology		19		54
Total capital expenditures	Total capital expenditures	$	104	$	244	Total capital expenditures	$	19	$	55

In response to the COVID-19 pandemic and its impact to our business, we have taken actions to reduce capital expenditures. We expect to maintain conservative levels of capital expenditures ~~in 2020.~~during 2021 due to a continuation of demand pressure resulting from the COVID-19 pandemic. The decrease in enhancements to existing properties is driven by a decrease in discretionary hotel ~~renovations, including Grand Hyatt Seoul which was sold during the year ended December 31, 2019.~~renovations. The decrease in investment in new properties under development or recently opened is primarily driven by a decrease in renovation spend at ~~two~~a Miraval ~~properties~~property and the development of ~~a hotel~~Hyatt Centric Center City Philadelphia and adjacent parking and retail space in ~~Philadelphia in 2019 that~~2020.

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~~converted to an equity method investment in 2020. The decrease in maintenance and technology expenditures is driven by decreased technology spending.~~

Senior Notes

The table below sets forth the outstanding principal balance of our Senior Notes at ~~September 30, 2020,~~March 31, 2021, as described in Part I, Item 1 "Financial Statements—Note 109 to the Condensed Consolidated Financial Statements." Interest on the Senior Notes is payable semi-annually or quarterly.


	Principal amount
2021 Notes	$	250
2022 Notes	750
2023 Notes	350
2025 Notes	450
2026 Notes	400
2028 Notes	400
2030 Notes	450
Total Senior Notes	$	3,050

We are in compliance with all applicable covenants under the indenture governing our Senior Notes at ~~September 30, 2020.~~

On August 26, 2020, we issued the 2022 Notes. See Part I, Item 1 "Financial Statements—Note 10 to the Condensed Consolidated Financial Statements" and our Current Report on Form 8-K filed with the SEC on September 1, 2020 for more information related to our Senior Notes.

On April 21, 2020, we issued the 2025 Notes and the 2030 Notes. See Part I, Item 1 "Financial Statements—Note 10 to the Condensed Consolidated Financial Statements" and our Current Reports on Form 8-K filed with the SEC on April 21, 2020 and April 24, 2020, respectively, for more information related to our Senior Notes.March 31, 2021.

Revolving Credit Facility

The revolving credit facility is intended to provide financing for working capital and general corporate purposes, including permitted investments and acquisitions. At ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019,~~2020, we had no balance outstanding. See Part I, Item 1 "Financial Statements—Note 109 to the Condensed Consolidated Financial Statements."

We are in compliance with all applicable covenants under the revolving credit facility at ~~September 30, 2020.~~March 31, 2021.

On ~~April 21, 2020,~~March 18, 2021, we entered into the Revolver Amendment. See Part I, Item 1 "Financial Statements—Note 109 to the Condensed Consolidated Financial Statements" and our Current Report on Form 8-K filed with the SEC on ~~April 21, 2020~~March 22 , 202 1, which is incorporated in this quarterly report by reference, for more information related to the Revolver Amendment.

Letters of Credit

We issue letters of credit either under the revolving credit facility or directly with financial institutions. We had ~~$263~~$237 million and $234 million in letters of credit issued directly with financial institutions outstanding ~~both~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019. These~~2020, respectively. At March 31, 2021, these letters of credit had weighted-average fees of approximately ~~144~~141 basis points and ~~a range~~maturity dates of ~~maturity of up to approximately two years at September 30, 2020.~~less than one year.

Critical Accounting Policies and Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have disclosed those estimates that we believe are critical and require the use of complex judgment in their application in our ~~2019~~2020 Form 10-K, with additional considerations below.

Income Taxes

Judgment is required in assessing the future tax consequences of events that have been recognized in our condensed consolidated financial statements or tax returns (e.g., realization of deferred tax assets, changes in tax laws, or interpretations thereof). In addition, we are subject to examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our condensed consolidated financial statements.

We evaluate tax positions taken or expected to be taken on a tax return to determine whether they are "more likely than not" of being sustained assuming that the tax reporting positions will be examined by taxing authorities with full knowledge of all relevant information prior to recording the related tax benefit in our condensed consolidated financial statements. If a position does not meet the "more likely than not" standard, the benefit cannot be recognized. Assumptions, judgment, and the use of estimates are required in determining if the "more likely than

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~~Loyalty Program Future Redemption Obligation~~not" standard has been met when developing the provision for income taxes. A change in the assessment of the "more likely than not" standard with respect to a position could materially impact our condensed consolidated financial statements. See Part I, Item 1, "Financial Statements—Note 11 to our Condensed Consolidated Financial Statements."

Deferred Income Taxes – Valuation Allowance

On a quarterly basis, we assess the realizability of our deferred tax assets and recognize a valuation allowance when it is "more likely than not" that some or all of our deferred tax assets are not realizable. This assessment is completed by tax jurisdiction and relies on the weight of both positive and negative evidence available with significant weight placed on recent financial results. Cumulative pre-tax losses for the three-year period are considered significant objective negative evidence that some or all of our deferred tax assets may not be realizable. Cumulative reported pre-tax income is considered objectively verifiable positive evidence of our ability to generate positive pre-tax income in the future. In accordance with GAAP, when there is a recent history of pre-tax losses, there is little or no weight placed on forecasts for purposes of assessing the recoverability of our deferred tax assets. When necessary, we use systematic and logical methods to estimate when deferred tax liabilities will reverse and generate taxable income and when deferred tax assets will reverse and generate tax deductions. Assumptions, judgment, and the use of estimates are required when scheduling the reversal of deferred tax assets and liabilities, and the exercise is inherently complex and subjective.

We ~~utilize an actuary~~generated significant pre-tax losses in 2020 and the first quarter of 2021 due to ~~assist with the valuation of the deferred revenue liability related to the loyalty program. As a result of~~ the impact of the COVID-19 pandemic, and during the three months ended March 31, 2021, we ~~revised~~entered into a three-year U.S. cumulative loss position. We expect the cumulative three-year loss position may continue in 2021 as 2018 pre-tax income is replaced by 2021 results. As a result of our ~~estimate~~three-year U.S. cumulative loss and the scheduling estimates discussed above, we recognized a $193 million valuation allowance during the three months ended March 31, 2021. If we continue to generate losses in future periods, additional valuation allowances may be required that could have an adverse impact on our net income (loss). When pre-tax income returns to normalized levels, we will consider the pre-tax income as positive evidence weighted within our analysis to evaluate the realizability of our U.S. deferred tax asset balances and determine whether a portion of the ~~anticipated~~valuation allowance can be reversed. However, significant judgment will be required to determine the timing and amount of our future point redemptions over the next 12 months, which resulted in a $118 million reclassification of our deferred revenue liability related to the loyalty program from current at December 31, 2019 to long-term at September 30, 2020.

~~Goodwill and Indefinite-Lived Intangible Assets~~

Historically, changes in estimates used in our goodwill and indefinite-lived intangible asset valuations have not resulted in material impairment charges in subsequent periods. However, the extent, duration, and magnitudeany reversal of the ~~COVID-19 pandemic will depend on factors such as the impact of the pandemic on global and regional economies, travel, and economic activity, a~~s well as actions taken by governments, businesses, and individuals in response to the pandemic or any resurgence. Future impacts of the COVID-19 pandemic are highly uncertain and difficult to predict, but they may change the estimates and assumptions used in our valuations, which could resultvaluation allowance in future impairment charges. At September 30, 2020, a 10% decline in the underlying cash flows or a 1% increase in the discount rates or terminal capitalization rates would not result in an impairment of goodwill. However, the loss of management agreement contracts, changes inperiods. See Part I, Item 1, "Financial Statements—Note 11 to our intent with respect to certain assets, and/or changes in our estimates and assumptions used in our valuations could result in future impairment charges of up to $20 million for certain indefinite-lived intangible assets.

~~Property and Equipment and Operating Lease Right-of-Use Assets~~

We assess property and equipment and operating lease right-of-use assets for impairment quarterly, and when events or circumstances indicate the carrying value may not be recoverable, we evaluate the net book value of the assets by comparing to the projected undiscounted cash flows of the asset. At September 30, 2020, all of our property and equipment and operating lease right-of-use assets were recoverable. However, as noted above, the impacts of the COVID-19 pandemic are highly uncertain and difficult to predict, and they may change the estimates and assumptions used in our cash flow projections, which could result in future impairment charges.

Condensed Consolidated Financial Statements."

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk primarily from changes in interest rates and foreign currency exchange rates. In certain situations, we seek to reduce earnings and cash flow volatility associated with changes in interest rates and foreign currency exchange rates by entering into financial arrangements to provide a hedge against a portion of the risks associated with such volatility. We continue to have exposure to such risks to the extent they are not hedged. We enter into derivative financial arrangements to the extent they meet the objectives described above, and we do not use derivatives for trading or speculative purposes. At ~~September 30, 2020,~~March 31, 2021, we were a party to hedging transactions, including the use of derivative financial instruments, as discussed below.

Interest Rate Risk

In the normal course of business, we are exposed to the impact of interest rate changes due to our borrowing activities. Our objective is to manage the risk of interest rate changes on the results of operations, cash flows, and the market value of our debt by creating an appropriate balance between our fixed and floating-rate debt. We enter into interest rate derivative transactions from time to time, including interest rate swaps and interest rate locks, in order to maintain a level of exposure to interest rate variability that we deem acceptable.

On April 21, 2020, we settled our outstanding interest rate locks upon issuance of the 2030 Notes. See Part I, Item 1 "Financial Statements—Note 10 to the Condensed Consolidated Financial Statements" and had no outstanding interest rate locks at September 30, 2020. At ~~September 30, 2020~~both March 31, 2021 and December 31, ~~2019,~~2020, we did not hold any interest rate swap ~~contracts.~~contracts or have outstanding interest rate locks.

The following table sets forth the contractual maturities and the total fair values at ~~September 30, 2020~~March 31, 2021 for our financial instruments materially affected by interest rate risk:


		Maturities by Period																		Maturities by Period
		2020		2021		2022		2023		2024		Thereafter		Total carrying amount (1)			Total fair value			2021		2022		2023		2024		2025		Thereafter		Total carrying amount (1)			Total fair value
Fixed-rate debt	Fixed-rate debt	$	—	$	255	$	5	$	355	$	6	$	1,852	$	2,473		$	2,641	Fixed-rate debt	$	255	$	5	$	355	$	6	$	456	$	1,397	$	2,474		$	2,703
Average interest rate (2)	Average interest rate (2)													4.89		%			Average interest rate (2)													4.89		%
Floating-rate debt (3)	Floating-rate debt (3)	$	1	$	4	$	754	$	3	$	3	$	21	$	786		$	794	Floating-rate debt (3)	$	3	$	754	$	3	$	3	$	3	$	17	$	783		$	796
Average interest rate (2)	Average interest rate (2)													3.41		%			Average interest rate (2)													3.33		%

(1) Excludes $9 million of finance lease obligations and ~~$27~~$24 million of unamortized discounts and deferred financing fees.

(2) Average interest rate at ~~September 30, 2020.~~March 31, 2021.

(3) Includes Grand Hyatt Rio de Janeiro construction loan which had a ~~6.92%~~6.38% interest rate at ~~September 30, 2020.~~March 31, 2021.

Foreign Currency Exposures and Exchange Rate Instruments

We transact business in various foreign currencies and utilize foreign currency forward contracts to offset our exposure associated with the fluctuations of certain foreign currencies. The U.S. dollar equivalents of the notional ~~amounts~~amount of the outstanding forward contracts, the majority of which relate to intercompany transactions, with terms of less than one year, were $184 million and $172 million ~~and $194 million~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

We intend to offset the gains and losses related to our third-party debt and intercompany transactions with gains or losses on our foreign currency forward contracts such that there is a negligible effect on our annual net income (loss). Our exposure to market risk has not materially changed from what we previously disclosed in our ~~2019~~2020 Form 10-K.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and March 31, 2020, the effects of these derivative instruments resulted in a$3 million of net ~~loss~~losses and $8 million of ~~$7 million and $0,~~net gains, respectively, recognized in other income (loss), net on our condensed consolidated statements of income (loss). For the three and nine months ended September 30, 2019, the effects of these derivative instruments resulted in net gains of $9 million and $14 million, respectively, recognized in other income (loss), net of our condensed consolidated statements of income (loss). We offset the gains and losses on our foreign currency forward contracts with gains and losses related to our intercompany loans and transactions, such that there is a negligible effect to our net income (loss). At March 31, 2021 and December 31, 2020, we had $0 and $10 million of liabilities, respectively, related to these derivative instruments recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

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Item 4. Controls and Procedures.

Disclosure Controls and Procedures. We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures, as of the end of the period covered by this quarterly report, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting.

There has been no change in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved in various claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, workers' compensation and other employee claims, intellectual property claims, and claims related to our management of certain hotel properties. Most occurrences involving liability, claims of negligence, and employees are covered by insurance, in each case, with solvent insurance carriers. We recognize a liability when we believe the loss is probable and reasonably estimable. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material effect on our consolidated financial position, results of operations, or liquidity.

In March 2018, a putative class action was filed against the Company and several other hotel companies in federal district court in Illinois, Case No. 1:18-cv-01959, seeking an unspecified amount of damages and equitable relief for an alleged violation of the federal antitrust laws. In December 2018, a second lawsuit was filed against the Company by TravelPass Group, LLC, Partner Fusion, Inc., and Reservation Counter, LLC in federal district court in Texas, Case No. 5:18-cv-00153, for an alleged violation of federal antitrust laws arising from similar conduct alleged in the Illinois case and seeking an unspecified amount of monetary damages. As part of the Texas federal court case, the Company filed counterclaims against the plaintiffs for unfair competition and trademark infringement. In October 2020, the Company resolved the claims and counterclaims in the Texas lawsuit without either party admitting liability. The Company disputes the allegations ~~in the remaining Illinois federal district court lawsuit~~ and will defend its interests vigorously. We currently do not believe the ultimate outcome of this litigation will have a material effect on our consolidated financial position, results of operation, or liquidity.

Item 1A. Risk Factors.

~~We are supplementing~~At March 31, 2021, there have been no material changes from the risk factors ~~described under the section titled "Risk Factors"~~previously disclosed in

response to Item 1A to Part I ~~Item 1A in~~of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019 and~~ ~~Item 1A to Part II of~~ ~~our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 with the following risk factor.~~

The global COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the travel industry generally and, as a result, on our business and results of operations, and these impacts may persist for an extended period of time or become more pronounced over time.

The global spread and unprecedented impact of the COVID-19 pandemic is complex, unpredictable, and continuously evolving and has resulted in significant disruption and additional risks to our business, the lodging, hospitality, and travel industries, and the global economy. The COVID-19 pandemic has led governments and other authorities around the world to impose measures intended to control its spread, including restrictions on freedom of movement, gatherings of large numbers of people, and business operations such as travel bans, border closings, business closures, quarantines, shelter-in-place orders, and social distancing measures. As a result, the COVID-19 pandemic and its consequences have significantly reduced global travel and demand for hotel rooms and have had a material detrimental impact on global commercial activity across the lodging, hospitality, and travel industries, all of which has had, and is expected to continue to have, a material adverse impact on our business, operations, and financial results.

The extent, duration, and magnitude of the COVID-19 pandemic's effects will depend on future developments, 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, as well as actions taken by governments, businesses, and individuals in response to the pandemic or any resurgence. These developments include the impact of the COVID-19 pandemic on unemployment rates and consumer discretionary spending; the demand for travel and transient and group business; levels of consumer confidence; the ability of our third-party owners, franchisees, or hospitality venture partners to successfully navigate such impacts; and ~~the pace of recovery when the pandemic subsides or effective treatments or vaccines become available~~.

~~The COVID-19 pandemic has subjected our business, operations, and financial condition to a number of significant risks:~~

•~~Revenues and Expenses~~: With the global spread of COVID-19 beginning in March 2020, we began to experience significant decreases in demand and system-wide RevPAR beyond our Greater China properties where the negative impacts first originated. The effects of the pandemic have materially adversely affected, and we expect will continue to materially adversely affect to an extent we are unable to

~~Table of Contents~~

predict, the revenues and profitability of our owned and leased properties, and revenues may be insufficient to offset certain fixed costs, such as insurance and property taxes. In addition, uncertain or fluctuating real estate valuations and the inability for third-party purchasers to obtain capital may prevent us from selling properties on acceptable terms or prevent us from selling properties within our previously announced timeframes.

In addition, the amount of management and franchise fee revenues we are able to generate from our managed and franchised properties has been materially adversely affected, and we expect will continue to be materially adversely affected by the COVID-19 pandemic. The economic impact of the pandemic has also made it difficult for certain third-party owners or franchisees to meet working capital needs, and could make it difficult for them to service debt obligations or obtain financing on favorable terms, or at all, which could have a significant impact on the overall level, cost, and pace of our future development and, therefore, our ability to increase revenue. The impact of the pandemic could cause third-party owners or franchisees to declare bankruptcy or cause their lenders to declare a default, accelerate the related debt or foreclose on the property. Such bankruptcies, sales or foreclosures could, in some cases, result in the termination of our management or franchise agreements and impact our anticipated income and cash flows. Additionally, third-party owners or franchisees may be, and in limited cases, have been, unable or unwilling to pay us amounts that we are entitled to receive on a timely basis or at all, which has adversely affected, and may continue to adversely affect, our revenues and liquidity.

The COVID-19 pandemic has caused us, and could continue to cause us, to incur additional expenses. For example, as a result of the pandemic and resulting deterioration in hotel operating performance, we may be, and in limited cases, have been, required to fund shortfalls in operating profit under performance tests or guarantees we have entered into in favor of some third-party owners. Moreover, our third-party owners and franchisees could fail to reimburse us for any payments we may be required to make to third-party lenders to whom we made financial guarantees for the timely repayment of all or a portion of the third-party owners' or franchisees' debt related to hotels that we manage or franchise. We have, in limited cases, found it necessary or in the interest of our business to provide financial or other types of support to certain of these parties, and may continue to do so in the future, which could increase our expenses and affect cash flows. While governments have and may continue to implement various stimulus and relief programs, it is uncertain whether and to what extent we or our third-party owners or franchisees will be eligible to participate in such programs, whether conditions or restrictions imposed under such programs will be acceptable, and whether such programs will be effective in avoiding or significantly mitigating the financial impacts of the COVID-19 pandemic. Further, we have incurred additional costs related to severance payments and may incur additional expenses related to restructuring activities in future periods. Even after the COVID-19 pandemic subsides, we or our hotel owners and franchisees could experience other short or longer-term impacts on our costs, including, for example, the need for enhanced health and hygiene standards or certifications, social distancing requirements or other precautionary measures in response to the health and safety challenges presented by the COVID-19 pandemic. These effects could impact our ability to generate profits even after revenues improve.

•~~Operations~~: In response to the significant decline in demand for hotels across our system, we have taken actions and continue to evaluate spending to manage operating expenses and optimize our financial resources. These actions include an approximate 35% permanent reduction in our employee workforce across our regions, eliminating non-essential spending and corporate initiatives, and reducing costs related to certain system-wide expenses we incur on behalf of third-party owners related to marketing, sales, reservations, and technology. We have received, and may continue to receive, demands or requests from labor unions that represent our colleagues, whether in the course of our periodic renegotiation of our collective bargaining agreements or otherwise, for additional compensation, healthcare benefits, or other terms that could increase costs, and we could experience labor disputes or disruptions as we continue to implement our mitigation plans. Some actions we have taken, or that we may take in the future, to reduce costs for us or our third-party owners or franchisees may negatively impact guest loyalty, owner preference, or our ability to attract and retain colleagues, and our reputation and market share may suffer as a result. Loss of our personnel may cause us to experience operational challenges that impact guest loyalty, owner preference, and our market share, which could limit our ability to maintain or expand our business and could reduce our profits. Further, once the effects of the pandemic subside, we expect the recovery period could be extended and that certain operational changes, particularly with respect to enhanced health and safety measures, will be necessary over the long-term and will increase our ongoing costs. The challenges of the current operating environment may also adversely impact our ability to maintain brand standards across our portfolio as third-party owners or franchisees may be unwilling or unable to incur the cost of complying with such standards.

~~Table of Contents~~

•~~Financial Condition and Indebtedness:~~ As we manage through the effects of the pandemic, our level of indebtedness has increased and may continue to increase. To enhance our liquidity profile and cash position in response to the COVID-19 pandemic, on April 21, 2020, we entered into the Revolver Amendment and issued the 2025 Notes and the 2030 Notes and on August 26, 2020, we issued the 2022 Notes. A default under our revolving credit facility would enable the lenders to terminate their commitments thereunder and could trigger a cross-default, acceleration, or other consequences under our other indebtedness or financial instruments. There is no guarantee that debt financings will be available in the future to fund our obligations or will be available on terms consistent with our expectations. We also expect the impact of the COVID-19 pandemic on the financial markets could adversely affect our ability to raise equity financing. Changes in the credit ratings of our debt, including our revolving credit facility and the notes, could have an adverse impact on our interest expense. As a result of the general economic uncertainty and the impact of the COVID-19 pandemic, our credit ratings have been downgraded. If our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our credit rating levels, our industry, or our company, our access to capital and the cost of debt financing would be negatively impacted.

•~~Growth:~~ The COVID-19 pandemic has impacted, and could continue to impact, the pace and timing of our growth. The current environment has resulted in, and could continue to result in, difficulties for certain hotel owners and franchisees to obtain commercially viable financing. The commitments of owners and developers with whom we have agreements are subject to numerous conditions, and the eventual development and completion of construction of our pipeline properties is subject to numerous risks, including, in certain cases, obtaining adequate financing. In addition, we are experiencing construction and opening delays as a result of business activity restrictions and supply chain interruptions. As a result, some portion, or all, of our current development pipeline may not be completed and developed into new hotels and those hotels may not open when anticipated or at all, which would impact our net rooms growth. Further, our development pipeline may not grow at the same rate as in the past, and properties in our existing system-wide inventory may exit as a result of the COVID-19 pandemic, which would also negatively impact our net rooms growth. In addition, if we cannot access the capital we need to fund our operations or implement our growth strategy, we may need to postpone or cancel planned renovations or developments, which could impair our ability to compete effectively and harm our business.

•~~Capital Markets Impact:~~ The global stock markets have experienced, and may continue to experience, significant volatility as a result of the COVID-19 pandemic, and the price of our common stock has been volatile and has decreased significantly since the onset of the pandemic. The COVID-19 pandemic and the significant uncertainties it has caused for the global economy, business activity, and business confidence have had, and are likely to continue to have, a significant effect on the market price of securities generally, including our securities. In addition, certain debt covenants restrict our ability to make dividend payments to shareholders or engage in share repurchase activity.

The impact of the COVID-19 pandemic is continuously evolving, and the continuation or a resurgence of the pandemic could precipitate or aggravate the other risk factors that we identified in our 2019 Form 10-K, which in turn could further materially adversely affect our business, financial condition, liquidity, results of operations, and profitability, including in ways that are not currently known to us or that we do not currently consider to present significant risks.

2020.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

The following table sets forth information regarding our purchases of shares of Class A common stock during the quarter ended ~~September 30, 2020:~~March 31, 2021:


	Total number of shares purchased (1)	Weighted-average price paid per share		Total number of shares purchased as part of publicly announced plans		Maximum number (or approximate dollar value) of shares that may yet be purchased under the program
~~July~~January 1 to ~~July~~January 31, ~~2020~~2021	—	$	—	—		$	927,760,966
~~August~~February 1 to ~~August 31, 2020~~February 28, 2021	—	$	—		—		$	927,760,966
~~September~~March 1 to ~~September 30, 2020~~March 31, 2021	—	$	—		—		$	927,760,966
Total	—	$	—	—

(1)On each of October 30, 2018 and December 18, 2019, we announced the approvals of the expansions of our share repurchase program. Under each approval, we are authorized to purchase up to an additional $750 million of Class A and Class B common stock in the open market, in privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan or an accelerated share repurchase transaction. The repurchase program does not have an expiration date. At ~~September 30, 2020,~~March 31, 2021, we had approximately $928 million remaining under the share repurchase authorization. We suspended all share repurchase activity effective March 3, 2020, ~~through~~and the terms of the Revolver Amendment restrict our ability to repurchase shares until the first quarter of ~~2021.~~2022.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

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Item 5. Other Information.

~~None.~~On May 4, 2021, we filed a Certificate of Retirement with the Secretary of State of the State of Delaware to retire 1,415,000 shares of Class B common stock, $0.01 par value per share, of the Company. Of the 1,415,000 shares of Class B common stock, 500,000 shares were converted into shares of Class A common stock, $0.01 par value per share, of the Company, in connection with a conversion by stockholder, and 915,000 shares were converted into shares of Class A common stock in connection with sales by certain selling stockholders into the public market pursuant to Rule 144 under the Securities Act of 1933, as amended. The Company's Amended and Restated Certificate of Incorporation requires that any shares of Class B common stock that are converted into shares of Class A common stock be retired and may not be reissued.

Effective upon filing, the Certificate of Retirement amended the Amended and Restated Certificate of Incorporation of the Company to reduce the total authorized number of shares of capital stock of the Company by 1,415,000 shares. The total number of authorized shares of the Company is now 1,402,618,330, such shares consisting of 1,000,000,000 shares designated Class A common stock, 392,618,330 shares designated Class B common stock, and 10,000,000 shares designated Preferred Stock, par value $0.01 per share. A copy of the Certificate of Retirement is attached as Exhibit 3.1 hereto.

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Item 6. Exhibits.


Exhibit Number			Exhibit Description

3.1			Amended and Restated Certificate of Incorporation of Hyatt Hotels Corporation

3.2			Amended and Restated Bylaws of Hyatt Hotels Corporation (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on September 11, 2014)










~~4.1~~10.1			~~Ninth Supplemental Indenture,~~Third Amendment to Second Amended and Restated Credit Agreement, dated ~~September 1, 2020, between~~as of March 18, 2021, among Hyatt Hotels Corporation and Hotel Investors I, Inc., as Borrowers, certain subsidiaries of Hyatt Hotels Corporation, as Guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as ~~trustee~~Administrative Agent (incorporated by reference to Exhibit ~~4.1~~10.1 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on ~~September 1, 2020)~~March 22, 2021)

~~4.2~~+10.2			Form of ~~Floating Rate Senior Note due 2022 (included in Exhibit 4.1 above)~~2021-2023 Performance Share Unit Agreement under the Fourth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan (incorporated by reference to Exhibit ~~4.2~~10.1 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on ~~September 1, 2020)~~March 25, 2021)

+10.3			Form of 2021 Performance Share Unit Agreement under the Fourth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (File No. 001-34521) filed with the Securities and Exchange Commission on March 25, 2021)





31.1			Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			XBRL Taxonomy Extension Schema Document

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			XBRL Taxonomy Extension Label Linkbase Document

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Hyatt Hotels Corporation

Date:	~~November~~May 5, ~~2020~~2021	By:	/s/ Mark S. Hoplamazian
			Mark S. Hoplamazian
			President and Chief Executive Officer
			(Principal Executive Officer)


		Hyatt Hotels Corporation

Date:	~~November~~May 5, ~~2020~~2021	By:	/s/ Joan Bottarini
			Joan Bottarini
			Executive Vice President, Chief Financial Officer
			(Principal Financial Officer)

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	Three Months Ended September 30, 2019
	Owned and leased hotels (a)		Americas management and franchising (a)		ASPAC management and franchising		EAME/SW Asia management and franchising		Corporate and other (a)		Eliminations (a)		Total
Rooms revenues	$	263	$	0	$	0	$	0	$	0	$	(11)	$	252
Food and beverage	134		0		0		0		0		0		134
Other	44		0		0		0		0		0		44
Owned and leased hotels	441		0		0		0		0		(11)		430

Base management fees	0		56		11		10		0		(13)		64
Incentive management fees	0		13		17		9		0		(6)		33
Franchise fees	0		36		1		0		0		0		37
Other fees	0		2		3		2		1		0		8
License fees	0		1		0		0		5		0		6

Management, franchise, and other fees	0		108		32		21		6		(19)		148
Amortization of management and franchise agreement assets constituting payments to customers	0		(4)		0		(1)		0		0		(5)
Net management, franchise, and other fees	0		104		32		20		6		(19)		143

Other revenues	0		16		0		0		9		0		25

Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		565		30		20		2		0		617

Total	$	441	$	685	$	62	$	40	$	17	$	(30)	$	1,215
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).


	Nine Months Ended September 30, 2019
	Owned and leased hotels (a)		Americas management and franchising (a)		ASPAC management and franchising		EAME/SW Asia management and franchising		Corporate and other (a)		Eliminations (a)		Total
Rooms revenues	$	821	$	0	$	0	$	0	$	0	$	(27)	$	794
Food and beverage	461		0		0		0		0		0		461
Other	135		0		0		0		0		0		135

Owned and leased hotels	1,417		0		0		0		0		(27)		1,390

Base management fees	0		175		33		27		0		(40)		195
Incentive management fees	0		46		51		26		0		(17)		106
Franchise fees	0		104		3		0		0		0		107
Other fees	0		3		9		5		4		0		21
License fees	0		3		0		0		15		0		18

Management, franchise, and other fees	0		331		96		58		19		(57)		447
Amortization of management and franchise agreement assets constituting payments to customers	0		(11)		(1)		(4)		0		0		(16)
Net management, franchise, and other fees	0		320		95		54		19		(57)		431

Other revenues	0		71		0		0		26		1		98

Revenues for the reimbursement of costs incurred on behalf of managed and franchised properties	0		1,688		80		54		4		0		1,826

Total	$	1,417	$	2,079	$	175	$	108	$	49	$	(83)	$	3,745
(a) Amounts presented have been adjusted for changes within the segments effective on January 1, 2020 (see Note 17).


	September 30, 2020		December 31, 2019
Loyalty program (Note 9)	$	556	$	483
Deferred compensation plans held in rabbi trusts (Note 9 and Note 11)	464		450
Captive insurance companies (Note 9)	158		180
Total marketable securities held to fund operating programs	1,178		1,113
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents, short-term investments, and prepaids and other assets	(182)		(219)
Marketable securities held to fund operating programs included in other assets	$	996	$	894


	September 30, 2020		December 31, 2019
Interest-bearing money market funds (a)	$	763	$	147
Time deposits (a)	288		37
Common shares of Playa N.V. (Note 9)	51		102

Total marketable securities held for investment purposes	1,102		286
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments	(1,051)		(184)
Marketable securities held for investment purposes included in other assets	$	51	$	102
(a) A portion of proceeds from our senior notes issuances during the nine months ended September 30, 2020 were reinvested in interest-bearing money market funds and time deposits at September 30, 2020 (see Note 10).


	Four managed hotels in France (1)				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	0		0		0		1		0		1
Amortization of initial guarantee obligation liability into income	(4)		(8)		(2)		(1)		(6)		(9)
Performance guarantee expense, net	26		24		13		0		39		24
Net payments during the period	(15)		(36)		(11)		(4)		(26)		(40)
Foreign currency exchange, net	(1)		0		0		0		(1)		0
Ending balance, June 30	26		16		13		7		39		23

Amortization of initial guarantee obligation liability into income	0		(4)		(1)		(1)		(1)		(5)
Performance guarantee expense (recovery), net	0		(1)		8		2		8		1
Net payments during the period	(7)		(3)		(7)		(2)		(14)		(5)
Foreign currency exchange, net	1		(1)		0		0		1		(1)
Ending balance, September 30	$	20	$	7	$	13	$	6	$	33	$	13


	Balance at July 1, 2020		Current period other comprehensive income (loss) before reclassification		Amount reclassified from accumulated other comprehensive loss (a)		Balance at September 30, 2020
Foreign currency translation adjustments	$	(215)	$	15	$	0	$	(200)
Unrecognized gains on AFS debt securities	1		0		0		1
Unrecognized pension cost	(9)		0		0		(9)
Unrealized losses on derivative instruments	(44)		0		2		(42)
Accumulated other comprehensive loss	$	(267)	$	15	$	2	$	(250)
(a) The amount reclassified from accumulated other comprehensive loss includes realized losses recognized in interest expense, net of insignificant tax impacts, related to the settlement of interest rate locks (see Note 10).

	Balance at January 1, 2020		Current period other comprehensive income (loss) before reclassification		Amount reclassified from accumulated other comprehensive loss (b)		Balance at September 30, 2020
Foreign currency translation adjustments	$	(183)	$	(17)	$	0	$	(200)
Unrecognized gains on AFS debt securities	1		0		0		1
Unrecognized pension cost	(9)		0		0		(9)
Unrealized losses on derivative instruments	(18)		(27)		3		(42)
Accumulated other comprehensive loss	$	(209)	$	(44)	$	3	$	(250)
(b) The amount reclassified from accumulated other comprehensive loss includes realized losses recognized in interest expense, net of insignificant tax impacts, related to the settlement of interest rate locks (see Note 10). We expect to reclassify $6 million of losses over the next 12 months.

	Balance at July 1, 2019		Current period other comprehensive income (loss) before reclassification		Amount reclassified from accumulated other comprehensive loss		Balance at September 30, 2019
Foreign currency translation adjustments	$	(191)	$	(27)	$	0	$	(218)

Unrecognized pension cost	(5)		0		0		(5)
Unrealized losses on derivative instruments	(16)		(9)		0		(25)
Accumulated other comprehensive loss	$	(212)	$	(36)	$	0	$	(248)


	Balance at January 1, 2019		Current period other comprehensive income (loss) before reclassification		Amount reclassified from accumulated other comprehensive loss		Balance at September 30, 2019
Foreign currency translation adjustments	$	(191)	$	(27)	$	0	$	(218)
Unrecognized pension cost	(5)		0		0		(5)
Unrealized losses on derivative instruments	(4)		(21)		0		(25)
Accumulated other comprehensive loss	$	(200)	$	(48)	$	0	$	(248)