HYATT HOTELS CORP, 10-Q filed on 8/1/2012
Quarterly Report
Document And Entity Information
6 Months Ended
Jun. 30, 2012
Jul. 27, 2012
Common Class A
Jul. 27, 2012
Common Class B
Entity Registrant Name
Hyatt Hotels Corp 
 
 
Entity Central Index Key
0001468174 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Jun. 30, 2012 
 
 
Document Fiscal Year Focus
2012 
 
 
Document Fiscal Period Focus
Q2 
 
 
Amendment Flag
false 
 
 
Trading Symbol
 
 
Entity Common Stock, Shares Outstanding
 
46,121,321 
119,614,584 
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax
$ 1 
$ 1 
$ 1 
$ 3 
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax
$ 0 
$ 1 
$ 0 
$ 1 
Condensed Consolidated Statements Of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
REVENUES:
 
 
 
 
Owned and leased hotels
$ 528 
$ 484 
$ 1,001 
$ 916 
Management and franchise fees
80 
75 
159 
145 
Other revenues
20 
17 
37 
31 
Other revenues from managed properties
386 
360 
775 
719 
Total revenues
1,014 
936 
1,972 
1,811 
DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
 
 
 
 
Owned and leased hotels
389 
372 
766 
726 
Depreciation and amortization
89 
72 
175 
143 
Other direct costs
13 
10 
Selling, general, and administrative
70 
71 
163 
141 
Other costs from managed properties
386 
360 
775 
719 
Direct and selling, general, and administrative expenses
941 
881 
1,892 
1,739 
Net gains (losses) and interest income from marketable securities held to fund operating programs
(4)
10 
Equity earnings (losses) from unconsolidated hospitality ventures
(1)
Interest expense
(17)
(14)
(35)
(27)
Asset Impairments
(1)
(1)
Other income (loss), net
(9)
17 
(6)
INCOME BEFORE INCOME TAXES
57 
35 
71 
51 
(PROVISION) BENEFIT FOR INCOME TAXES
(18)
(22)
(5)
NET INCOME
39 
36 
49 
46 
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
$ 39 
$ 37 
$ 49 
$ 47 
EARNINGS PER SHARE - Basic
 
 
 
 
Net income - Basic
$ 0.24 
$ 0.21 
$ 0.30 
$ 0.27 
Net income attributable to Hyatt Hotels Corporation - Basic
$ 0.24 
$ 0.22 
$ 0.30 
$ 0.28 
EARNINGS PER SHARE - Diluted
 
 
 
 
Net income - Diluted
$ 0.24 
$ 0.21 
$ 0.30 
$ 0.27 
Net income attributable to Hyatt Hotels Corporation - Diluted
$ 0.24 
$ 0.22 
$ 0.30 
$ 0.28 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
NET INCOME
$ 39 
$ 36 
$ 49 
$ 46 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax
(23)
15 
(5)
38 
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
(1)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax
Other Comprehensive Income (Loss), Net of Tax
(24)
17 
(4)
40 
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest
15 
53 
45 
86 
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ 15 
$ 54 
$ 45 
$ 87 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Allowance for receivables
$ 9 
$ 10 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, outstanding
Common Class A
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000 
1,000,000,000 
Common stock, outstanding
46,101,596 
44,683,934 
Common stock, issued
46,137,869 
44,720,207 
Treasury stock, shares
36,273 
36,273 
Common Class B
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
452,472,717 
452,472,717 
Common stock, outstanding
119,614,584 
120,478,305 
Common stock, issued
119,614,584 
120,478,305 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
ASSETS
 
 
Cash and cash equivalents
$ 404 
$ 534 
Restricted cash
43 
27 
Short-term investments
502 
588 
Receivables, net of allowances of $9 and $10 at June 30, 2012 and December 31, 2011, respectively
280 
225 
Inventories
85 
87 
Prepaids and other assets
78 
78 
Prepaid income taxes
30 
29 
Deferred tax assets
18 
23 
Total current assets
1,440 
1,591 
Investments
317 
280 
Property and equipment, net
4,184 
4,043 
Financing receivables, net of allowances
410 
360 
Goodwill
132 
102 
Intangibles, net
376 
359 
Deferred tax assets
244 
197 
Other assets
578 
575 
TOTAL ASSETS
7,681 
7,507 
LIABILITIES AND EQUITY
 
 
Current maturities of long-term debt
Accounts payable
116 
144 
Accrued expenses and other current liabilities
378 
306 
Accrued compensation and benefits
113 
114 
Total current liabilities
611 
568 
Long-term debt
1,220 
1,221 
Other long-term liabilities
967 
890 
Total liabilities
2,798 
2,679 
Commitments and contingencies (see Note 11)
   
   
EQUITY:
 
 
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized and none outstanding as of June 30, 2012 and December 31, 2011
Common stock
Additional paid-in capital
3,390 
3,380 
Retained earnings
1,566 
1,517 
Treasury stock at cost, 36,273 shares at June 30, 2012 and December 31, 2011
(1)
(1)
Accumulated other comprehensive income (loss)
(84)
(80)
Total stockholders' equity
4,873 
4,818 
Noncontrolling interests in consolidated subsidiaries
10 
10 
Total equity
4,883 
4,828 
TOTAL LIABILITIES AND EQUITY
$ 7,681 
$ 7,507 
Condensed Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
NET INCOME
$ 49 
$ 46 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
175 
143 
Deferred income taxes
(6)
Asset Impairments
Equity losses from unconsolidated hospitality ventures, including distributions received
Foreign currency losses
Loss (gain) on sales of real estate
Marketable Securities, Realized Gain (Loss)
(7)
Net unrealized (gains) losses from other marketable securities
(10)
Working capital changes and other
10 
Net cash provided by operating activities of continuing operations
231 
210 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of marketable securities and short-term investments
(123)
(160)
Proceeds from marketable securities and short-term investments
231 
151 
Contributions to investments
(41)
(19)
Acquisitions
(179)
(77)
Capital expenditures
(157)
(118)
Issuance of Notes Receivable
(52)
Proceeds from sales of real estate
90 
Real estate sale proceeds transferred to escrow as restricted cash
(35)
Proceeds from sale of assets held for sale
18 
Real estate sale proceeds transferred from escrow to cash and cash equivalents
97 
Increase in restricted cash - investing
(14)
(1)
Other investing activities
(18)
(16)
Net cash used in investing activities of continuing operations
(353)
(70)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Proceeds from issuance of debt, net of issuance costs
25 
Repurchase of Class B common stock
(396)
Other financing activities
(3)
(3)
Net cash provided by (used in) financing activities of continuing operations
(3)
(374)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(5)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(130)
(234)
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR
534 
1,110 
CASH AND CASH EQUIVALENTS CONTINUING OPERATIONS-END OF PERIOD
404 
876 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
Cash paid during the period for interest
34 
24 
Cash paid during the period for income taxes
21 
22 
Non-cash investing activities are as follows:
 
 
Equity contribution of property and equipment, net (see Note 6)
10 
Equity contribution of long-term debt (see Note 6)
25 
Change in accrued capital expenditures
(38)
23 
Contributions to investments
$ 0 
$ 20 
Organization
Organization
ORGANIZATION
Hyatt Hotels Corporation, a Delaware corporation, and its consolidated subsidiaries (“Hyatt Hotels Corporation”) provide hospitality services on a worldwide basis through the management, franchising and ownership of hospitality related businesses. As of June 30, 2012, we operated or franchised 249 full service hotels consisting of 104,006 rooms, in 45 countries throughout the world. We hold ownership interests in certain of these hotels. As of June 30, 2012, we operated or franchised 220 select service hotels with 29,128 rooms in the United States. We hold ownership interests in certain of these hotels. We develop, operate, manage, license or provide services to Hyatt-branded timeshare, fractional and other forms of residential or vacation properties.
As used in these Notes and throughout this Quarterly Report on Form 10-Q, the terms “Company,” “HHC,” “we,” “us,” or “our” mean Hyatt Hotels Corporation and its consolidated subsidiaries.
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, 2011 (the “2011 Form 10-K”).
We have eliminated all intercompany transactions in our condensed consolidated financial statements. We consolidate entities for which we either have a controlling financial interest or are considered to be the primary beneficiary.
Management believes that 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.
Recently Issued Accounting Standards
Recently Issued Accounting Standards
RECENTLY ISSUED ACCOUNTING STANDARDS
Adopted Accounting Standards

Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 is intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards. The amendments in ASU 2011-04 clarify the intent of the Financial Accounting Standards Board ("FASB") with regard to the application of existing fair value measurement requirements and change some requirements for measuring or disclosing information about fair value measurements. The provisions of ASU 2011-04 became effective for public companies in the first reporting period beginning after December 15, 2011. The adoption of ASU 2011-04 enhanced the disclosure of the fair value of certain financial assets and liabilities that are not required to be recorded at fair value within our financial statements. See Note 4 for discussion of fair value.

In June 2011, the FASB released Accounting Standards Update No. 2011-05 (“ASU 2011-05”), Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU 2011-05 requires companies to present total comprehensive income, the components of net income, and the components of other comprehensive income in either a continuous statement or in two separate but consecutive statements. The amendments of ASU 2011-05 eliminate the option for companies to present the components of other comprehensive income within the statement of changes of stockholders' equity. The provisions of ASU 2011-05 became effective for public companies in fiscal years beginning after December 15, 2011. The adoption of ASU 2011-05 changed our presentation of comprehensive income.

In September 2011, the FASB released Accounting Standards Update No. 2011-08 (“ASU 2011-08”), Intangibles-Goodwill and Other (Topic 350): Testing for Goodwill Impairment. ASU 2011-08 gives companies the option to perform a qualitative assessment before calculating the fair value of the reporting unit. Under the guidance in ASU 2011-08, if this option is selected, a company is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The provisions of ASU 2011-08 became effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, but early adoption was permitted. We adopted ASU 2011-08 during the quarter ended March 31, 2012, but since our annual goodwill impairment test is not performed until the fourth quarter we did not apply its provisions during the six months ended June 30, 2012. We do not expect ASU 2011-08 to materially impact our condensed consolidated financial statements.

In December 2011, the FASB released Accounting Standards Update No. 2011-12 (“ASU 2011-12”), Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2011-12 defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The provisions of ASU 2011-12 became effective for public companies in fiscal years beginning after December 15, 2011. The adoption of ASU 2011-12 did not materially impact our condensed consolidated financial statements.

Future Adoption of Accounting Standards

In December 2011, the FASB released Accounting Standards Update No. 2011-10 (“ASU 2011-10”), Property, Plant and Equipment (Topic 360): Derecognition of in Substance Real Estate-a Scope Clarification (a consensus of the FASB Emerging Issues Task Force). ASU 2011-10 clarifies when a parent (reporting entity) ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary's nonrecourse debt, the reporting entity should apply the guidance for Real Estate Sale (Subtopic 360-20). The provisions of ASU 2011-10 become effective for public companies for fiscal years and interim periods within those years, beginning on or after June 15, 2012. The adoption of ASU 2011-10 is not expected to materially impact our condensed consolidated financial statements.

In December 2011, the FASB released Accounting Standards Update No. 2011-11 (“ASU 2011-11”), Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 requires companies to provide new disclosures about offsetting and related arrangements for financial instruments and derivatives. The provisions of ASU 2011-11 are effective for annual reporting periods beginning on or after January 1, 2013, and are required to be applied retrospectively. When adopted, ASU 2011-11 is not expected to materially impact our condensed consolidated financial statements.
Equity And Cost Method Investments
Equity And Cost Method Investments
    EQUITY AND COST METHOD INVESTMENTS
We have investments that are recorded under both the equity and cost methods. These investments are considered to be an integral part of our business and are strategically and operationally important to our overall results. Our equity and cost method investment balances recorded at June 30, 2012 and December 31, 2011 are as follows:
 
 
June 30, 2012
 
December 31, 2011
Equity method investments
$
244

 
$
207

Cost method investments
73

 
73

Total investments
$
317

 
$
280



During the six months ended June 30, 2012, we invested $37 million in a joint venture, which is classified as an equity method investment, to develop, own and operate a hotel property in the State of Hawaii.

During the second quarter of 2011, we contributed $20 million to a newly formed joint venture with Noble Investment Group ("Noble") in return for a 40% ownership interest in the venture (see Note 6). In addition, the Company and Noble agreed to invest in the strategic new development of select service hotels in the United States. Under that agreement, we are required to contribute up to a maximum of 40% of the equity necessary to fund up to $80 million (i.e. $32 million) of such new development.
The three and six months ended June 30, 2012 includes $1 million in impairment charges in equity earnings (losses) from unconsolidated hospitality ventures related to a vacation ownership property.
Income from cost method investments included in our condensed consolidated statements of income for the three and six months ended June 30, 2012 and 2011 was insignificant.
The following table presents summarized financial information for all unconsolidated ventures in which we hold an investment that is accounted for under the equity method.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Total revenues
$
251

 
$
229

 
$
494

 
$
468

Gross operating profit
82

 
71

 
153

 
147

Income from continuing operations
5

 
12

 
3

 
23

Net income
5

 
12

 
3

 
23

Fair Value Measurement
Fair Value Measurement
FAIR VALUE MEASUREMENT
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). GAAP establishes a valuation hierarchy for prioritizing the inputs and the hierarchy places greater emphasis on the use of observable market inputs and less emphasis on unobservable inputs. When determining fair value, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the hierarchy are as follows:
Level One—Fair values based on unadjusted quoted prices in active markets for identical assets and liabilities;
Level Two—Fair values based on quoted market prices for similar assets and liabilities in active markets, quoted prices in inactive markets for identical assets and liabilities, and inputs other than quoted market prices that are observable for the asset or liability;
Level Three—Fair values based on inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Valuation techniques could include the use of discounted cash flow models and similar techniques.
We have various financial instruments that are measured at fair value including certain marketable securities and derivative instruments. We currently do not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis.
We utilize the market approach and income approach for valuing our financial instruments. The market approach utilizes prices and information generated by market transactions involving identical or similar assets and liabilities and the income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). For instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of June 30, 2012 and December 31, 2011, we had the following financial assets and liabilities measured at fair value on a recurring basis:
 
 
June 30, 2012
 
Quoted Prices in
Active Markets for
Identical Assets
(Level One)
 
Significant Other
Observable Inputs
(Level Two)
 
Significant
Unobservable Inputs
(Level Three)
Marketable securities included in
short-term investments, prepaids and
other assets and other assets
 
 
 
 
 
 
 
Mutual funds
$
259

 
$
259

 
$

 
$

Equity securities
28

 
28

 

 

U.S. government obligations
105

 

 
105

 

U.S. government agencies
99

 

 
99

 

Corporate debt securities
479

 

 
479

 

Mortgage-backed securities
20

 

 
20

 

Asset-backed securities
8

 

 
8

 

Municipal and provincial notes and bonds
14

 

 
14

 

Marketable securities recorded in
cash and cash equivalents
 
 
 
 
 
 
 
Interest bearing money market funds
103

 
103

 

 

Derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
6

 

 
6

 

Foreign currency forward contracts
(1
)
 

 
(1
)
 


 
December 31, 2011
 
Quoted Prices in
Active Markets for
Identical Assets
(Level One)
 
Significant Other
Observable Inputs
(Level Two)
 
Significant
Unobservable Inputs
(Level Three)
Marketable securities included in short-term investments, prepaids and other assets and other assets
 
 
 
 
 
 
 
Mutual funds
$
242

 
$
242

 
$

 
$

Equity securities
35

 
35

 

 

U.S. government obligations
102

 

 
102

 

U.S. government agencies
132

 

 
132

 

Corporate debt securities
487

 

 
487

 

Mortgage-backed securities
23

 

 
21

 
2

Asset-backed securities
7

 

 
7

 

Municipal and provincial notes and bonds
14

 

 
14

 

Marketable securities recorded in cash and cash equivalents
 
 
 
 
 
 
 
Interest bearing money market funds
60

 
60

 

 

Derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
7

 

 
7

 

Foreign currency forward contracts
(1
)
 

 
(1
)
 


During the three and six months ended June 30, 2012 and 2011, there were no transfers between levels of the fair value hierarchy. Our policy is to recognize transfers in and transfers out as of the end of each quarterly reporting period.
Marketable Securities
Our portfolio of marketable securities consists of various types of U.S. Treasury securities, mutual funds, common stock, and fixed income securities, including government agencies, municipal, provincial and corporate bonds. The fair value of our mutual funds and certain equity securities were classified as Level One as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. The remaining securities, except for certain mortgage-backed securities at December 31, 2011, were classified as Level Two due to the use and weighting of multiple market inputs being considered in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities.
Included in our portfolio of marketable securities are investments in debt and equity securities classified as available for sale. At June 30, 2012 and December 31, 2011 these were as follows:
 
 
June 30, 2012
 
Cost or Amortized
Cost
 
Gross Unrealized
Gain
 
Gross Unrealized
Loss
 
Fair Value
Corporate debt securities
$
383

 
$
6

 
$
(6
)
 
$
383

U.S. government agencies and municipalities
61

 

 

 
61

Equity securities
9

 

 
(1
)
 
8

Total
$
453

 
$
6

 
$
(7
)
 
$
452

 
 
December 31, 2011
 
Cost or Amortized
Cost
 
Gross Unrealized
Gain
 
Gross Unrealized
Loss
 
Fair Value
Corporate debt securities
$
406

 
$
5

 
$
(5
)
 
$
406

U.S. government agencies and municipalities
93

 

 

 
93

Equity securities
9

 

 
(2
)
 
7

Total
$
508

 
$
5

 
$
(7
)
 
$
506



Gross realized gains and losses on available for sale securities were insignificant for the three and six months ended June 30, 2012 and 2011.
The table below summarizes available for sale fixed maturity securities by contractual maturity at June 30, 2012. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid with or without call or prepayment penalties. Securities not due at a single date are allocated based on weighted average life. Although a portion of our available for sale fixed maturity securities mature after one year, we have chosen to classify the entire portfolio as current. The portfolio’s objectives are to preserve capital, provide liquidity to satisfy operating requirements, working capital purposes and strategic initiatives and capture a market rate of return. Therefore, since these securities represent funds available for current operations, the entire investment portfolio is classified as current assets.
 
 
June 30, 2012
Contractual Maturity
Cost or Amortized
Cost
 
Fair Value
Due in one year or less
$
269

 
$
269

Due in one to two years
175

 
175

Total
$
444

 
$
444


We invest a portion of our cash balance into short-term interest bearing money market funds that have a maturity of less than ninety days. Consequently, the balances are recorded in cash and cash equivalents. The funds are held with open-ended registered investment companies and the fair value of the funds is classified as Level One as we are able to obtain market available pricing information on an ongoing basis.
The amount of total gains or losses included in net gains (losses) and interest income from marketable securities held to fund operating programs due to the change in unrealized gains or losses relating to assets still held at the reporting date for the three and six months ended June 30, 2012 and 2011 were insignificant.
Derivative Instruments
Our derivative instruments are foreign currency exchange rate instruments and interest rate swaps. The instruments are valued using an income approach with factors such as interest rates and yield curves, which represent market observable inputs and are generally classified as Level Two. Credit valuation adjustments may be made to ensure that derivatives are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality and our nonperformance risk. As of June 30, 2012 and December 31, 2011, the credit valuation adjustments were insignificant. See Note 8 for further details on our derivative instruments.
Mortgage Backed Securities
During the six months ended June 30, 2012, we sold mortgage backed securities that had been classified as Level 3 at December 31, 2011. The following table provides a reconciliation of the beginning and ending balances for the mortgage backed securities measured at fair value using significant unobservable inputs (Level 3):
 
Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) - Mortgage Backed Securities
 
2012
 
2011
Balance at January 1,
$
2

 
$
2

Transfers into (out of) Level Three

 

Settlements
(2
)
 

Total gains (losses) (realized or unrealized)

 

Balance at March 31,
$

 
$
2

Transfers into (out of) Level Three

 

Settlements

 

Total gains (losses) (realized or unrealized)

 

Balance at June 30,
$

 
$
2



Other Financial Instruments
We estimated the fair value of financing receivables using discounted cash flow analysis based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified our financing receivables as Level Three. The primary sensitivity in these calculations is based on the selection of appropriate interest and discount rates. Fluctuations in these assumptions will result in different estimates of fair value. For further information on financing receivables see Note 5.
We estimated the fair value of debt, excluding capital leases, which consists of our Senior Notes. Our Senior Notes are classified as Level Two due to the use and weighting of multiple market inputs in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities.
The carrying amounts and fair values of our other financial instruments are as follows:

 
Asset (Liability)
 
June 30, 2012
 
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)
Financing receivables
 
 
 
 
 
 
 
 
 
Secured financing to hotel owners
$
312

 
$
311

 
$

 
$

 
$
311

Vacation ownership mortgage receivable
41

 
42

 

 

 
42

Unsecured financing to hotel owners
68

 
68

 

 

 
68

Debt, excluding capital lease obligations
(1,008
)
 
(1,122
)
 

 
(1,122
)
 


 
Asset (Liability)
 
December 31, 2011
 
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)
Financing receivables
 
 
 
 
 
 
 
 
 
Secured financing to hotel owners
$
312

 
$
311

 
$

 
$

 
$
311

Vacation ownership mortgage receivable
42

 
42

 

 

 
42

Unsecured financing to hotel owners
16

 
15

 

 

 
15

Debt, excluding capital lease obligations
(1,008
)
 
(1,059
)
 

 
(1,059
)
 

Financing Receivables
Financing Receivables
5.    FINANCING RECEIVABLES
We have divided our financing receivables, which includes loans and other financing arrangements, into three portfolio segments based on their initial measurement, risk characteristics and our method for monitoring or assessing credit risk. These portfolio segments correspond directly with our assessed class of receivables and are as follows:
Secured Financing to Hotel Owners—These financing receivables are senior secured mortgage loans and are collateralized by underlying hotel properties currently in operation. These loans consist primarily of a $278 million mortgage loan receivable to an unconsolidated hospitality venture which was formed to acquire ownership of a hotel property in Waikiki, Hawaii, and which is accounted for under the equity method. This mortgage receivable has interest set at 30-day LIBOR+3.75% due monthly and a stated maturity date of July 2013. Secured financing to hotel owners also includes financing provided to certain franchisees for the renovations and conversion of certain franchised hotels. These franchisee loans accrue interest at fixed rates ranging between 5.5% and 6.0%.
Vacation Ownership Mortgage Receivables—These financing receivables are comprised of various mortgage loans related to our financing of vacation ownership interval sales. As of June 30, 2012, the weighted-average interest rate on vacation ownership mortgage receivables was 13.9%.
Unsecured Financing to Hotel Owners—These financing receivables are primarily made up of individual unsecured loans and other types of financing arrangements provided to hotel owners. During the quarter ended June 30, 2012, we entered into a loan agreement to provide a $50 million mezzanine loan for the construction of a hotel that we will manage. Under the loan agreement, interest accrues at the greater of one-month LIBOR plus 5.0%, or 6.5%. Our other financing receivables have stated maturities and interest rates, however, the expected repayment terms may be dependent on the future cash flows of the hotel and, therefore, are not considered loans as the repayment date is not fixed or determinable. Because these arrangements are not considered loans, we do not include them in our impaired loans analysis. Since these receivables may come due earlier than the stated maturity date, the expected maturity dates have been excluded from the maturities table below.
The three portfolio segments of financing receivables and their balances at June 30, 2012 and December 31, 2011 are as follows:
 
 
June 30, 2012
 
December 31, 2011
Secured financing to hotel owners
$
319

 
$
319

Vacation ownership mortgage receivables at various interest rates with varying payments through 2022
49

 
50

Unsecured financing to hotel owners
144

 
91

 
512

 
460

Less allowance for losses
(91
)
 
(90
)
Less current portion included in receivables, net
(11
)
 
(10
)
Total long-term financing receivables
$
410

 
$
360


Financing receivables held by us as of June 30, 2012 are scheduled to mature as follows: 
Year Ending December 31,
Secured Financing to Hotel Owners
 
Vacation Ownership Mortgage Receivables
2012
$
1

 
$
3

2013
278

 
7

2014

 
8

2015
40

 
8

2016

 
7

2017

 
5

Thereafter

 
11

Total
319

 
49

Less allowance
(7
)
 
(8
)
Net financing receivables
$
312

 
$
41


Allowance for Losses and Impairments
We individually assess all loans in the secured financing to hotel owners portfolio and in the unsecured financing to hotel owners portfolio for impairment. We assess the vacation ownership mortgage receivables portfolio, which consists entirely of loans, for impairment on an aggregate basis. We do not assess, for impairment, our other financing arrangements included in unsecured financing to hotel owners. However, we do regularly evaluate our reserves for these other financing arrangements and record provisions in the financing receivables allowance as necessary. Impairment charges for loans within all three portfolios and reserves related to our other financing arrangements are recorded as provisions in the financing receivables allowance. We consider the provisions on all of our portfolio segments to be adequate based on the economic environment and our assessment of the future collectability of the outstanding loans.
The following tables summarize the activity in our financing receivables allowance for the three and six months ended June 30, 2012 and 2011:
 
Secured Financing
 
Vacation Ownership
 
Unsecured Financing
 
Total
Allowance at January 1, 2012
$
7

 
$
8

 
$
75

 
$
90

  Provisions

 
1

 
3

 
4

  Write-offs

 
(1
)
 
(3
)
 
(4
)
  Recoveries

 

 

 

Allowance at March 31, 2012
$
7

 
$
8

 
$
75

 
$
90

  Provisions

 
2

 
3

 
5

  Write-offs

 
(2
)
 

 
(2
)
  Recoveries

 

 
(2
)
 
(2
)
Allowance at June 30, 2012
$
7

 
$
8

 
$
76

 
$
91


 
Secured Financing
 
Vacation Ownership
 
Unsecured Financing
 
Total
Allowance at January 1, 2011
$
4

 
$
10

 
$
68

 
$
82

  Provisions

 
1

 
1

 
2

  Other Adjustments

 

 
1

 
1

  Write-offs
(1
)
 
(1
)
 

 
(2
)
  Recoveries

 

 

 

Allowance at March 31, 2011
$
3

 
$
10

 
$
70

 
$
83

  Provisions

 

 
2

 
2

  Other Adjustments

 

 

 

  Write-offs

 
(1
)
 

 
(1
)
  Recoveries

 

 

 

Allowance at June 30, 2011
$
3

 
$
9

 
$
72

 
$
84


Note: Amounts included in other adjustments represent currency translation on foreign currency denominated financing receivables.
We routinely evaluate loans within financing receivables for impairment. To determine whether an impairment has occurred, we evaluate the collectability of both interest and principal. A loan is considered to be impaired when the Company determines that it is probable that we will not be able to collect all amounts due under the contractual terms. We do not record interest income for impaired loans unless cash is received, in which case the payment is recorded to other income (loss), net in the accompanying condensed consolidated statements of income. During the three and six months ended June 30, 2012, we recorded impairment charges of $2 million and $3 million, respectively, for loans. There were no impairment charges recorded during the three and six months ended June 30, 2011.
An analysis of our loans included in secured financing to hotel owners and unsecured financing to hotel owners had the following impaired amounts at June 30, 2012 and December 31, 2011, all of which had a related allowance recorded against them:
Impaired Loans
June 30, 2012
 
Gross Loan Balance (Principal and Interest)
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Loan Balance
Secured financing to hotel owners
$
40

 
$
40

 
$
(7
)
 
$
40

Unsecured financing to hotel owners
51

 
46

 
(47
)
 
50


Impaired Loans
December 31, 2011
 
Gross Loan Balance (Principal and Interest)
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Loan Balance
Secured financing to hotel owners
$
41

 
$
40

 
$
(7
)
 
$
40

Unsecured financing to hotel owners
51

 
46

 
(46
)
 
51


Interest income recognized on these impaired loans within other income (loss), net on our condensed consolidated statements of income for the three and six months ended June 30, 2012 and 2011 was as follows:
Interest Income
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Secured financing to hotel owners
$

 
$

 
$
1

 
$
1

Unsecured financing to hotel owners

 

 

 


Credit Monitoring
On an ongoing basis, we monitor the credit quality of our financing receivables based on payment activity. We categorize our financing receivables as follows:
Past-due Receivables—We determine financing receivables to be past-due based on the contractual terms of each individual financing receivable agreement.
Non-Performing Receivables—Receivables are determined to be non-performing based upon the following criteria: (1) if interest or principal is greater than 90 days past due for secured financing to hotel owners and unsecured financing to hotel owners; (2) 120 days past due for vacation ownership mortgage receivables; (3) if an impairment charge has been recorded for a loan or a provision established for our other financing arrangements. For the three and six months ended June 30, 2012 and 2011, no interest income was accrued for secured financing to hotel owners and unsecured financing to hotel owners greater than 90 days past due and for vacation ownership receivables greater than 120 days past due. For the three and six months ended June 30, 2012 and 2011, insignificant interest income was accrued for vacation ownership receivables greater than 90 days and less than 120 days.
If a financing receivable is non-performing, we place the financing receivable on non-accrual status. We only recognize interest income when received for financing receivables on non-accrual status. Accrual of interest income is resumed when the receivable becomes contractually current and collection doubts are removed.
The following tables summarize our aged analysis of past-due financing receivables by portfolio segment, the gross balance of financing receivables greater than 90 days past-due and the gross balance of financing receivables on non-accrual status as of June 30, 2012 and December 31, 2011:
 
Analysis of Financing Receivables
June 30, 2012
 
Receivables
Past Due
 
Greater than 90 Days Past Due
 
Receivables on
Non-Accrual
Status
Secured financing to hotel owners
$

 
$

 
$
41

Vacation ownership mortgage receivables
2

 

 

Unsecured financing to hotel owners *
3

 
3

 
77

Total
$
5

 
$
3

 
$
118


Analysis of Financing Receivables
December 31, 2011
 
Receivables
Past Due
 
Greater than 90 Days Past Due
 
Receivables on
Non-Accrual
Status
Secured financing to hotel owners
$

 
$

 
$
41

Vacation ownership mortgage receivables
3

 

 

Unsecured financing to hotel owners *
6

 
6

 
76

Total
$
9

 
$
6

 
$
117


* Certain of these receivables have been placed on non-accrual status and we have recorded allowances for these receivables based on estimates of the future cash flows available for payment of these financing receivables. However, a majority of these payments are not past due.
Acquisitions, Dispositions, and Discontinued Operations
Acquisitions Dispositions And Discontinued Operations
ACQUISITIONS, DISPOSITIONS, AND DISCONTINUED OPERATIONS
We continually assess strategic acquisitions and dispositions to complement our current business.
Acquisitions
Hyatt Regency Mexico City—During the second quarter of 2012, we acquired all of the outstanding shares of capital stock of a company that owned a full service hotel in Mexico City, Mexico in order to expand our presence in the region. The total purchase price was approximately $201 million. As part of the purchase, we acquired cash and cash equivalents of $11 million, resulting in a net purchase price of $190 million. We began managing this property during the second quarter and have rebranded it as Hyatt Regency Mexico City.
In conjunction with the acquisition, we entered into a holdback escrow agreement. Pursuant to the holdback escrow agreement, we withheld $11 million from the purchase price and placed it into an escrow account, which was classified as restricted cash on our condensed consolidated balance sheet. The funds in the escrow account will be released to the seller, less any indemnity claims, upon satisfaction of the terms pursuant to the holdback escrow agreement within the nine months following the close of the transaction. Because we expect the terms of the holdback escrow agreement to be satisfied, we have recorded a corresponding liability on our condensed consolidated balance sheet.
The following table summarizes the preliminary estimated fair value of the identifiable assets acquired and liabilities assumed in our owned and leased hotels segment for the acquisition (in millions):
Cash and cash equivalents
$
11

Other current assets
3

Land, property, and equipment
190

Intangibles
12

Total assets
216

Current liabilities
3

Other long-term liabilities
42

Total liabilities
45

     Total net assets acquired
$
171


The acquisition created goodwill of Mexican Peso ("MXP") 410 million, or $30 million at the date of acquisition, which is not deductible for tax purposes and is recorded within our owned and leased segment. The definite lived intangibles, which are substantially comprised of management intangibles, will be amortized over a weighted average useful life of 17 years. Within the other long-term liabilities is a $41 million deferred tax liability, the majority of which relates to property and equipment.
Supplemental Information for our Acquisitions—The results of the Hyatt Regency Mexico City since the acquisition date have been included in our condensed consolidated financial statements.  The following table presents the results of this property since the acquisition date on a stand-alone basis:
 
Hyatt Regency Mexico City's operations included in 2012 results
Revenues
$
5

Income from continuing operations
1


The following table presents our revenues and income from continuing operations on a pro forma basis as if we had completed the acquisition and rebranding of the Hyatt Regency Mexico City as of January 1, 2011:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Pro forma revenues
$
1,020

 
$
948

 
$
1,990

 
$
1,833

Pro forma income from continuing operations
41

 
39

 
53

 
48


The above 2012 pro forma income from continuing operations for the three and six months ended June 30, 2012 excludes $1 million, respectively, of transaction costs incurred to acquire a company that owned the hotel and other assets that were recorded to other income (loss), net on our condensed consolidated statements of income. The six months ended June 30, 2011 pro forma income from continuing operations was adjusted to include these charges.
Woodfin Suites—During the second quarter of 2011, we acquired three Woodfin Suites properties in California for a total purchase price of approximately $77 million. We began managing these properties during the second quarter of 2011 and have rebranded them as Hyatt Summerfield Suites.  
Dispositions
Hyatt Place and Hyatt Summerfield Suites—During the second quarter of 2011, we sold six Hyatt Place and two Hyatt Summerfield Suites properties to a newly formed joint venture with an affiliate of Noble Investment Group, LLC, in which the Company holds a 40% ownership interest. The properties were sold for a combined sale price of $110 million, or $90 million net of our $20 million contribution to the new joint venture. The sale resulted in a pretax loss of $2 million, which has been recognized in other income (loss), net on our condensed consolidated statements of income. In conjunction with the sale, we entered into a long-term franchise agreement with the joint venture for each property. The six Hyatt Place and two Hyatt Summerfield Suites hotels continue to be operated as Hyatt-branded hotels. The operating results and financial positions of these hotels prior to the sale remain within our owned and leased hotels segment.
Hyatt Regency Minneapolis—During the first quarter of 2011, we entered into an agreement with third parties to form a new joint venture, the purpose of which was to own and operate the Hyatt Regency Minneapolis. We contributed a fee simple interest in the Hyatt Regency Minneapolis to the joint venture as part of our equity interest subject to a $25 million loan to the newly formed joint venture. HHC has guaranteed the repayment of the loan (see Note 11). In conjunction with our contribution, we entered into a long-term management contract with the joint venture. The terms of the joint venture provide for capital contributions by the non-HHC partners that will be used to complete a full renovation of the Hyatt Regency Minneapolis.
Like-Kind Exchange Agreements
In conjunction with the sale of three Hyatt Place properties in the second quarter of 2011, we entered into a like-kind exchange agreement with an intermediary. Pursuant to the like-kind exchange agreement, the proceeds from the sales of these three hotels were placed into an escrow account administered by the intermediary. Therefore, we classified the net proceeds of $35 million as restricted cash on our condensed consolidated balance sheet as of June 30, 2011 which was subsequently utilized during the third quarter of 2011 as part of the purchase of hotels and other assets from LodgeWorks, L.P. and its private equity partners.
During the six months ended June 30, 2011, we released the net proceeds from the 2010 sales of Grand Hyatt Tampa Bay and Hyatt Regency Greenville of $56 million and $15 million, respectively, from restricted cash on our condensed consolidated balance sheet, as a like-kind exchange agreement was not consummated within applicable time periods. The net proceeds of $26 million from the sale of Hyatt Deerfield were utilized in a like-kind exchange agreement to acquire one of the Woodfin Suites properties.
Assets Held for Sale
During the first quarter of 2011, we closed on the sale of a Company owned airplane to a third party for net proceeds of $18 million. The transaction resulted in a small pre-tax gain upon sale.
Goodwill And Intangible Assets
Goodwill And Intangible Assets
GOODWILL AND INTANGIBLE ASSETS
We review the carrying value of all our goodwill by comparing the carrying value of our reporting units to their fair values in a two-step process. We define a reporting unit at the individual property or business level. We are required to perform this comparison at least annually or more frequently if circumstances indicate that a possible impairment exists. When determining fair value in step one, we utilize internally developed discounted future cash flow models, third party appraisals and, if appropriate, current estimated net sales proceeds from pending offers. We then compare the estimated fair value to our carrying value. If the carrying value is in excess of the fair value, we must determine our implied fair value of goodwill to measure if any impairment charge is necessary.
Goodwill was $132 million at June 30, 2012 and $102 million at December 31, 2011. The increase in goodwill is due to the acquisition of the Hyatt Regency Mexico City which created goodwill of MXP 410 million, or $30 million (see Note 6). During the three and six months ended June 30, 2012 and 2011, no impairment charges were recorded related to goodwill.

Definite lived intangible assets primarily include contract acquisition costs, acquired lease rights, and acquired franchise and management intangibles. Contract acquisition costs and franchise and management intangibles are generally amortized on a straight-line basis over their contract terms, which range from approximately 5 to 40 years and 10 to 30 years, respectively. Acquired lease rights are amortized on a straight-line basis over the lease term. Definite lived intangibles are tested for impairment whenever events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. There were no impairment charges related to intangible assets with definite lives during the three and six months ended June 30, 2012 and 2011.
The following is a summary of intangible assets at June 30, 2012 and December 31, 2011:
 
 
June 30, 2012
 
Weighted
Average Useful
Lives (in years)
 
December 31, 2011
Contract acquisition costs
$
181

 
23
 
$
167

Acquired lease rights
135

 
112
 
133

Franchise and management intangibles
125

 
25
 
115

Other
9

 
10
 
7

 
450

 
 
 
422

Accumulated amortization
(74
)
 
 
 
(63
)
Intangibles, net
$
376

 
 
 
$
359


Amortization expense relating to intangible assets was as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization expense
$
7

 
$
5

 
$
12

 
$
8

Derivative Instruments
Derivative Instruments
DERIVATIVE INSTRUMENTS
It is our policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. As a result of the use of derivative instruments, we are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we have a policy of only entering into contracts with carefully selected major financial institutions based upon their credit rating and other factors. Our derivative instruments do not contain credit-risk related contingent features.
All derivatives are recognized on the balance sheet at fair value. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in accumulated other comprehensive loss on the balance sheet until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk are recorded in current earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged on the statement of cash flows. Cash flows from undesignated derivative financial instruments are included in the investing category on the statement of cash flows.
Interest Rate Swap Agreements—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. Interest rate derivative transactions, including interest rate swaps, are entered to maintain a level of exposure to interest rates which the Company deems acceptable.
As of June 30, 2012 and December 31, 2011, we held a total of seven and eight $25 million interest rate swap contracts, respectively, each of which expires on August 15, 2015. Taken together, these swap contracts effectively convert a total of $175 million and $200 million, as of June 30, 2012 and December 31, 2011, respectively, of the $250 million of senior notes issued in August 2009 with a maturity date of August 15, 2015 (the “2015 Notes”) to floating rate debt based on three-month LIBOR plus a fixed rate component. The fixed rate component of each swap varies by contract, ranging from 2.68% to 4.77%. The interest rate swaps were designated as a fair value hedge as their objective is to protect the 2015 Notes against changes in fair value due to changes in the three-month LIBOR interest rate. The swaps were designated as fair value hedges at inception and at June 30, 2012 and December 31, 2011 were highly effective in offsetting fluctuations in the fair value of the 2015 Notes. At June 30, 2012 and December 31, 2011, the fixed to floating interest rate swaps were recorded within other assets at a value of $6 million and $7 million, respectively, offset by a fair value adjustment to long-term debt of $9 million and $8 million, respectively. At June 30, 2012 and December 31, 2011, the difference between the other asset value and fair market value adjustment to long-term debt includes the ineffective portion of the swap life-to-date in the amount of $1 million and $1 million, respectively. During the three months ended June 30, 2012, we terminated a $25 million interest rate swap contract. Upon termination the Company received a cash payment of $2 million to settle the fair value of the swap, this amount is included within the carrying value of long-term debt at June 30, 2012 and will be amortized to interest expense over the remaining term of the 2015 Note.
Interest Rate Lock—During the three months ended June 30, 2011, we entered into treasury-lock derivative instruments with $250 million of notional value to hedge a portion of the risk of changes in the benchmark interest rate associated with the senior notes issued in August 2011 with a maturity date of August 15, 2021 (the “2021 Notes”). These derivative instruments were designated as cash flow hedges at inception and at June 30, 2011 were highly effective in offsetting fluctuations in the benchmark interest rate. Changes in the fair value relating to the effective portion of the lock were recorded in accumulated other comprehensive loss and the corresponding fair value was included in prepaids and other assets.
We settled the treasury-lock derivative instruments at the inception of the loan agreement for the 2021 Notes in August 2011. The $14 million loss on the settlement was recorded to accumulated other comprehensive loss and will be amortized over the remaining life of the 2021 Notes. For the three and six months ended June 30, 2012, the amount of incremental interest expense was insignificant and $1 million, respectively.
Foreign Currency Exchange Rate Instruments—We transact business in various foreign currencies and utilize foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. Our strategy is to have increases or decreases in our foreign currency exposures offset by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign currency transaction gains or losses. These foreign currency exposures typically arise from intercompany loans and other intercompany transactions. Our foreign currency forward contracts generally settle within 12 months. We do not use these forward contracts for trading purposes. We do not designate these forward contracts as hedging instruments. Accordingly, we record the fair value of these contracts as of the end of our reporting period to our condensed consolidated balance sheets with changes in fair value recorded in our condensed consolidated statements of income within other income (loss), net for both realized and unrealized gains and losses. The balance sheet classification for the fair values of these forward contracts is to prepaids and other assets for unrealized gains and to accrued expenses and other current liabilities for unrealized losses.
The U.S. dollar equivalent of the notional amount of the outstanding forward contracts, the majority of which relate to intercompany loans, with terms of less than one year, is as follows (in U.S. dollars):
 
June 30, 2012
 
December 31, 2011
Pound Sterling
$
152

 
$
126

Swiss Franc
46

 
59

Korean Won
33

 
33

Canadian Dollar
27

 
27

Total notional amount of forward contracts
$
258

 
$
245


Certain energy contracts at our hotel properties include derivatives. However, we qualify for and have elected the normal purchases or sales exemption for these derivatives.
The effects of derivative instruments on our condensed consolidated financial statements were as follows as of June 30, 2012December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011:
Fair Values of Derivative Instruments
 
Asset Derivatives
 
Liability Derivatives
 
Balance Sheet
Location
 
June 30,
2012
 
December 31,
2011
 
Balance Sheet Location
 
June 30,
2012
 
December 31,
2011
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Other assets
 
$
6

 
$
7

 
Other long-term
liabilities
 
$

 
$

Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
Prepaids and
other assets
 

 

 
Accrued expenses and
other current liabilities
 
1

 
1

Total derivatives
 
 
$
6

 
$
7

 
 
 
$
1

 
$
1


Effect of Derivative Instruments on Income
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
 
2012
 
2011
 
2012
 
2011
Fair value hedges:
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
 
 
 
 
 
 
 
 
Gains (losses) on derivatives
Other income (loss), net*
 
$
1

 
$
2

 
$
1

 
$
1

Gains (losses) on borrowings
Other income (loss), net*
 
(1
)
 
(2
)
 
(1
)
 
(1
)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
 
2012
 
2011
 
2012
 
2011
Cash flow hedges:
 
 
 
 
 
 
 
 
 
Interest rate locks
 
 
 
 
 
 
 
 
 
Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivative (effective portion)
Accumulated other comprehensive loss
 
$

 
$
4

 
$

 
$
4

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion)
Interest expense
 

 

 

 

Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Other income (loss), net**
 

 

 

 

 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
2012
 
2011
 
2012
 
2011
Derivatives not designated as hedges:
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
Other income (loss), net
 
$
4

 
$
(6
)
 
$
(2
)
 
$
(8
)
 
*
For the three and six months ended June 30, 2012 and 2011, there was an insignificant loss recognized in income related to the ineffective portion of these hedges. No amounts were excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2012 and 2011.

**
For the three and six months ended June 30, 2011, there was an insignificant gain recognized in income related to the ineffective portion of these hedges. No incremental amounts were excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2011.
Employee Benefit Plans
Employee Benefit Plans
EMPLOYEE BENEFIT PLANS

Descriptions of our employee benefit plans and the related costs incurred for the three and six months ended June 30, 2012 and 2011 are provided below:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Defined benefit plan
$
1

 
$
1

 
$
1

 
$
1

Defined contribution plans
9

 
8

 
18

 
17

Deferred compensation plan
1

 
1

 
5

 
4


Defined Benefit Plan—We sponsor a frozen unfunded supplemental defined benefit executive retirement plan for certain former executives.
Defined Contribution Plans—We provide retirement benefits to certain qualified employees under the Retirement Savings Plan (a qualified plan under Internal Revenue Code Section 401(k)), the Field Retirement Plan (a nonqualified plan), and other similar plans. We record expenses related to the Retirement Savings Plan based on a percentage of qualified employee contributions on stipulated amounts; a substantial portion of these contributions are included in the other revenues from managed properties and other costs from managed properties lines in the condensed consolidated statements of income as the costs of these programs are largely related to employees located at lodging properties managed by us and are therefore paid for by the property owners.
Deferred Compensation Plan—We provide a deferred compensation plan in which contributions and investment elections are determined by the employees. The Company also provides contributions according to preapproved formulas. A portion of these contributions relate to hotel property level employees, which are reimbursable to us and are included in the other revenues from managed properties and other costs from managed properties lines in the condensed consolidated statements of income. As of June 30, 2012 and December 31, 2011, the plan is fully funded in a rabbi trust. The assets of the plan are primarily invested in mutual funds, which are recorded in other assets in the condensed consolidated balance sheets. The related deferred compensation liability is recorded in other long-term liabilities.
Income Taxes
Income Tax Disclosure
INCOME TAXES

The effective income tax rates for the three months ended June 30, 2012 and 2011 were 30.3% and (2.7)%, respectively. The effective income tax rates from continuing operations for the six months ended June 30, 2012 and 2011 were 30.8% and 9.2%, respectively.

For the three months ended June 30, 2012, the effective tax rate is lower than the U.S. statutory federal income tax rate of 35% primarily due to foreign earnings subject to tax at rates below the U.S. rate and the recognition of foreign tax credits of $10 million. These benefits are partially offset by a provision of approximately $7 million resulting from a reduction in the deferred tax assets of certain non-consolidated investments. For the six months ended June 30, 2012, the effective tax rate is lower than the U.S. statutory federal income tax rate of 35% primarily due to the recognition of foreign tax credits of $10 million and a release of $5 million in reserves for interest related to our treatment for expensing certain renovation costs in prior years. The rate was further reduced by foreign earnings subject to tax at rates below the U.S. rate. These benefits are partially offset by the $7 million provision described above as well as a provision of approximately $4 million (including $2 million of interest and penalties) for uncertain tax positions in foreign jurisdictions.

For the three months ended June 30, 2011, the effective tax rate differed from the U.S. statutory federal income tax rate of 35% primarily due to an increase in deferred tax assets of $12 million related to the release of a valuation allowance against certain foreign net operating losses. In addition, the reduced effective tax rate is due to foreign operations taxed at rates below the U.S. rate. For the six months ended June 30, 2011, the effective tax rate differed from the U.S. statutory federal income tax rate of 35% primarily due to an increase in deferred tax assets of $12 million related to the release of a valuation allowance against certain foreign net operating losses, and certain other adjustments to foreign deferred taxes of $2 million. In addition, the reduced effective tax rate is due to foreign operations taxed at rates below the U.S. rate. These items were partially offset by unrecognized tax benefits of $4 million (including $3 million of interest and penalties).

Total unrecognized tax benefits at June 30, 2012 and December 31, 2011 were $175 million, of which $49 million would impact the effective tax rate if recognized. It is reasonably possible that a reduction of up to $46 million of unrecognized tax benefits could occur within twelve months resulting from the resolution of audit examinations and the expiration of certain tax statutes of limitations.
Commitments And Contingencies
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, we enter into various commitments, guarantees, surety bonds, and letter of credit agreements, which are discussed below:
Guarantees and Commitments—As of June 30, 2012, we are committed, under certain conditions, to lend or invest up to $536 million, net of any related letters of credit, in various business ventures.
Included in the $536 million in commitments are the following:

Our share of a hospitality venture’s commitment to purchase a hotel within a to-be constructed building in New York City for a total purchase price of $375 million. The hospitality venture will be funded upon the purchase of the hotel, and our share of the purchase price commitment is 66.67% (or approximately $250 million). In accordance with the purchase agreement, we have agreed to fund a $50 million letter of credit as security towards this future purchase obligation. The agreement stipulates that the purchase of the completed property is contingent upon the completion of certain contractual milestones. The $50 million funded letter of credit is included as part of our total letters of credit outstanding at June 30, 2012, and therefore netted against our future commitments amount disclosed above. For further discussion, see the “Letters of Credit” section of this footnote below.

Our commitment to develop, own and operate a hotel property in the State of Hawaii through a joint venture formed in 2010. The expected remaining commitment under the joint venture agreement at June 30, 2012, is $81 million.
Certain of our hotel lease or management agreements contain performance tests that stipulate certain minimum levels of operating performance. These performance test clauses give us the option to fund any shortfall in profit performance. If we choose not to fund the shortfall, the hotel owner has the option to terminate the lease or management contract. As of June 30, 2012, there were no amounts recorded in accrued expenses and other current liabilities related to these performance test clauses.
Additionally, from time to time we may guarantee certain of our hotel owners certain levels of hotel profitability based on various metrics. We have management agreements where we are required to make payments based on specified thresholds and we have recorded $0 and a $2 million charge under one of these agreements in the three and six months ended June 30, 2012, respectively. Under a separate agreement, we had $2 million accrued as of June 30, 2012. The remaining maximum potential payments related to these agreements are $27 million.
We have entered into various loan, lease completion and repayment guarantees related to investments held in hotel operations. The maximum exposure under these agreements as of June 30, 2012, is $109 million. With respect to repayment guarantees related to two joint venture properties, the Company has agreements with its respective partners that require each partner to pay a pro-rata portion of the guarantee based on each partner’s ownership percentage. Assuming successful enforcement of these agreements with respect to these two joint ventures, our maximum exposure under all of the various agreements described above as of June 30, 2012, would be $81 million. As of June 30, 2012, the maximum exposure includes $25 million of a loan repayment agreement guarantee related to our contribution of our interest in Hyatt Regency Minneapolis to a newly formed joint venture (see Note 6).
Surety Bonds—Surety bonds issued on our behalf totaled $24 million at June 30, 2012, and primarily relate to workers’ compensation, taxes, licenses, and utilities related to our lodging operations.
Letters of Credit—Letters of credit outstanding on our behalf as of June 30, 2012, totaled $120 million, the majority of which relate to our ongoing operations. Of the $120 million letters of credit outstanding, $99 million reduces the available capacity under the revolving credit facility.
Capital Expenditures—As part of our ongoing business operations, significant 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 and/or the general partner(s) thereof.
In conjunction with financing obtained for our unconsolidated hospitality ventures, 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 joint venture owners.
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 current insurance programs, subject to deductibles. We recognize a liability associated with such commitments and contingencies when a loss is probable and reasonably estimable. Although the liability for these matters cannot be determined at this point, based on information currently available, we do not expect that the ultimate resolution of such claims and litigation will have a material effect on our condensed consolidated financial statements.
Equity
Equity
EQUITY
Stockholders’ Equity and Noncontrolling InterestsThe following table details the equity activity for the six months ended June 30, 2012 and 2011, respectively.
 
 
Stockholders’
equity
 
Noncontrolling interests
in consolidated
subsidiaries
 
Total equity
Balance at January 1, 2012
$
4,818

 
$
10

 
$
4,828

Net income (loss)
49

 

 
49

Other comprehensive income (loss)
(4
)
 

 
(4
)
Issuance of common stock shares to directors
1

 

 
1

Share based payment activity
9

 

 
9

Balance at June 30, 2012
$
4,873

 
$
10

 
$
4,883

 
 
 
 
 
 
Balance at January 1, 2011
$
5,118

 
$
13

 
$
5,131

Net income (loss)
47

 
(1
)
 
46

Other comprehensive income (loss)
40

 

 
40

Purchase of company stock
(396
)
 

 
(396
)
Issuance of common stock shares to directors
1

 

 
1

Share based payment activity
12

 

 
12

Balance at June 30, 2011
$
4,822

 
$
12

 
$
4,834


 
Accumulated Other Comprehensive Income (Loss)The following table details the accumulated other comprehensive income activity for the six months ended June 30, 2012 and 2011, respectively.

 
Balance at
January 1, 2012
 
Current period other comprehensive income (loss)
 
Balance at
June 30, 2012
Foreign currency translation adjustments
$
(64
)
 
$
(5
)
 
$
(69
)
Unrealized gain (loss) on AFS securities
(2
)
 
1

 
(1
)
Unrecognized pension cost
(6
)
 

 
(6
)
Unrealized gain (loss) on derivative instruments
(8
)
 

 
(8
)
Accumulated Other Comprehensive Income (Loss)
$
(80
)
 
$
(4
)
 
$
(84
)
 
 
 
 
 
 
 
Balance at
January 1, 2011
 
Current period other comprehensive income (loss)
 
Balance at
June 30, 2011
Foreign currency translation adjustments
$
(33
)
 
$
38

 
$
5

Unrealized gain (loss) on AFS securities

 

 

Unrecognized pension cost
(5
)
 

 
(5
)
Unrealized gain (loss) on derivative instruments

 
2

 
2

Accumulated Other Comprehensive Income (Loss)
$
(38
)
 
$
40

 
$
2


Share RepurchaseDuring the second quarter of 2011, we repurchased 8,987,695 shares of Class B common stock for $44.03 per share, the closing price of the Company’s Class A common stock on May 13, 2011, for an aggregate purchase price of approximately $396 million. The shares repurchased represented approximately 5.2% of the Company’s total shares of common stock outstanding prior to the repurchase. The shares of Class B common stock were repurchased from trusts for the benefit of certain Pritzker family members in privately-negotiated transactions and were retired, thereby reducing the total number of shares outstanding and reducing the shares of Class B common stock authorized and outstanding by the repurchased share amount.
Stock-Based Compensation
Stock-Based Compensation
STOCK-BASED COMPENSATION
As part of our long-term incentive plan, we award Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), Performance Share Units (“PSUs”), and Performance Vested Restricted Stock ("PSSs") to certain employees. Compensation expense and unearned compensation figures within this note exclude amounts related to employees of our managed hotels as this expense has been and will continue to be reimbursed by our third party hotel owners and is recorded on the lines other revenues from managed properties and other costs from managed properties. Compensation expense related to these awards for the three and six months ended June 30, 2012 and 2011 was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Stock appreciation rights
$
2

 
$
2

 
$
4

 
$
4

Restricted stock units
3

 
3

 
6

 
6

Performance share units and Performance vested restricted stock

 

 
1

 
1


Stock Appreciation Rights—Each vested SAR gives the holder the right to the difference between the value of one share of our Class A common stock at the exercise date and the value of one share of our Class A common stock at the grant date. Vested SARs can be exercised over their life as determined by the plan. All SARs have a 10-year contractual term and are settled in shares of our Class A common stock. The Company is accounting for these SARs as equity instruments.
During the six months ended June 30, 2012, the Company granted 405,877 SARs to employees with a weighted average grant date fair value of $17.29. The fair value of each SAR was estimated on the date of grant using the Black-Scholes-Merton option-valuation model.
Restricted Stock Units—The Company grants both RSUs that may be settled in stock and RSUs that may be settled in cash. Each vested stock-settled RSU will be settled with a single share of our Class A common stock. The value of the stock-settled RSUs was based on the closing stock price of our Class A common stock as of the grant date. We record compensation expense earned for RSUs on a straight-line basis from the date of grant. In certain situations we also grant cash-settled RSUs which are recorded as a liability instrument. The liability and related expense for cash-settled RSUs are insignificant as of, and for the three and six months ended June 30, 2012. During the six months ended June 30, 2012, the Company granted a total of 463,846 RSUs (an insignificant portion of which are cash-settled RSUs) to employees which, with respect to stock-settled RSUs, had a weighted average grant date fair value of $41.06.
Performance Share Units and Performance Vested Restricted Stock—The Company has granted to certain executive officers both PSUs, which are restricted stock units, and PSSs, which are performance vested restricted stock. The number of PSUs that will ultimately vest and be paid out in Class A common stock and the number of PSSs that will ultimately vest with no further restrictions on transfer depends upon the performance of the Company at the end of the applicable three year performance period relative to the applicable performance target. During the six months ended June 30, 2012, the Company granted to its executive officers a total of 209,569 PSSs, which vest in full if the maximum performance metric is achieved. At the end of the performance period, the PSSs that did not vest will be forfeited. The PSSs had a weighted average grant date fair value of $41.29. The performance period is three years beginning January 1, 2012 and ending December 31, 2014. The PSSs will vest at the end of the performance period only if the performance threshold is met; there is no interim performance metric.
Our total unearned compensation for our stock-based compensation programs as of June 30, 2012 was $17 million for SARs, $37 million for RSUs and $3 million for PSUs and PSSs, which will be recorded to compensation expense primarily over the next four years with respect to SARs and RSUs and over the next three years with respect to PSUs and PSSs. The amortization for certain RSU awards extends to nine years.
Related-Party Transactions
Related-Party Transactions
    RELATED-PARTY TRANSACTIONS
In addition to those included elsewhere in the notes to the condensed consolidated financial statements, related-party transactions entered into by us are summarized as follows:
Leases—Our corporate headquarters has been located at the Hyatt Center in Chicago, Illinois, since 2005. A subsidiary of the Company holds a master lease for a portion of the Hyatt Center and has entered into sublease agreements with certain related parties. During the first quarter of 2012, one of these sublease agreements was amended to reduce the related party's occupied space. As a result, we received a payment of $4 million, representing the discounted future sublease payments, less furniture and fixtures acquired as part of the amendment. During the second quarter of 2011, we agreed to a new sublease agreement with a related party which resulted in a $5 million loss on the transaction, which is recorded in other income (loss), net on the condensed consolidated statements of income. Future sublease income from sublease agreements with related parties under our master lease is $11 million.
Legal Services—A partner in a law firm that provided services to us throughout the six months ended June 30, 2012 and 2011 is the brother-in-law of our Executive Chairman. We incurred insignificant and $1 million in legal fees with this firm for the three months ended June 30, 2012 and 2011, respectively. We incurred legal fees with this firm of $1 million and $2 million for the six months ended June 30, 2012 and 2011, respectively. Legal fees, when expensed, are included in selling, general and administrative expenses. As of June 30, 2012, and December 31, 2011, we had insignificant amounts, respectively, due to the law firm.
Other Services—A member of our board of directors, who was appointed in 2009, is a partner in a firm whose affiliates own hotels from which we recorded management and franchise fees of $1 million and $1 million during the three months ended June 30, 2012 and 2011, respectively, and $3 million and $3 million during the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, and December 31, 2011, we had $1 million, respectively, due from these properties.
Equity Method Investments—We have equity method investments in entities that own properties for which we provide management and/or franchise services and receive fees. We recorded fees of $9 million and $10 million for the three months ended June 30, 2012 and 2011, respectively. We recorded fees of $19 million and $18 million for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, and December 31, 2011, we had receivables due from these properties of $13 million and $7 million, respectively. In addition, in some cases we provide loans or guarantees (see Note 11) to these entities. Our ownership interest in these equity method investments generally varies from 8 to 50 percent.
Share RepurchaseDuring the second quarter of 2011, we repurchased 8,987,695 shares of Class B common stock for $44.03 per share, the closing price of the Company’s Class A common stock on May 13, 2011, for an aggregate purchase price of approximately $396 million. The shares repurchased represented approximately 5.2% of the Company’s total shares of common stock outstanding prior to the repurchase. The shares of Class B common stock were repurchased from trusts for the benefit of certain Pritzker family members in privately-negotiated transactions and were retired, thereby reducing the total number of shares outstanding and reducing the shares of Class B common stock authorized and outstanding by the repurchased share amount.
Segment Information
Segment Information
SEGMENT INFORMATION
Our operating 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 to assess performance and make decisions regarding the allocation of resources. Our chief operating decision maker is the Chief Executive Officer. The Company announced on May 2, 2012, that it intends to realign its corporate and regional operations to enhance organizational effectiveness and adaptability. The organizational changes are expected to be completed by the fourth quarter of 2012. The Company's chief operating decision maker will continue to assess performance and make decisions regarding the allocation of resources on the basis of our historical operating segments until such time as the realignment is effective. Accordingly, we continue to define our reportable segments as follows:
Owned and Leased Hotels—This segment derives its earnings from owned and leased hotel properties located predominantly in North America but also from 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.
North American Management and Franchising—This segment derives its earnings from services provided, including hotel management and licensing of our family of brands to franchisees located in the U.S., Canada and the Caribbean. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin, and include in costs and expenses these reimbursed costs.
These costs relate primarily to payroll costs at managed properties where the Company is the employer. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.
International Management and Franchising—This segment derives its earnings from services provided, including hotel management and licensing of our family of brands to franchisees located in countries outside of the U.S., Canada and the Caribbean. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin, and include in costs and expenses these reimbursed costs. These costs relate primarily to reservations, marketing and IT costs. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.
Our chief operating decision maker evaluates performance based on each segment’s Adjusted EBITDA. We define Adjusted EBITDA as net income attributable to Hyatt Hotels Corporation plus our pro-rata share of unconsolidated hospitality ventures' Adjusted EBITDA before equity earnings (losses) from unconsolidated hospitality ventures; asset impairments; other income (loss), net; net loss attributable to noncontrolling interests; depreciation and amortization; interest expense; and (provision) benefit for income taxes.
The table below shows summarized consolidated financial information by segment. Included within Corporate and other are unallocated corporate expenses, revenues and expenses on our vacation ownership properties, and the results of our co-branded credit card.
 
(in millions)
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
North American Management and Franchising
 
 
 
 
 
 
 
Revenues
$
433

 
$
397

 
$
864

 
$
789

Intersegment Revenues (a)
22

 
15

 
40

 
29

Adjusted EBITDA
54

 
44

 
100

 
84

Depreciation and Amortization
5

 
3

 
9

 
6

International Management and Franchising
 
 
 
 
 
 
 
Revenues
55

 
54

 
110

 
105

Intersegment Revenues (a)
4

 
5

 
8

 
9

Adjusted EBITDA
24

 
22

 
44

 
42

Depreciation and Amortization
1

 
1

 
1

 
1

Owned and Leased Hotels (b)
 
 
 
 
 
 
 
Revenues
528

 
484

 
1,001

 
916

Adjusted EBITDA
132

 
114

 
225

 
189

Depreciation and Amortization
81

 
66

 
161

 
132

Corporate and other
 
 
 
 
 
 
 
Revenues
24

 
21

 
45

 
39

Adjusted EBITDA
(30
)
 
(29
)
 
(64
)
 
(55
)
Depreciation and Amortization
2

 
2

 
4

 
4

Eliminations (a)
 
 
 
 
 
 
 
Revenues
(26
)
 
(20
)
 
(48
)
 
(38
)
Adjusted EBITDA

 

 

 

Depreciation and Amortization

 

 

 

TOTAL
 
 
 
 
 
 
 
Revenues
$
1,014

 
$
936

 
$
1,972

 
$
1,811

Adjusted EBITDA
180

 
151

 
305

 
260

Depreciation and Amortization
89

 
72

 
175

 
143

 
(a)
Intersegment revenues are included in the segment revenue totals and eliminated in Eliminations.
(b)
Assets within the Owned and Leased segment at June 30, 2012, equaled $5,012 million compared to $4,825 million at December 31, 2011. The increase in assets is primarily due to the acquisition of a company that owned a full service hotel in Mexico City, Mexico which we rebranded as the Hyatt Regency Mexico City. Refer to Note 6 for further details.
The table below provides a reconciliation of our consolidated Adjusted EBITDA to EBITDA and a reconciliation of EBITDA to net income attributable to Hyatt Hotels Corporation for the three and six months ended June 30, 2012 and 2011.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Adjusted EBITDA
$
180

 
$
151

 
$
305

 
$
260

Equity earnings (losses) from unconsolidated hospitality ventures

 
2

 
(1
)
 
5

Asset impairments

 
(1
)
 

 
(1
)
Other income (loss), net
5

 
(9
)
 
17

 
(6
)
Net loss attributable to noncontrolling interests

 
1

 

 
1

Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
(22
)
 
(22
)
 
(40
)
 
(37
)
EBITDA
163

 
122

 
281

 
222

Depreciation and amortization
(89
)
 
(72
)
 
(175
)
 
(143
)
Interest expense
(17
)
 
(14
)
 
(35
)
 
(27
)
(Provision) benefit for income taxes
(18
)
 
1

 
(22
)
 
(5
)
Net income attributable to Hyatt Hotels Corporation
$
39

 
$
37

 
$
49

 
$
47

Earnings Per Share
Earnings Per Share
EARNINGS PER SHARE
The calculation of basic and diluted earnings per share, including a reconciliation of the numerator and denominator, are as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Numerator:
 
 
 
 
 
 
 
Net income
$
39

 
$
36

 
$
49

 
$
46

Net loss attributable to noncontrolling interests

 
1

 

 
1

Net income attributable to Hyatt Hotels Corporation
$
39

 
$
37

 
$
49

 
$
47

Denominator:
 
 
 
 
 
 
 
Basic weighted average shares outstanding:
165,854,130

 
169,907,013

 
165,737,068

 
172,056,525

Share-based compensation
116,442

 
231,715

 
265,757

 
272,713

Diluted weighted average shares outstanding
165,970,572

 
170,138,728

 
166,002,825

 
172,329,238

Basic Earnings Per Share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.21

 
$
0.30

 
$
0.27

Net loss attributable to noncontrolling interests

 
0.01

 

 
0.01

Net income attributable to Hyatt Hotels Corporation
$
0.24

 
$
0.22

 
$
0.30

 
$
0.28

Diluted Earnings Per Share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.21

 
$
0.30

 
$
0.27

Net loss attributable to noncontrolling interests

 
0.01

 

 
0.01

Net income attributable to Hyatt Hotels Corporation
$
0.24

 
$
0.22

 
$
0.30

 
$
0.28


The computations of diluted net income per share for the three and six months ended June 30, 2012 and 2011 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 June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Stock-settled SARs
37,400

 
273,320

 
32,100

 
150,400

RSUs
27,300

 
49,000

 
16,300

 
4,440

Other Income (Loss), Net
Other Income (Loss), Net
OTHER INCOME (LOSS), NET
Other income (loss), net includes interest income, gains (losses) on other marketable securities, foreign currency losses, including gains (losses) on foreign currency exchange rate instruments (see Note 8), loss on sale of real estate, costs incurred as part of our Company's realignment (which include employee separation costs, consulting fees, and legal fees), and transaction costs incurred to acquire the Hyatt Regency Mexico City (see Note 6). The table below provides a reconciliation of the components in other income (loss), net for the three and six months ended June 30, 2012 and 2011, respectively:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Interest income
$
6

 
$
6

 
$
11

 
$
11

Gains (losses) on other marketable securities
9

 
(6
)
 
17

 
(7
)
Foreign currency losses
(2
)
 
(3
)
 
(2
)
 
(4
)
Loss on sale of real estate

 
(2
)
 

 
(2
)
Realignment costs
(7
)
 

 
(7
)
 

Transaction costs
(1
)
 

 
(1
)
 

Other

 
(4
)
 
(1
)
 
(4
)
Other income (loss), net
$
5

 
$
(9
)
 
$
17

 
$
(6
)
Significant Accounting Policies (Policies)
Our derivative instruments are foreign currency exchange rate instruments and interest rate swaps. The instruments are valued using an income approach with factors such as interest rates and yield curves, which represent market observable inputs and are generally classified as Level Two. Credit valuation adjustments may be made to ensure that derivatives are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality and our nonperformance risk. As of June 30, 2012 and December 31, 2011, the credit valuation adjustments were insignificant. See Note 8 for further details on our derivative instruments.
We estimated the fair value of financing receivables using discounted cash flow analysis based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified our financing receivables as Level Three. The primary sensitivity in these calculations is based on the selection of appropriate interest and discount rates. Fluctuations in these assumptions will result in different estimates of fair value. For further information on financing receivables see Note 5.
We estimated the fair value of debt, excluding capital leases, which consists of our Senior Notes. Our Senior Notes are classified as Level Two due to the use and weighting of multiple market inputs in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities.
Our portfolio of marketable securities consists of various types of U.S. Treasury securities, mutual funds, common stock, and fixed income securities, including government agencies, municipal, provincial and corporate bonds. The fair value of our mutual funds and certain equity securities were classified as Level One as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. The remaining securities, except for certain mortgage-backed securities at December 31, 2011, were classified as Level Two due to the use and weighting of multiple market inputs being considered in the final price of the security. Market inputs include quoted market prices from active markets for identical securities, quoted market prices for identical securities in inactive markets, and quoted market prices in active and inactive markets for similar securities.
We invest a portion of our cash balance into short-term interest bearing money market funds that have a maturity of less than ninety days. Consequently, the balances are recorded in cash and cash equivalents. The funds are held with open-ended registered investment companies and the fair value of the funds is classified as Level One as we are able to obtain market available pricing information on an ongoing basis.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). GAAP establishes a valuation hierarchy for prioritizing the inputs and the hierarchy places greater emphasis on the use of observable market inputs and less emphasis on unobservable inputs. When determining fair value, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the hierarchy are as follows:
Level One—Fair values based on unadjusted quoted prices in active markets for identical assets and liabilities;
Level Two—Fair values based on quoted market prices for similar assets and liabilities in active markets, quoted prices in inactive markets for identical assets and liabilities, and inputs other than quoted market prices that are observable for the asset or liability;
Level Three—Fair values based on inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Valuation techniques could include the use of discounted cash flow models and similar techniques.
We have various financial instruments that are measured at fair value including certain marketable securities and derivative instruments. We currently do not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis.
We utilize the market approach and income approach for valuing our financial instruments. The market approach utilizes prices and information generated by market transactions involving identical or similar assets and liabilities and the income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). For instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy.
On an ongoing basis, we monitor the credit quality of our financing receivables based on payment activity. We categorize our financing receivables as follows:
Past-due Receivables—We determine financing receivables to be past-due based on the contractual terms of each individual financing receivable agreement.
Non-Performing Receivables—Receivables are determined to be non-performing based upon the following criteria: (1) if interest or principal is greater than 90 days past due for secured financing to hotel owners and unsecured financing to hotel owners; (2) 120 days past due for vacation ownership mortgage receivables; (3) if an impairment charge has been recorded for a loan or a provision established for our other financing arrangements. For the three and six months ended June 30, 2012 and 2011, no interest income was accrued for secured financing to hotel owners and unsecured financing to hotel owners greater than 90 days past due and for vacation ownership receivables greater than 120 days past due. For the three and six months ended June 30, 2012 and 2011, insignificant interest income was accrued for vacation ownership receivables greater than 90 days and less than 120 days.
If a financing receivable is non-performing, we place the financing receivable on non-accrual status. We only recognize interest income when received for financing receivables on non-accrual status. Accrual of interest income is resumed when the receivable becomes contractually current and collection doubts are removed.
We have divided our financing receivables, which includes loans and other financing arrangements, into three portfolio segments based on their initial measurement, risk characteristics and our method for monitoring or assessing credit risk.
We individually assess all loans in the secured financing to hotel owners portfolio and in the unsecured financing to hotel owners portfolio for impairment. We assess the vacation ownership mortgage receivables portfolio, which consists entirely of loans, for impairment on an aggregate basis. We do not assess, for impairment, our other financing arrangements included in unsecured financing to hotel owners. However, we do regularly evaluate our reserves for these other financing arrangements and record provisions in the financing receivables allowance as necessary. Impairment charges for loans within all three portfolios and reserves related to our other financing arrangements are recorded as provisions in the financing receivables allowance. We consider the provisions on all of our portfolio segments to be adequate based on the economic environment and our assessment of the future collectability of the outstanding loans.
We routinely evaluate loans within financing receivables for impairment. To determine whether an impairment has occurred, we evaluate the collectability of both interest and principal. A loan is considered to be impaired when the Company determines that it is probable that we will not be able to collect all amounts due under the contractual terms. We do not record interest income for impaired loans unless cash is received, in which case the payment is recorded to other income (loss), net in the accompanying condensed consolidated statements of income. During the three and six months ended June 30, 2012, we recorded impairment charges of $2 million and $3 million, respectively, for loans.
It is our policy that derivative transactions are executed only to manage exposures arising in the normal course of business and not for the purpose of creating speculative positions or trading. As a result of the use of derivative instruments, we are exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we have a policy of only entering into contracts with carefully selected major financial institutions based upon their credit rating and other factors. Our derivative instruments do not contain credit-risk related contingent features.
All derivatives are recognized on the balance sheet at fair value. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in accumulated other comprehensive loss on the balance sheet until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk are recorded in current earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged on the statement of cash flows. Cash flows from undesignated derivative financial instruments are included in the investing category on the statement of cash flows.
We review the carrying value of all our goodwill by comparing the carrying value of our reporting units to their fair values in a two-step process. We define a reporting unit at the individual property or business level. We are required to perform this comparison at least annually or more frequently if circumstances indicate that a possible impairment exists. When determining fair value in step one, we utilize internally developed discounted future cash flow models, third party appraisals and, if appropriate, current estimated net sales proceeds from pending offers. We then compare the estimated fair value to our carrying value. If the carrying value is in excess of the fair value, we must determine our implied fair value of goodwill to measure if any impairment charge is necessary.
Defined Benefit Plan—We sponsor a frozen unfunded supplemental defined benefit executive retirement plan for certain former executives.
Defined Contribution Plans—We provide retirement benefits to certain qualified employees under the Retirement Savings Plan (a qualified plan under Internal Revenue Code Section 401(k)), the Field Retirement Plan (a nonqualified plan), and other similar plans. We record expenses related to the Retirement Savings Plan based on a percentage of qualified employee contributions on stipulated amounts; a substantial portion of these contributions are included in the other revenues from managed properties and other costs from managed properties lines in the condensed consolidated statements of income as the costs of these programs are largely related to employees located at lodging properties managed by us and are therefore paid for by the property owners.
Deferred Compensation Plan—We provide a deferred compensation plan in which contributions and investment elections are determined by the employees. The Company also provides contributions according to preapproved formulas. A portion of these contributions relate to hotel property level employees, which are reimbursable to us and are included in the other revenues from managed properties and other costs from managed properties lines in the condensed consolidated statements of income. As of June 30, 2012 and December 31, 2011, the plan is fully funded in a rabbi trust. The assets of the plan are primarily invested in mutual funds, which are recorded in other assets in the condensed consolidated balance sheets. The related deferred compensation liability is recorded in other long-term liabilities.
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 and/or the general partner(s) thereof.
In conjunction with financing obtained for our unconsolidated hospitality ventures, 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 joint venture owners.
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 current insurance programs, subject to deductibles. We recognize a liability associated with such commitments and contingencies when a loss is probable and reasonably estimable. Although the liability for these matters cannot be determined at this point, based on information currently available, we do not expect that the ultimate resolution of such claims and litigation will have a material effect on our condensed consolidated financial statements.
Our operating 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 to assess performance and make decisions regarding the allocation of resources. Our chief operating decision maker is the Chief Executive Officer. The Company announced on May 2, 2012, that it intends to realign its corporate and regional operations to enhance organizational effectiveness and adaptability. The organizational changes are expected to be completed by the fourth quarter of 2012. The Company's chief operating decision maker will continue to assess performance and make decisions regarding the allocation of resources on the basis of our historical operating segments until such time as the realignment is effective. Accordingly, we continue to define our reportable segments as follows:
Owned and Leased Hotels—This segment derives its earnings from owned and leased hotel properties located predominantly in North America but also from 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.
North American Management and Franchising—This segment derives its earnings from services provided, including hotel management and licensing of our family of brands to franchisees located in the U.S., Canada and the Caribbean. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin, and include in costs and expenses these reimbursed costs.
These costs relate primarily to payroll costs at managed properties where the Company is the employer. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.
International Management and Franchising—This segment derives its earnings from services provided, including hotel management and licensing of our family of brands to franchisees located in countries outside of the U.S., Canada and the Caribbean. This segment’s revenues also include the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin, and include in costs and expenses these reimbursed costs. These costs relate primarily to reservations, marketing and IT costs. These revenues and costs are recorded on the lines other revenues from managed properties and other costs from managed properties, respectively. The intersegment revenues relate to management fees that are collected from the Company’s owned hotels, which are eliminated in consolidation.
Our chief operating decision maker evaluates performance based on each segment’s Adjusted EBITDA. We define Adjusted EBITDA as net income attributable to Hyatt Hotels Corporation plus our pro-rata share of unconsolidated hospitality ventures' Adjusted EBITDA before equity earnings (losses) from unconsolidated hospitality ventures; asset impairments; other income (loss), net; net loss attributable to noncontrolling interests; depreciation and amortization; interest expense; and (provision) benefit for income taxes.
Equity And Cost Method Investments (Tables)
Our equity and cost method investment balances recorded at June 30, 2012 and December 31, 2011 are as follows:
 
 
June 30, 2012
 
December 31, 2011
Equity method investments
$
244

 
$
207

Cost method investments
73

 
73

Total investments
$
317

 
$
280

The following table presents summarized financial information for all unconsolidated ventures in which we hold an investment that is accounted for under the equity method.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Total revenues
$
251

 
$
229

 
$
494

 
$
468

Gross operating profit
82

 
71

 
153

 
147

Income from continuing operations
5

 
12

 
3

 
23

Net income
5

 
12

 
3

 
23

Fair Value Measurement (Tables)
As of June 30, 2012 and December 31, 2011, we had the following financial assets and liabilities measured at fair value on a recurring basis:
 
 
June 30, 2012
 
Quoted Prices in
Active Markets for
Identical Assets
(Level One)
 
Significant Other
Observable Inputs
(Level Two)
 
Significant
Unobservable Inputs
(Level Three)
Marketable securities included in
short-term investments, prepaids and
other assets and other assets
 
 
 
 
 
 
 
Mutual funds
$
259

 
$
259

 
$

 
$

Equity securities
28

 
28

 

 

U.S. government obligations
105

 

 
105

 

U.S. government agencies
99

 

 
99

 

Corporate debt securities
479

 

 
479

 

Mortgage-backed securities
20

 

 
20

 

Asset-backed securities
8

 

 
8

 

Municipal and provincial notes and bonds
14

 

 
14

 

Marketable securities recorded in
cash and cash equivalents
 
 
 
 
 
 
 
Interest bearing money market funds
103

 
103

 

 

Derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
6

 

 
6

 

Foreign currency forward contracts
(1
)
 

 
(1
)
 


 
December 31, 2011
 
Quoted Prices in
Active Markets for
Identical Assets
(Level One)
 
Significant Other
Observable Inputs
(Level Two)
 
Significant
Unobservable Inputs
(Level Three)
Marketable securities included in short-term investments, prepaids and other assets and other assets
 
 
 
 
 
 
 
Mutual funds
$
242

 
$
242

 
$

 
$

Equity securities
35

 
35

 

 

U.S. government obligations
102

 

 
102

 

U.S. government agencies
132

 

 
132

 

Corporate debt securities
487

 

 
487

 

Mortgage-backed securities
23

 

 
21

 
2

Asset-backed securities
7

 

 
7

 

Municipal and provincial notes and bonds
14

 

 
14

 

Marketable securities recorded in cash and cash equivalents
 
 
 
 
 
 
 
Interest bearing money market funds
60

 
60

 

 

Derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
7

 

 
7

 

Foreign currency forward contracts
(1
)
 

 
(1
)
 

Included in our portfolio of marketable securities are investments in debt and equity securities classified as available for sale. At June 30, 2012 and December 31, 2011 these were as follows:
 
 
June 30, 2012
 
Cost or Amortized
Cost
 
Gross Unrealized
Gain
 
Gross Unrealized
Loss
 
Fair Value
Corporate debt securities
$
383

 
$
6

 
$
(6
)
 
$
383

U.S. government agencies and municipalities
61

 

 

 
61

Equity securities
9

 

 
(1
)
 
8

Total
$
453

 
$
6

 
$
(7
)
 
$
452

 
 
December 31, 2011
 
Cost or Amortized
Cost
 
Gross Unrealized
Gain
 
Gross Unrealized
Loss
 
Fair Value
Corporate debt securities
$
406

 
$
5

 
$
(5
)
 
$
406

U.S. government agencies and municipalities
93

 

 

 
93

Equity securities
9

 

 
(2
)
 
7

Total
$
508

 
$
5

 
$
(7
)
 
$
506

The table below summarizes available for sale fixed maturity securities by contractual maturity at June 30, 2012. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid with or without call or prepayment penalties. Securities not due at a single date are allocated based on weighted average life. Although a portion of our available for sale fixed maturity securities mature after one year, we have chosen to classify the entire portfolio as current. The portfolio’s objectives are to preserve capital, provide liquidity to satisfy operating requirements, working capital purposes and strategic initiatives and capture a market rate of return. Therefore, since these securities represent funds available for current operations, the entire investment portfolio is classified as current assets.
 
 
June 30, 2012
Contractual Maturity
Cost or Amortized
Cost
 
Fair Value
Due in one year or less
$
269

 
$
269

Due in one to two years
175

 
175

Total
$
444

 
$
444

The following table provides a reconciliation of the beginning and ending balances for the mortgage backed securities measured at fair value using significant unobservable inputs (Level 3):
 
Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3) - Mortgage Backed Securities
 
2012
 
2011
Balance at January 1,
$
2

 
$
2

Transfers into (out of) Level Three

 

Settlements
(2
)
 

Total gains (losses) (realized or unrealized)

 

Balance at March 31,
$

 
$
2

Transfers into (out of) Level Three

 

Settlements

 

Total gains (losses) (realized or unrealized)

 

Balance at June 30,
$

 
$
2

The carrying amounts and fair values of our other financial instruments are as follows:

 
Asset (Liability)
 
June 30, 2012
 
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)
Financing receivables
 
 
 
 
 
 
 
 
 
Secured financing to hotel owners
$
312

 
$
311

 
$

 
$

 
$
311

Vacation ownership mortgage receivable
41

 
42

 

 

 
42

Unsecured financing to hotel owners
68

 
68

 

 

 
68

Debt, excluding capital lease obligations
(1,008
)
 
(1,122
)
 

 
(1,122
)
 


 
Asset (Liability)
 
December 31, 2011
 
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)
Financing receivables
 
 
 
 
 
 
 
 
 
Secured financing to hotel owners
$
312

 
$
311

 
$

 
$

 
$
311

Vacation ownership mortgage receivable
42

 
42

 

 

 
42

Unsecured financing to hotel owners
16

 
15

 

 

 
15

Debt, excluding capital lease obligations
(1,008
)
 
(1,059
)
 

 
(1,059
)
 

Financing Receivables (Tables)
The three portfolio segments of financing receivables and their balances at June 30, 2012 and December 31, 2011 are as follows:
 
 
June 30, 2012
 
December 31, 2011
Secured financing to hotel owners
$
319

 
$
319

Vacation ownership mortgage receivables at various interest rates with varying payments through 2022
49

 
50

Unsecured financing to hotel owners
144

 
91

 
512

 
460

Less allowance for losses
(91
)
 
(90
)
Less current portion included in receivables, net
(11
)
 
(10
)
Total long-term financing receivables
$
410

 
$
360

Financing receivables held by us as of June 30, 2012 are scheduled to mature as follows: 
Year Ending December 31,
Secured Financing to Hotel Owners
 
Vacation Ownership Mortgage Receivables
2012
$
1

 
$
3

2013
278

 
7

2014

 
8

2015
40

 
8

2016

 
7

2017

 
5

Thereafter

 
11

Total
319

 
49

Less allowance
(7
)
 
(8
)
Net financing receivables
$
312

 
$
41

The following tables summarize the activity in our financing receivables allowance for the three and six months ended June 30, 2012 and 2011:
 
Secured Financing
 
Vacation Ownership
 
Unsecured Financing
 
Total
Allowance at January 1, 2012
$
7

 
$
8

 
$
75

 
$
90

  Provisions

 
1

 
3

 
4

  Write-offs

 
(1
)
 
(3
)
 
(4
)
  Recoveries

 

 

 

Allowance at March 31, 2012
$
7

 
$
8

 
$
75

 
$
90

  Provisions

 
2

 
3

 
5

  Write-offs

 
(2
)
 

 
(2
)
  Recoveries

 

 
(2
)
 
(2
)
Allowance at June 30, 2012
$
7

 
$
8

 
$
76

 
$
91


 
Secured Financing
 
Vacation Ownership
 
Unsecured Financing
 
Total
Allowance at January 1, 2011
$
4

 
$
10

 
$
68

 
$
82

  Provisions

 
1

 
1

 
2

  Other Adjustments

 

 
1

 
1

  Write-offs
(1
)
 
(1
)
 

 
(2
)
  Recoveries

 

 

 

Allowance at March 31, 2011
$
3

 
$
10

 
$
70

 
$
83

  Provisions

 

 
2

 
2

  Other Adjustments

 

 

 

  Write-offs

 
(1
)
 

 
(1
)
  Recoveries

 

 

 

Allowance at June 30, 2011
$
3

 
$
9

 
$
72

 
$
84

An analysis of our loans included in secured financing to hotel owners and unsecured financing to hotel owners had the following impaired amounts at June 30, 2012 and December 31, 2011, all of which had a related allowance recorded against them:
Impaired Loans
June 30, 2012
 
Gross Loan Balance (Principal and Interest)
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Loan Balance
Secured financing to hotel owners
$
40

 
$
40

 
$
(7
)
 
$
40

Unsecured financing to hotel owners
51

 
46

 
(47
)
 
50


Impaired Loans
December 31, 2011
 
Gross Loan Balance (Principal and Interest)
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Loan Balance
Secured financing to hotel owners
$
41

 
$
40

 
$
(7
)
 
$
40

Unsecured financing to hotel owners
51

 
46

 
(46
)
 
51

Interest income recognized on these impaired loans within other income (loss), net on our condensed consolidated statements of income for the three and six months ended June 30, 2012 and 2011 was as follows:
Interest Income
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Secured financing to hotel owners
$

 
$

 
$
1

 
$
1

Unsecured financing to hotel owners

 

 

 

The following tables summarize our aged analysis of past-due financing receivables by portfolio segment, the gross balance of financing receivables greater than 90 days past-due and the gross balance of financing receivables on non-accrual status as of June 30, 2012 and December 31, 2011:
 
Analysis of Financing Receivables
June 30, 2012
 
Receivables
Past Due
 
Greater than 90 Days Past Due
 
Receivables on
Non-Accrual
Status
Secured financing to hotel owners
$

 
$

 
$
41

Vacation ownership mortgage receivables
2

 

 

Unsecured financing to hotel owners *
3

 
3

 
77

Total
$
5

 
$
3

 
$
118


Analysis of Financing Receivables
December 31, 2011
 
Receivables
Past Due
 
Greater than 90 Days Past Due
 
Receivables on
Non-Accrual
Status
Secured financing to hotel owners
$

 
$

 
$
41

Vacation ownership mortgage receivables
3

 

 

Unsecured financing to hotel owners *
6

 
6

 
76

Total
$
9

 
$
6

 
$
117

Acquisitions, Dispositions, And Discontinued Operations (Tables)
The following table summarizes the preliminary estimated fair value of the identifiable assets acquired and liabilities assumed in our owned and leased hotels segment for the acquisition (in millions):
Cash and cash equivalents
$
11

Other current assets
3

Land, property, and equipment
190

Intangibles
12

Total assets
216

Current liabilities
3

Other long-term liabilities
42

Total liabilities
45

     Total net assets acquired
$
171

The following table presents the results of this property since the acquisition date on a stand-alone basis:
 
Hyatt Regency Mexico City's operations included in 2012 results
Revenues
$
5

Income from continuing operations
1

The following table presents our revenues and income from continuing operations on a pro forma basis as if we had completed the acquisition and rebranding of the Hyatt Regency Mexico City as of January 1, 2011:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Pro forma revenues
$
1,020

 
$
948

 
$
1,990

 
$
1,833

Pro forma income from continuing operations
41

 
39

 
53

 
48

Goodwill And Intangible Assets (Tables)
The following is a summary of intangible assets at June 30, 2012 and December 31, 2011:
 
 
June 30, 2012
 
Weighted
Average Useful
Lives (in years)
 
December 31, 2011
Contract acquisition costs
$
181

 
23
 
$
167

Acquired lease rights
135

 
112
 
133

Franchise and management intangibles
125

 
25
 
115

Other
9

 
10
 
7

 
450

 
 
 
422

Accumulated amortization
(74
)
 
 
 
(63
)
Intangibles, net
$
376

 
 
 
$
359

Amortization expense relating to intangible assets was as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization expense
$
7

 
$
5

 
$
12

 
$
8

Derivative Instruments (Tables)
The U.S. dollar equivalent of the notional amount of the outstanding forward contracts, the majority of which relate to intercompany loans, with terms of less than one year, is as follows (in U.S. dollars):
 
June 30, 2012
 
December 31, 2011
Pound Sterling
$
152

 
$
126

Swiss Franc
46

 
59

Korean Won
33

 
33

Canadian Dollar
27

 
27

Total notional amount of forward contracts
$
258

 
$
245

The effects of derivative instruments on our condensed consolidated financial statements were as follows as of June 30, 2012December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011:
Fair Values of Derivative Instruments
 
Asset Derivatives
 
Liability Derivatives
 
Balance Sheet
Location
 
June 30,
2012
 
December 31,
2011
 
Balance Sheet Location
 
June 30,
2012
 
December 31,
2011
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
Other assets
 
$
6

 
$
7

 
Other long-term
liabilities
 
$

 
$

Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
Prepaids and
other assets
 

 

 
Accrued expenses and
other current liabilities
 
1

 
1

Total derivatives
 
 
$
6

 
$
7

 
 
 
$
1

 
$
1

Effect of Derivative Instruments on Income
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
 
2012
 
2011
 
2012
 
2011
Fair value hedges:
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
 
 
 
 
 
 
 
 
Gains (losses) on derivatives
Other income (loss), net*
 
$
1

 
$
2

 
$
1

 
$
1

Gains (losses) on borrowings
Other income (loss), net*
 
(1
)
 
(2
)
 
(1
)
 
(1
)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
 
2012
 
2011
 
2012
 
2011
Cash flow hedges:
 
 
 
 
 
 
 
 
 
Interest rate locks
 
 
 
 
 
 
 
 
 
Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivative (effective portion)
Accumulated other comprehensive loss
 
$

 
$
4

 
$

 
$
4

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion)
Interest expense
 

 

 

 

Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Other income (loss), net**
 

 

 

 

 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location of
Gain (Loss)
2012
 
2011
 
2012
 
2011
Derivatives not designated as hedges:
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
Other income (loss), net
 
$
4

 
$
(6
)
 
$
(2
)
 
$
(8
)
 
*
For the three and six months ended June 30, 2012 and 2011, there was an insignificant loss recognized in income related to the ineffective portion of these hedges. No amounts were excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2012 and 2011.

**
For the three and six months ended June 30, 2011, there was an insignificant gain recognized in income related to the ineffective portion of these hedges. No incremental amounts were excluded from the assessment of hedge effectiveness for the three and six months ended June 30, 2011.
Employee Benefit Plans (Tables)
Schedule Of Costs Incurred For Employee Benefit Plans

Equity (Tables)
Stockholders’ Equity and Noncontrolling InterestsThe following table details the equity activity for the six months ended June 30, 2012 and 2011, respectively.
 
 
Stockholders’
equity
 
Noncontrolling interests
in consolidated
subsidiaries
 
Total equity
Balance at January 1, 2012
$
4,818

 
$
10

 
$
4,828

Net income (loss)
49

 

 
49

Other comprehensive income (loss)
(4
)
 

 
(4
)
Issuance of common stock shares to directors
1

 

 
1

Share based payment activity
9

 

 
9

Balance at June 30, 2012
$
4,873

 
$
10

 
$
4,883

 
 
 
 
 
 
Balance at January 1, 2011
$
5,118

 
$
13

 
$
5,131

Net income (loss)
47

 
(1
)
 
46

Other comprehensive income (loss)
40

 

 
40

Purchase of company stock
(396
)
 

 
(396
)
Issuance of common stock shares to directors
1

 

 
1

Share based payment activity
12

 

 
12

Balance at June 30, 2011
$
4,822

 
$
12

 
$
4,834

Accumulated Other Comprehensive Income (Loss)The following table details the accumulated other comprehensive income activity for the six months ended June 30, 2012 and 2011, respectively.

 
Balance at
January 1, 2012
 
Current period other comprehensive income (loss)
 
Balance at
June 30, 2012
Foreign currency translation adjustments
$
(64
)
 
$
(5
)
 
$
(69
)
Unrealized gain (loss) on AFS securities
(2
)
 
1

 
(1
)
Unrecognized pension cost
(6
)
 

 
(6
)
Unrealized gain (loss) on derivative instruments
(8
)
 

 
(8
)
Accumulated Other Comprehensive Income (Loss)
$
(80
)
 
$
(4
)
 
$
(84
)
 
 
 
 
 
 
 
Balance at
January 1, 2011
 
Current period other comprehensive income (loss)
 
Balance at
June 30, 2011
Foreign currency translation adjustments
$
(33
)
 
$
38

 
$
5

Unrealized gain (loss) on AFS securities

 

 

Unrecognized pension cost
(5
)
 

 
(5
)
Unrealized gain (loss) on derivative instruments

 
2

 
2

Accumulated Other Comprehensive Income (Loss)
$
(38
)
 
$
40

 
$
2


Stock-Based Compensation (Tables)
Compensation Expense Related To Long-Term Incentive Plan
Compensation expense related to these awards for the three and six months ended June 30, 2012 and 2011 was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Stock appreciation rights
$
2

 
$
2

 
$
4

 
$
4

Restricted stock units
3

 
3

 
6

 
6

Performance share units and Performance vested restricted stock

 

 
1

 
1

Segment Information (Tables)
The table below shows summarized consolidated financial information by segment. Included within Corporate and other are unallocated corporate expenses, revenues and expenses on our vacation ownership properties, and the results of our co-branded credit card.
 
(in millions)
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
North American Management and Franchising
 
 
 
 
 
 
 
Revenues
$
433

 
$
397

 
$
864

 
$
789

Intersegment Revenues (a)
22

 
15

 
40

 
29

Adjusted EBITDA
54

 
44

 
100

 
84

Depreciation and Amortization
5

 
3

 
9

 
6

International Management and Franchising
 
 
 
 
 
 
 
Revenues
55

 
54

 
110

 
105

Intersegment Revenues (a)
4

 
5

 
8

 
9

Adjusted EBITDA
24

 
22

 
44

 
42

Depreciation and Amortization
1

 
1

 
1

 
1

Owned and Leased Hotels (b)
 
 
 
 
 
 
 
Revenues
528

 
484

 
1,001

 
916

Adjusted EBITDA
132

 
114

 
225

 
189

Depreciation and Amortization
81

 
66

 
161

 
132

Corporate and other
 
 
 
 
 
 
 
Revenues
24

 
21

 
45

 
39

Adjusted EBITDA
(30
)
 
(29
)
 
(64
)
 
(55
)
Depreciation and Amortization
2

 
2

 
4

 
4

Eliminations (a)
 
 
 
 
 
 
 
Revenues
(26
)
 
(20
)
 
(48
)
 
(38
)
Adjusted EBITDA

 

 

 

Depreciation and Amortization

 

 

 

TOTAL
 
 
 
 
 
 
 
Revenues
$
1,014

 
$
936

 
$
1,972

 
$
1,811

Adjusted EBITDA
180

 
151

 
305

 
260

Depreciation and Amortization
89

 
72

 
175

 
143

 
(a)
Intersegment revenues are included in the segment revenue totals and eliminated in Eliminations.
(b)
Assets within the Owned and Leased segment at June 30, 2012, equaled $5,012 million compared to $4,825 million at December 31, 2011. The increase in assets is primarily due to the acquisition of a company that owned a full service hotel in Mexico City, Mexico which we rebranded as the Hyatt Regency Mexico City. Refer to Note 6 for further details.
The table below provides a reconciliation of our consolidated Adjusted EBITDA to EBITDA and a reconciliation of EBITDA to net income attributable to Hyatt Hotels Corporation for the three and six months ended June 30, 2012 and 2011.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Adjusted EBITDA
$
180

 
$
151

 
$
305

 
$
260

Equity earnings (losses) from unconsolidated hospitality ventures

 
2

 
(1
)
 
5

Asset impairments

 
(1
)
 

 
(1
)
Other income (loss), net
5

 
(9
)
 
17

 
(6
)
Net loss attributable to noncontrolling interests

 
1

 

 
1

Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
(22
)
 
(22
)
 
(40
)
 
(37
)
EBITDA
163

 
122

 
281

 
222

Depreciation and amortization
(89
)
 
(72
)
 
(175
)
 
(143
)
Interest expense
(17
)
 
(14
)
 
(35
)
 
(27
)
(Provision) benefit for income taxes
(18
)
 
1

 
(22
)
 
(5
)
Net income attributable to Hyatt Hotels Corporation
$
39

 
$
37

 
$
49

 
$
47

Earnings Per Share (Tables)
The calculation of basic and diluted earnings per share, including a reconciliation of the numerator and denominator, are as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Numerator:
 
 
 
 
 
 
 
Net income
$
39

 
$
36

 
$
49

 
$
46

Net loss attributable to noncontrolling interests

 
1

 

 
1

Net income attributable to Hyatt Hotels Corporation
$
39

 
$
37

 
$
49

 
$
47

Denominator:
 
 
 
 
 
 
 
Basic weighted average shares outstanding:
165,854,130

 
169,907,013

 
165,737,068

 
172,056,525

Share-based compensation
116,442

 
231,715

 
265,757

 
272,713

Diluted weighted average shares outstanding
165,970,572

 
170,138,728

 
166,002,825

 
172,329,238

Basic Earnings Per Share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.21

 
$
0.30

 
$
0.27

Net loss attributable to noncontrolling interests

 
0.01

 

 
0.01

Net income attributable to Hyatt Hotels Corporation
$
0.24

 
$
0.22

 
$
0.30

 
$
0.28

Diluted Earnings Per Share:
 
 
 
 
 
 
 
Net income
$
0.24

 
$
0.21

 
$
0.30

 
$
0.27

Net loss attributable to noncontrolling interests

 
0.01

 

 
0.01

Net income attributable to Hyatt Hotels Corporation
$
0.24

 
$
0.22

 
$
0.30

 
$
0.28

The computations of diluted net income per share for the three and six months ended June 30, 2012 and 2011 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 June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Stock-settled SARs
37,400

 
273,320

 
32,100

 
150,400

RSUs
27,300

 
49,000

 
16,300

 
4,440

Other Income (Loss), Net (Tables)
Other income (loss), net [Table Text Block]
The table below provides a reconciliation of the components in other income (loss), net for the three and six months ended June 30, 2012 and 2011, respectively:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Interest income
$
6

 
$
6

 
$
11

 
$
11

Gains (losses) on other marketable securities
9

 
(6
)
 
17

 
(7
)
Foreign currency losses
(2
)
 
(3
)
 
(2
)
 
(4
)
Loss on sale of real estate

 
(2
)
 

 
(2
)
Realignment costs
(7
)
 

 
(7
)
 

Transaction costs
(1
)
 

 
(1
)
 

Other

 
(4
)
 
(1
)
 
(4
)
Other income (loss), net
$
5

 
$
(9
)
 
$
17

 
$
(6
)
Organization (Details)
Jun. 30, 2012
Number of Countries in which Entity Operates
45 
Full Service [Member]
 
Number of hotels operated or franchised
249 
Number of rooms operated or franchised
104,006 
Select Service [Member]
 
Number of hotels operated or franchised
220 
Number of rooms operated or franchised
29,128 
Equity and Cost Method Investments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Contributions to investments
 
 
$ 41 
$ 19 
Joint Venture Hawaii [Member]
 
 
 
 
Contributions to investments
 
 
37 
 
Select Service Hotels [Member]
 
 
 
 
Contributions to investments
 
20 
 
20 
Equity Method Investment, Ownership Percentage
 
40.00% 
 
40.00% 
Required Amount Of Funding By Reporting Entity To Maintain Ownership Percentage
 
40.00% 
 
40.00% 
Maximum Funding By Reporting Entity To Maintain Ownership Interest
 
80 
 
80 
Maximum exposure
 
32 
 
32 
Total Unconsolidated Hospitality Ventures [Member]
 
 
 
 
Equity Earnings Losses From Unconsolidated Hospitality Ventures Impairment
Cost-method Investments [Member]
 
 
 
 
Cost method investment income
$ 0 
$ 0 
$ 0 
$ 0 
Equity And Cost Method Investments (Equity And Cost Method Investment Balances) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Equity method investments
$ 244 
$ 207 
Cost method investments
73 
73 
Total investments
$ 317 
$ 280 
Equity Method Investments (Summarized Financial Information) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Total revenues
$ 251 
$ 229 
$ 494 
$ 468 
Gross operating profit
82 
71 
153 
147 
Income (loss) from continuing operations
12 
23 
Net income (loss)
$ 5 
$ 12 
$ 3 
$ 23 
Fair Value Measurement (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Available-for-sale Securities, Gross Realized Gain (Loss)
$ 0 
$ 0 
$ 0 
$ 0 
 
Fair Value, Concentration of Risk, Foreign Currency Contracts
 
 
Trading Securities, Change in Unrealized Holding Gain (Loss)
$ 0 
$ 0 
$ 0 
$ 0 
 
Fair Value Measurement (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Mutual Funds [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
$ 259 
$ 242 
Mutual Funds [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
259 
242 
Mutual Funds [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Mutual Funds [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Equity Securities [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
28 
35 
Equity Securities [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
28 
35 
Equity Securities [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Equity Securities [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
U.S. Government Obligations [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
105 
102 
U.S. Government Obligations [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
U.S. Government Obligations [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
105 
102 
U.S. Government Obligations [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
U.S. Government Agencies [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
99 
132 
U.S. Government Agencies [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
U.S. Government Agencies [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
99 
132 
U.S. Government Agencies [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Corporate Debt Securities [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
479 
487 
Corporate Debt Securities [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Corporate Debt Securities [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
479 
487 
Corporate Debt Securities [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Mortgage-Backed Securities [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
20 
23 
Mortgage-Backed Securities [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Mortgage-Backed Securities [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
20 
21 
Mortgage-Backed Securities [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Asset-Backed Securities [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Asset-Backed Securities [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Asset-Backed Securities [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Asset-Backed Securities [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Municipal and provincial notes and bonds [Member] |
Total Fair Value [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
14 
14 
Municipal and provincial notes and bonds [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Municipal and provincial notes and bonds [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
14 
14 
Municipal and provincial notes and bonds [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities included in short-term investments, prepaids and other assets and other assets
Interest Bearing Money Market Funds [Member] |
Total Fair Value [Member]
 
 
Marketable securities recorded in cash and cash equivalents
103 
60 
Interest Bearing Money Market Funds [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Marketable securities recorded in cash and cash equivalents
103 
60 
Interest Bearing Money Market Funds [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Marketable securities recorded in cash and cash equivalents
Interest Bearing Money Market Funds [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Marketable securities recorded in cash and cash equivalents
Interest Rate Swap [Member] |
Total Fair Value [Member]
 
 
Derivative instruments
Interest Rate Swap [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Derivative instruments
Interest Rate Swap [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Derivative instruments
Interest Rate Swap [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Derivative instruments
Foreign Currency Forward Contracts [Member] |
Total Fair Value [Member]
 
 
Derivative instruments
(1)
(1)
Foreign Currency Forward Contracts [Member] |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
 
 
Derivative instruments
Foreign Currency Forward Contracts [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
Derivative instruments
(1)
(1)
Foreign Currency Forward Contracts [Member] |
Significant Unobservable Inputs (Level 3) [Member]
 
 
Derivative instruments
$ 0 
$ 0 
Fair Value Measurement (Investments Classified As Available For Sale) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Cost or amortized cost
$ 453 
$ 508 
Gross unrealized gain
Gross unrealized loss
(7)
(7)
Fair Value
452 
506 
Corporate Debt Securities [Member]
 
 
Cost or amortized cost
383 
406 
Gross unrealized gain
Gross unrealized loss
(6)
(5)
Fair Value
383 
406 
U.S. Government Agencies [Member]
 
 
Cost or amortized cost
61 
93 
Gross unrealized gain
Gross unrealized loss
Fair Value
61 
93 
Equity Securities [Member]
 
 
Cost or amortized cost
Gross unrealized gain
Gross unrealized loss
(1)
(2)
Fair Value
$ 8 
$ 7 
Fair Value Measurement (Available For Sale Securities By Contractual Maturity) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Fair Value Disclosures [Abstract]
 
Due in one year or less, Cost or Amortized Cost
$ 269 
Due in one to two years, Cost or Amortized Cost
175 
Total, Cost or Amortized Cost
444 
Due in one year or less, Fair Value
269 
Due in one to two years, Fair Value
175 
Total, Fair Value
$ 444 
Fair Value Measurement (Mortgage Backed Securities Rollforward) (Details) (Collateralized Mortgage Backed Securities [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2012
Mar. 31, 2012
Jun. 30, 2011
Mar. 31, 2011
Collateralized Mortgage Backed Securities [Member]
 
 
 
 
Balance at Beginning of Quarter
$ 0 
$ 2 
$ 2 
$ 2 
Transfers into (out of) Level Three
Settlements
(2)
Total gains (losses) (realized or unrealized)
Balance at End of Quarter
$ 0 
$ 0 
$ 2 
$ 2 
Fair Value Measurement (Carrying Amounts And Fair Values Of Other Financial Instruments) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Debt, excluding capital lease obligations, Carrying Amount
$ (1,008)
$ (1,008)
Secured Financing To Hotel Owners [Member]
 
 
Financing receivables, Carrying Amount
312 
312 
Vacation Ownership Mortgage Receivables [Member]
 
 
Financing receivables, Carrying Amount
41 
42 
Unsecured Financing To Hotel Owners [Member]
 
 
Financing receivables, Carrying Amount
68 
16 
Total Fair Value [Member]
 
 
Debt, excluding capital lease obligations, Fair Value
(1,122)
(1,059)
Total Fair Value [Member] |
Secured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
311 
311 
Total Fair Value [Member] |
Vacation Ownership Mortgage Receivables [Member]
 
 
Financing receivables, Fair Value
42 
42 
Total Fair Value [Member] |
Unsecured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
68 
15 
Fair Value, Inputs, Level 1 [Member]
 
 
Debt, excluding capital lease obligations, Fair Value
Fair Value, Inputs, Level 1 [Member] |
Secured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 1 [Member] |
Vacation Ownership Mortgage Receivables [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 1 [Member] |
Unsecured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 2 [Member]
 
 
Debt, excluding capital lease obligations, Fair Value
(1,122)
(1,059)
Fair Value, Inputs, Level 2 [Member] |
Secured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 2 [Member] |
Vacation Ownership Mortgage Receivables [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 2 [Member] |
Unsecured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
Fair Value, Inputs, Level 3 [Member]
 
 
Debt, excluding capital lease obligations, Fair Value
Fair Value, Inputs, Level 3 [Member] |
Secured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
311 
311 
Fair Value, Inputs, Level 3 [Member] |
Vacation Ownership Mortgage Receivables [Member]
 
 
Financing receivables, Fair Value
42 
42 
Fair Value, Inputs, Level 3 [Member] |
Unsecured Financing To Hotel Owners [Member]
 
 
Financing receivables, Fair Value
$ 68 
$ 15 
Financing Receivables (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2012
Secured Financing To Hotel Owners [Member]
Jun. 30, 2012
Secured Financing To Hotel Owners [Member]
Minimum [Member]
Jun. 30, 2012
Secured Financing To Hotel Owners [Member]
Maximum [Member]
Jun. 30, 2012
Vacation Ownership Mortgage Receivables [Member]
Jun. 30, 2011
Vacation Ownership Mortgage Receivables [Member]
Jun. 30, 2012
Vacation Ownership Mortgage Receivables [Member]
Jun. 30, 2011
Vacation Ownership Mortgage Receivables [Member]
Jun. 30, 2012
Unsecured Financing To Hotel Owners [Member]
Mezzanine Loan [Member]
Mortgage loan receivable
 
 
 
$ 278 
 
 
 
 
 
 
 
Financing Receivable, Gross
512 
512 
460 
 
 
 
 
 
 
 
50 
Mortgage receivable interest rate in addition to LIBOR
 
 
 
3.75% 
 
 
 
 
 
 
5.00% 
Fixed interest rate for franchisee loans
 
 
 
 
5.50% 
6.00% 
 
 
 
 
 
Weighted average interest rate on vacation ownership mortgages receivable
 
 
 
 
 
 
 
 
13.90% 
 
 
Unsecured Financing Receivable Interest Rate
 
 
 
 
 
 
 
 
 
 
6.50% 
Financing Receivables Impairment Charges
 
 
 
 
 
 
 
 
 
Interest Income Accrued from Vacation Ownership Mortgage Receivables Greater than 90 Days but Less than 120 Days
 
 
 
 
 
 
$ 0 
$ 0 
$ 0 
$ 0 
 
Financing Receivables (Schedule Of Financing Receivables) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Financing Receivable, Gross
$ 512 
 
$ 460 
 
 
 
Less allowance for losses
(91)
(90)
(90)
(84)
(83)
(82)
Less current portion included in receivables, net
(11)
 
(10)
 
 
 
Total long-term financing receivables
410 
 
360 
 
 
 
Secured Financing To Hotel Owners [Member]
 
 
 
 
 
 
Financing Receivable, Gross
319 
 
319 
 
 
 
Less allowance for losses
(7)
 
 
 
 
 
Vacation Ownership Mortgage Receivables [Member]
 
 
 
 
 
 
Financing Receivable, Gross
49 
 
50 
 
 
 
Less allowance for losses
(8)
 
 
 
 
 
Unsecured Financing To Hotel Owners [Member]
 
 
 
 
 
 
Financing Receivable, Gross
$ 144 
 
$ 91 
 
 
 
Financing Receivables (Schedule of Future Maturities) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Financing Receivable, Gross
$ 512 
 
$ 460 
 
 
 
Less allowance
(91)
(90)
(90)
(84)
(83)
(82)
Secured Financing To Hotel Owners [Member]
 
 
 
 
 
 
2012
 
 
 
 
 
2013
278 
 
 
 
 
 
2014
 
 
 
 
 
2015
40 
 
 
 
 
 
2016
 
 
 
 
 
2017
 
 
 
 
 
Thereafter
 
 
 
 
 
Financing Receivable, Gross
319 
 
319 
 
 
 
Less allowance
(7)
 
 
 
 
 
Net financing receivables
312 
 
312 
 
 
 
Vacation Ownership Mortgage Receivables [Member]
 
 
 
 
 
 
2012
 
 
 
 
 
2013
 
 
 
 
 
2014
 
 
 
 
 
2015
 
 
 
 
 
2016
 
 
 
 
 
2017
 
 
 
 
 
Thereafter
11 
 
 
 
 
 
Financing Receivable, Gross
49 
 
50 
 
 
 
Less allowance
(8)
 
 
 
 
 
Net financing receivables
$ 41 
 
$ 42 
 
 
 
Financing Receivables (Allowance Rollforward) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2012
Mar. 31, 2012
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2011
Dec. 31, 2010
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
 
 
 
Allowance for Credit Losses
$ 91 
$ 90 
$ 84 
$ 83 
$ 90 
$ 82 
Provisions
 
 
Other Adjustments
 
 
1
1
 
 
Write-offs
(2)
(4)
(1)
(2)
 
 
Recoveries
(2)
 
 
Secured Financing To Hotel Owners [Member]
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
 
 
 
Allowance for Credit Losses
Provisions
 
 
Other Adjustments
 
 
1
1
 
 
Write-offs
(1)
 
 
Recoveries
 
 
Vacation Ownership Mortgage Receivables [Member]
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
 
 
 
Allowance for Credit Losses
10 
10 
Provisions
 
 
Other Adjustments
 
 
1
1
 
 
Write-offs
(2)
(1)
(1)
(1)
 
 
Recoveries
 
 
Unsecured Financing To Hotel Owners [Member]
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
 
 
 
 
Allowance for Credit Losses
76 
75 
72 
70 
75 
68 
Provisions
 
 
Other Adjustments
 
 
1
1
 
 
Write-offs
(3)
 
 
Recoveries
$ (2)
$ 0 
$ 0 
$ 0 
 
 
Financing Receivables (Impaired Loans) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Secured Financing To Hotel Owners [Member]
 
 
Gross Impaired Loans (Principal and Interest)
$ 40 
$ 41 
Unpaid Principal Balance
40 
40 
Related Allowance
(7)
(7)
Average Recorded Loan
40 
40 
Unsecured Financing To Hotel Owners [Member]
 
 
Gross Impaired Loans (Principal and Interest)
51 
51 
Unpaid Principal Balance
46 
46 
Related Allowance
(47)
(46)
Average Recorded Loan
$ 50 
$ 51 
Financing Receivables (Interest Income Recognized) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Secured Financing To Hotel Owners [Member]
 
 
 
 
Impaired Financing Receivable, Interest Income, Accrual Method
$ 0 
$ 0 
$ 1 
$ 1 
Unsecured Financing To Hotel Owners [Member]
 
 
 
 
Impaired Financing Receivable, Interest Income, Accrual Method
$ 0 
$ 0 
$ 0 
$ 0 
Financing Receivables (Analysis Of Financing Receivables) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Receivables Past Due
$ 5 
$ 9 
Greater than 90 Days Past Due
Receivables on Non-Accrual Status
118 
117 
Secured Financing To Hotel Owners [Member]
 
 
Receivables Past Due
Greater than 90 Days Past Due
Receivables on Non-Accrual Status
41 
41 
Vacation Ownership Mortgage Receivables [Member]
 
 
Receivables Past Due
Greater than 120 Days Past Due
Receivables on Non-Accrual Status
Unsecured Financing To Hotel Owners [Member]
 
 
Receivables Past Due
1
1
Greater than 90 Days Past Due
1
1
Receivables on Non-Accrual Status
$ 77 1
$ 76 1
Acquisitions, Dispositions, And Discontinued Operations (Narrative) (Details)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended
Jun. 30, 2012
USD ($)
Jun. 30, 2011
USD ($)
Jun. 30, 2012
USD ($)
Jun. 30, 2011
USD ($)
Jun. 30, 2011
Hyatt Place And Hyatt Summerfield Suites [Member]
USD ($)
Jun. 30, 2011
Hyatt Tampa Bay [Member]
USD ($)
Jun. 30, 2011
Hyatt Regency Minneapolis [Member]
USD ($)
Jun. 30, 2011
Hyatt Regency Greenville [Member]
USD ($)
Jun. 30, 2011
Hyatt Deerfield [Member]
USD ($)
Jun. 30, 2011
Woodfin Suites [Member]
USD ($)
Jun. 30, 2012
Hyatt Regency Mexico City [Member]
USD ($)
Jun. 30, 2012
Hyatt Regency Mexico City [Member]
MXN ($)
Jun. 30, 2012
Acquired Intangibles [Member]
Jun. 30, 2011
Select Service Hotels [Member]
USD ($)
Business Acquisition, Cost of Acquired Entity, Purchase Price
 
 
 
 
 
 
 
 
 
$ 77 
$ 201 
 
 
 
Business Acquisition, Purchase Price Allocation, Current Assets, Cash and Cash Equivalents
 
 
 
 
 
 
 
 
 
 
11 
 
 
 
Business Acquisition, Purchase Price, Net
 
 
 
 
 
 
 
 
 
 
190 
 
 
 
Purchase Price Holdback Escrow
 
 
 
 
 
 
 
 
 
 
11 
 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill Amount
 
 
 
 
 
 
 
 
 
 
30 
410 
 
 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
 
 
 
 
 
 
 
 
 
 
 
 
17 years 
 
Deferred Tax Liabilities, Net, Noncurrent
 
 
 
 
 
 
 
 
 
 
41 
 
 
 
Business Combination, Acquisition Related Costs
 
 
 
 
 
 
 
 
 
Ownership percentage in the joint venture
 
 
 
 
 
 
 
 
 
 
 
 
 
40.00% 
Sales Price for Disposition
 
 
 
 
110 
 
 
 
 
 
 
 
 
 
Proceeds from Real Estate and Real Estate Joint Ventures
 
 
90 
90 
 
 
 
 
 
 
 
 
 
Contributions to investments
 
 
20 
 
 
 
 
 
 
 
 
 
20 
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal
(2)
(2)
(2)
 
 
 
 
 
 
 
 
 
Debt of joint venture
 
 
 
 
 
 
25 
 
 
 
 
 
 
 
Real Estate Sale Proceeds Transferred To Escrow As Restricted Cash In Investing Activities
 
 
35 
35 
 
 
 
 
 
 
 
 
 
Real estate sale proceeds transferred from escrow to cash and cash equivalents
 
 
97 
 
56 
 
15 
26 
 
 
 
 
 
Proceeds from sale of assets held for sale
 
 
$ 0 
$ 18 
 
 
 
 
 
 
 
 
 
 
Acquisitions, Dispositions, And Discontinued Operations Purchase Price Allocation (Details) (Hyatt Regency Mexico City [Member], USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Hyatt Regency Mexico City [Member]
 
Business Acquisition [Line Items]
 
Business Acquisition, Purchase Price Allocation, Current Assets, Cash and Cash Equivalents
$ 11 
Business Acquisition, Purchase Price Allocation, Current Assets
Business Acquisition, Purchase Price Allocation, Property, Plant and Equipment
190 
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets
12 
Business Acquisition, Purchase Price Allocation, Assets Acquired
216 
Business Acquisition, Purchase Price Allocation, Current Liabilities
Business Acquisition, Purchase Price Allocation, Noncurrent Liabilities
42 
Business Acquisition, Purchase Price Allocation, Liabilities Assumed
45 
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net
$ 171 
Acquisitions, Dispositions, And Discontinued Operations Results of Acquisition (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Business Acquisition [Line Items]
 
 
 
 
Revenues
$ 1,014 
$ 936 
$ 1,972 
$ 1,811 
Hyatt Regency Mexico City [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Revenues
 
 
 
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest
$ 1 
 
 
 
Acquisitions, Dispositions, And Discontinued Operations Pro Forma Consolidated Results of Operations (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Business Acquisition [Line Items]
 
 
 
 
Business Acquisition, Pro Forma Revenue
$ 1,020 
$ 948 
$ 1,990 
$ 1,833 
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations before Changes in Accounting and Extraordinary Items, Net of Tax
$ 41 
$ 39 
$ 53 
$ 48 
Goodwill And Intangible Assets (Narrative) (Details)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
USD ($)
Dec. 31, 2011
USD ($)
Jun. 30, 2012
Hyatt Regency Mexico City [Member]
USD ($)
Jun. 30, 2012
Hyatt Regency Mexico City [Member]
MXN ($)
Jun. 30, 2012
Contract Acquisition Costs [Member]
Minimum [Member]
Jun. 30, 2012
Contract Acquisition Costs [Member]
Maximum [Member]
Jun. 30, 2012
Franchise and Management Intangibles [Member]
Minimum [Member]
Jun. 30, 2012
Franchise and Management Intangibles [Member]
Maximum [Member]
Goodwill
$ 132 
$ 102 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation, Goodwill Amount
 
 
$ 30 
$ 410 
 
 
 
 
Finite-Lived Intangible Asset, Useful Life
 
 
 
 
5 years 
40 years 
10 years 
30 years 
Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Gross intangibles, total
$ 450 
$ 422 
Accumulated amortization
(74)
(63)
Intangibles, net
376 
359 
Contract Acquisition Costs [Member]
 
 
Contract acquisition costs
181 
167 
Weighted Average Useful Lives
23 years 
 
Acquired Lease Rights [Member]
 
 
Acquired lease rights
135 
133 
Weighted Average Useful Lives
112 years 
 
Franchise and Management Intangibles [Member]
 
 
Franchise and management intangibles
125 
115 
Weighted Average Useful Lives
25 years 
 
Other Intangibles [Member]
 
 
Other
$ 9 
$ 7 
Weighted Average Useful Lives
10 years 
 
Goodwill And Intangible Assets (Amortization Expense) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Amortization expense
$ 7 
$ 5 
$ 12 
$ 8 
Derivative Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Dec. 31, 2011
Notional amount of contracts
 
 
$ 25 
Amount of note hedged
175 
175 
200 
Senior unsecured note
250 
250 
250 
Fixed rate range, lower end
2.68% 
2.68% 
 
Fixed rate range, higher end
4.77% 
4.77% 
 
Derivative assets
Change in fair value of long term debt
 
Cumulative Ineffectiveness
Gain (Loss) on Derivative Instruments, Net, Pretax
 
 
Interest Rate Lock Commitments [Member]
 
 
 
Notional value of treasury-lock derivative instruments
250 
250 
 
Amortization of Deferred Hedge Gains (Losses)
 
Settlement of treasury lock derivative instrument
(14)
(14)
 
Interest Rate Swap Termination [Member]
 
 
 
Notional amount of contracts
$ 25 
$ 25 
 
Derivative Instruments (US Dollar Equivalent Of The Notional Amount Of Forward Contracts) (Details) (Foreign Currency Forward Contracts [Member], USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Notional amount of foreign currency derivatives
$ 258 
$ 245 
Pound Sterling [Member]
 
 
Notional amount of foreign currency derivatives
152 
126 
Swiss Franc [Member]
 
 
Notional amount of foreign currency derivatives
46 
59 
Korean Won [Member]
 
 
Notional amount of foreign currency derivatives
33 
33 
Canadian Dollar
 
 
Notional amount of foreign currency derivatives
$ 27 
$ 27 
Derivative Instruments (Fair Value Of Derivative Instruments) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Total derivative assets
$ 6 
$ 7 
Total derivative liabilities
Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
 
 
Total derivative assets
Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Liabilities [Member]
 
 
Total derivative liabilities
Derivatives Not Designated as Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Prepaids and Other Assets [Member]
 
 
Total derivative assets
Derivatives Not Designated as Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Accrued Expenses and Other Current Liabilities [Member]
 
 
Total derivative liabilities
$ 1 
$ 1 
Derivative Instruments (Effect Of Derivative Instruments On Income) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Fair Value Hedging [Member] |
Interest Rate Swap [Member]
 
 
 
 
Derivative Instruments, Loss Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing
$ 0 1
$ 0 1
$ 0 1
$ 0 1
Fair Value Hedging [Member] |
Other Income (Loss), Net [Member] |
Interest Rate Swap [Member]
 
 
 
 
Gains (losses) on derivatives
1
1
1
1
Losses on borrowings
(1)1
(2)1
(1)1
(1)1
Cash Flow Hedging [Member] |
Interest Rate Lock Commitments [Member]
 
 
 
 
Derivative Instruments, Loss Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing
2
2
2
2
Cash Flow Hedging [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Interest Rate Lock Commitments [Member]
 
 
 
 
Gains (losses) on derivatives
Cash Flow Hedging [Member] |
Interest Expense [Member] |
Interest Rate Lock Commitments [Member]
 
 
 
 
Gains (losses) on derivatives
Cash Flow Hedging [Member] |
Other Income (Loss), Net [Member] |
Interest Rate Lock Commitments [Member]
 
 
 
 
Gains (losses) on derivatives
2
2
2
2
Derivatives Not Designated as Hedging Instruments [Member] |
Other Income (Loss), Net [Member] |
Foreign Currency Forward Contracts [Member]
 
 
 
 
Gains (losses) on derivatives
$ 4 
$ (6)
$ (2)
$ (8)
Employee Benefit Plans (Schedule Of Costs Incurred For Employee Benefit Plans) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Defined benefit plan
$ 1 
$ 1 
$ 1 
$ 1 
Defined contribution plan
18 
17 
Deferred compensation plan
$ 1 
$ 1 
$ 5 
$ 4 
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Effective tax rate
30.30% 
(2.70%)
30.80% 
9.20% 
 
U.S. statutory federal income tax rate
35.00% 
35.00% 
35.00% 
35.00% 
 
Income Tax Reconciliation, Tax Credits, Foreign
$ 10 
 
$ 10 
 
 
Provisions from Reduction of Deferred Tax Assets from Unconsolidated Investments.
 
 
 
Reserves for Interest Related to Expensing Certain Renovation Costs
 
 
 
 
Change in uncertain tax position
 
 
 
 
Interest and penalties
 
 
 
Valuation Allowance, Deferred Tax Asset, Change in Amount
 
12 
 
12 
 
Deferred Foreign Income Tax Expense (Benefit)
 
 
 
 
Unrecognized Tax Benefits, Period Increase (Decrease)
 
 
 
 
Total unrecognized tax benefits
175 
 
175 
 
175 
Amount of unrecognized tax benefits that would affect the tax rate if recognized
49 
 
49 
 
49 
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations
 
 
$ 46 
 
 
Commitments And Contingencies (Guarantees And Commitments Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Commitments
$ 536 
$ 536 
Joint Venture New York [Member]
 
 
Commitments
375 
375 
Purchase price commitment, percentage
 
66.67% 
Purchase Price Commitment To Loan Or Investment
250 
250 
Debt instrument value
50 
50 
Joint Venture Hawaii [Member]
 
 
Maximum exposure
81 
81 
Joint Venture Minneapolis [Member]
 
 
Maximum exposure
25 
25 
Profitability Guarantees [Member]
 
 
Charge in period
Maximum exposure
27 
27 
Accrual for guarantee
Loan, Lease Completion And Repayment Guarantees [Member]
 
 
Maximum exposure
109 
109 
Successful enforcement of various guarantee agreements
$ 81 
$ 81 
Commitments And Contingencies (Surety Bonds And Letters Of Credit Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
 
Surety bonds
$ 24 
Letters of Credit Outstanding
120 
Letters of credit that reduce the available capacity under the revolving credit facility
$ 99 
Equity (Narrative) (Details) (Common Class B, USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2011
Common Class B
 
Stock repurchased
8,987,695 
Cost per share
$ 44.03 
Share repurchase, value
$ 396 
Percent repurchased
5.20% 
Equity (Schedule Of Stockholders' Equity And Noncontrolling Interest) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Beginning balance - Attributable to Parent
 
 
$ 4,818 
 
Beginning balance - Attributable to noncontrolling interests
 
 
10 
 
Beginning balance - Including noncontrolling interests
 
 
4,828 
 
Net Income (Loss) Attributable to Parent
39 
37 
49 
47 
Net loss attributable to noncontrolling interests
(1)
(1)
NET INCOME
39 
36 
49 
46 
Other comprehensive income (loss)
(24)
17 
(4)
40 
Ending balance - Attributable to Parent
4,873 
 
4,873 
 
Ending balance - Attributable to noncontrolling interests
10 
 
10 
 
Ending balance - Including noncontrolling interests
4,883 
 
4,883 
 
Equity Component [Domain]
 
 
 
 
Beginning balance - Including noncontrolling interests
 
 
4,828 
5,131 
NET INCOME
 
 
49 
46 
Other comprehensive income (loss)
 
 
(4)
40 
Share repurchase, value
 
 
 
(396)
Stock Issued During Period, Value, Share-Based Compensation To Directors
 
 
Share-based payment activity
 
 
12 
Ending balance - Including noncontrolling interests
4,883 
4,834 
4,883 
4,834 
Stockholders' Equity [Member]
 
 
 
 
Beginning balance - Attributable to Parent
 
 
4,818 
5,118 
Net Income (Loss) Attributable to Parent
 
 
49 
47 
Other comprehensive income (loss)
 
 
(4)
40 
Share repurchase, value
 
 
 
(396)
Stock Issued During Period, Value, Share-Based Compensation To Directors
 
 
Share-based payment activity
 
 
12 
Ending balance - Attributable to Parent
4,873 
4,822 
4,873 
4,822 
Noncontrolling Interests In Consolidated Subsidiaries [Member]
 
 
 
 
Beginning balance - Attributable to noncontrolling interests
 
 
10 
13 
Net loss attributable to noncontrolling interests
 
 
 
(1)
Other comprehensive income (loss)
 
 
Share repurchase, value
 
 
 
Stock Issued During Period, Value, Share-Based Compensation To Directors
 
 
Share-based payment activity
 
 
Ending balance - Attributable to noncontrolling interests
$ 10 
$ 12 
$ 10 
$ 12 
Equity (Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax
 
 
$ (64)
$ (33)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax
(23)
15 
(5)
38 
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax
(69)
(69)
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
 
 
(2)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
(1)
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
(1)
(1)
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax
 
 
(6)
(5)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax
 
 
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax
(6)
(5)
(6)
(5)
Accumulated Other Comprehensive Income Loss Changes in Net Gain Loss From Derivative Instruments, Net of Tax
 
 
(8)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax
Accumulated Other Comprehensive Income Loss Changes in Net Gain Loss From Derivative Instruments, Net of Tax
(8)
(8)
Accumulated Other Comprehensive Income (Loss), Net of Tax
 
 
(80)
(38)
Other Comprehensive Income (Loss), Net of Tax
(24)
17 
(4)
40 
Accumulated Other Comprehensive Income (Loss), Net of Tax
$ (84)
$ 2 
$ (84)
$ 2 
Stock-Based Compensation (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
Stock Appreciation Rights [Member]
 
 
Contractual life, stock appreciation rights (in years)
 
10 
Grants in period
 
405,877 
Weighted-average fair value at grant date
 
$ 17.29 
Total unearned compensation
$ 17 
$ 17 
Restricted Stock Units [Member]
 
 
Grants in period
 
463,846 
Weighted-average fair value at grant date
 
$ 41.06 
Total unearned compensation
37 
37 
Restricted Stock Units [Member] |
Unearned compensation maximum recognition period [Member]
 
 
Amortization period, deferred compensation expense, years
 
9 years 
PSUs and PSSs [Member]
 
 
Performance period (in years)
 
3 years 
Total unearned compensation
PSUs and PSSs [Member] |
Unearned compensation maximum recognition period [Member]
 
 
Amortization period, deferred compensation expense, years
 
3 years 
Performance Vested Restricted Stock (PSS) [Member]
 
 
Grants in period
 
209,569 
Weighted-average fair value at grant date
 
$ 41.29 
SARs and RSUs [Member] |
Unearned compensation average recognition period [Member]
 
 
Amortization period, deferred compensation expense, years
 
4 years 
Cash Settled RSUs [Member]
 
 
Cash-settled liability
Cash-settled expense
$ 0 
$ 0 
Cash-settled, grants in period
 
Related-Party Transactions (Leases Narrative) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Related Party [Member]
Jun. 30, 2011
Related Party [Member]
Proceeds from Amendment of Sublease Agreement
$ 4 
 
Operating Leases, Income Statement, Carrying Amount at Lease Inception Exceeds Fair Value
 
Future sublease income
$ 11 
 
Related-Party Transactions (Other Services Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Management and franchise fees
$ 80 
$ 75 
$ 159 
$ 145 
 
Related Party Other Services [Member]
 
 
 
 
 
Management and franchise fees
 
Due from related parties
$ 1 
 
$ 1 
 
$ 1 
Related-Party Transactions (Equity Method Investments Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Management and franchise fees
$ 80 
$ 75 
$ 159 
$ 145 
 
Equity Method Investments [Member]
 
 
 
 
 
Management and franchise fees
10 
19 
18 
 
Due from related parties
$ 13 
 
$ 13 
 
$ 7 
Maximum [Member]
 
 
 
 
 
Ownership percentage in the joint venture
50.00% 
 
50.00% 
 
 
Minimum [Member]
 
 
 
 
 
Ownership percentage in the joint venture
8.00% 
 
8.00% 
 
 
Related-Party Transactions (Share Repurchase Narrative) (Details) (Common Class B, USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2011
Common Class B
 
Stock repurchased
8,987,695 
Cost per share
$ 44.03 
Share repurchase, value
$ 396 
Percent repurchased
5.20% 
Segment Information (Summarized Consolidated Financial Information by Segment) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Revenues
$ 1,014 
$ 936 
$ 1,972 
$ 1,811 
 
Adjusted EBITDA
180 
151 
305 
260 
 
Depreciation and amortization
89 
72 
175 
143 
 
Assets
7,681 
 
7,681 
 
7,507 
North American Management and Franchising [Member]
 
 
 
 
 
Revenues
433 
397 
864 
789 
 
Intersegment Revenues
22 1
15 1
40 1
29 1
 
Adjusted EBITDA
54 
44 
100 
84 
 
Depreciation and amortization
 
International Management and Franchising [Member]
 
 
 
 
 
Revenues
55 
54 
110 
105 
 
Intersegment Revenues
1
1
1
1
 
Adjusted EBITDA
24 
22 
44 
42 
 
Depreciation and amortization
 
Owned and Leased Hotels [Member]
 
 
 
 
 
Revenues
528 
484 
1,001 
916 
 
Adjusted EBITDA
132 
114 
225 
189 
 
Depreciation and amortization
81 
66 
161 
132 
 
Assets
5,012 2
 
5,012 2
 
4,825 2
Corporate and Other [Member]
 
 
 
 
 
Revenues
24 
21 
45 
39 
 
Adjusted EBITDA
(30)
(29)
(64)
(55)
 
Depreciation and amortization
 
Eliminations [Member]
 
 
 
 
 
Revenues
(26)1
(20)1
(48)1
(38)1
 
Adjusted EBITDA
1
1
1
1
 
Depreciation and amortization
$ 0 1
$ 0 1
$ 0 1
$ 0 1
 
Segment Information (Reconciliation of Consolidated Adjusted EBITDA to EBITDA and a Reconciliation of EBITDA to Net Income attributable to Hyatt Hotels Corporation) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Adjusted EBITDA
$ 180 
$ 151 
$ 305 
$ 260 
Equity earnings (losses) from unconsolidated hospitality ventures
(1)
Asset Impairments
(1)
(1)
Other income (loss), net
(9)
17 
(6)
Net loss attributable to noncontrolling interests
Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA
(22)
(22)
(40)
(37)
EBITDA
163 
122 
281 
222 
Depreciation and amortization
(89)
(72)
(175)
(143)
Interest expense
(17)
(14)
(35)
(27)
(Provision) benefit for income taxes
(18)
(22)
(5)
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
$ 39 
$ 37 
$ 49 
$ 47 
Earnings Per Share (Schedule of the Calculation of Basic and Diluted Earnings Per Share) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
NET INCOME
$ 39 
$ 36 
$ 49 
$ 46 
Net loss attributable to noncontrolling interests
(1)
(1)
NET INCOME ATTRIBUTABLE TO HYATT HOTELS CORPORATION
$ 39 
$ 37 
$ 49 
$ 47 
Basic weighted average shares outstanding
165,854,130 
169,907,013 
165,737,068 
172,056,525 
Share-based compensation
116,442 
231,715 
265,757 
272,713 
Diluted weighted average shares outstanding
165,970,572 
170,138,728 
166,002,825 
172,329,238 
Net income - Basic
$ 0.24 
$ 0.21 
$ 0.30 
$ 0.27 
Net loss attributable to noncontrolling interests - Basic
$ 0.00 
$ 0.01 
$ 0.00 
$ 0.01 
Net income attributable to Hyatt Hotels Corporation - Basic
$ 0.24 
$ 0.22 
$ 0.30 
$ 0.28 
Net income - Diluted
$ 0.24 
$ 0.21 
$ 0.30 
$ 0.27 
Net loss attributable to noncontrolling interests - Diluted
$ 0.00 
$ 0.01 
$ 0.00 
$ 0.01 
Net income attributable to Hyatt Hotels Corporation - Diluted
$ 0.24 
$ 0.22 
$ 0.30 
$ 0.28 
Earnings Per Share (Anti-dilutive Shares Issued) (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Stock Appreciation Rights (SARs) [Member]
 
 
 
 
Antidilutive securities excluded from the computations of diluted net income per share
37,400 
273,320 
32,100 
150,400 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
Antidilutive securities excluded from the computations of diluted net income per share
27,300 
49,000 
16,300 
4,440 
Other Income (Loss), Net (Reconciliation of Components in Other Income, Net) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Interest income
$ 6 
$ 6 
$ 11 
$ 11 
Gains (losses) on other marketable securities
(6)
17 
(7)
Foreign currency losses
(2)
(3)
(2)
(4)
Loss on sale of real estate
(2)
(2)
Realignment costs
(7)
(7)
Transaction costs
(1)
(1)
Other
(4)
(1)
(4)
Other income (loss), net
$ 5 
$ (9)
$ 17 
$ (6)