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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________ 
FORM 10-Q
_______________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File No. 1-13881
_________________________________________________ 
https://cdn.kscope.io/bc2682ec419d72fd6af276b60833ab1e-mar-20200630_g1.jpg
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 _______________________________________
Delaware52-2055918
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
10400 Fernwood RoadBethesdaMaryland20817
(Address of principal executive offices)
(Zip Code)
(301) 380-3000
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Class A Common Stock, $0.01 par valueMAR
Nasdaq Global Select Market
Class A Common Stock, $0.01 par valueMAR
Chicago Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý Accelerated filer 
¨
Non-accelerated filer ¨Smaller Reporting Company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 324,315,074 shares of Class A Common Stock, par value $0.01 per share, outstanding at July 31, 2020.



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MARRIOTT INTERNATIONAL, INC.
FORM 10-Q TABLE OF CONTENTS
 
  Page No.
Part I.
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.


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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements

MARRIOTT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
($ in millions, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
REVENUES
Base management fees$40  $309  $254  $591  
Franchise fees182  525  597  975  
Incentive management fees12  165  12  328  
Gross fee revenues234  999  863  1,894  
Contract investment amortization(21) (15) (46) (29) 
Net fee revenues213  984  817  1,865  
Owned, leased, and other revenue49  418  329  793  
Cost reimbursement revenue1,202  3,903  4,999  7,659  
1,464  5,305  6,145  10,317  
OPERATING COSTS AND EXPENSES
Owned, leased, and other-direct121  331  393  656  
Depreciation, amortization, and other72  56  222  110  
General, administrative, and other178  229  448  451  
Restructuring and merger-related charges6  173  4  182  
Reimbursed expenses 1,241  4,107  5,118  7,999  
1,618  4,896  6,185  9,398  
OPERATING (LOSS) INCOME(154) 409  (40) 919  
Gains and other income, net5  1  1  6  
Interest expense(127) (102) (220) (199) 
Interest income8  6  14  12  
Equity in (losses) earnings(30)   (34) 8  
(LOSS) INCOME BEFORE INCOME TAXES(298) 314  (279) 746  
Benefit (provision) for income taxes 64  (82) 76  (139) 
NET (LOSS) INCOME$(234) $232  $(203) $607  
(LOSS) EARNINGS PER SHARE
(Loss) earnings per share - basic$(0.72) $0.70  $(0.63) $1.80  
(Loss) earnings per share - diluted$(0.72) $0.69  $(0.63) $1.79  
See Notes to Condensed Consolidated Financial Statements.
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MARRIOTT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
($ in millions)
(Unaudited)

Three Months Ended Six Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net (loss) income$(234) $232  $(203) $607  
Other comprehensive (loss) income:
Foreign currency translation adjustments133  38  (250) 71  
Derivative instrument adjustments and other, net of tax(1) (1) 12  (2) 
Reclassification adjustments, net of tax(1) (3) (9) (4) 
Total other comprehensive income (loss), net of tax131  34  (247) 65  
Comprehensive (loss) income$(103) $266  $(450) $672  
See Notes to Condensed Consolidated Financial Statements.

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MARRIOTT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited)
June 30,
2020
December 31,
2019
ASSETS
Current assets
Cash and equivalents$2,283  $225  
Accounts and notes receivable, net1,621  2,395  
Prepaid expenses and other201  252  
Assets held for sale8  255  
4,113  3,127  
Property and equipment, net1,818  1,904  
Intangible assets
Brands5,888  5,954  
Contract acquisition costs and other2,624  2,687  
Goodwill8,962  9,048  
17,474  17,689  
Equity method investments534  577  
Notes receivable, net148  117  
Deferred tax assets184  154  
Operating lease assets759  888  
Other noncurrent assets650  595  
$25,680  $25,051  
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities
Current portion of long-term debt$1,665  $977  
Accounts payable555  720  
Accrued payroll and benefits1,115  1,339  
Liability for guest loyalty program1,480  2,258  
Accrued expenses and other1,303  1,383  
6,118  6,677  
Long-term debt10,133  9,963  
Liability for guest loyalty program4,600  3,460  
Deferred tax liabilities121  290  
Deferred revenue1,665  840  
Operating lease liabilities830  882  
Other noncurrent liabilities2,292  2,236  
Shareholders’ (deficit) equity
Class A Common Stock5  5  
Additional paid-in-capital5,753  5,800  
Retained earnings9,270  9,644  
Treasury stock, at cost(14,499) (14,385) 
Accumulated other comprehensive loss(608) (361) 
(79) 703  
$25,680  $25,051  

See Notes to Condensed Consolidated Financial Statements.
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MARRIOTT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited)

Six Months Ended
 June 30, 2020June 30, 2019
OPERATING ACTIVITIES
Net (loss) income$(203) $607  
Adjustments to reconcile to cash provided by operating activities:
Depreciation, amortization, and other268  139  
Share-based compensation91  90  
Income taxes(148) (102) 
Liability for guest loyalty program362  226  
Contract acquisition costs(60) (93) 
Restructuring and merger-related charges(13) 142  
Working capital changes354  (379) 
Gain on asset dispositions  (6) 
Deferred revenue changes and other854  114  
Net cash provided by operating activities1,505  738  
INVESTING ACTIVITIES
Capital expenditures(79) (142) 
Dispositions260  2  
Loan advances(33) (10) 
Loan collections5  6  
Other(12) (30) 
Net cash provided by (used in) investing activities141  (174) 
FINANCING ACTIVITIES
Commercial paper/Credit Facility, net(827) 823  
Issuance of long-term debt2,566  841  
Repayment of long-term debt(924) (617) 
Issuance of Class A Common Stock  6  
Dividends paid(156) (298) 
Purchase of treasury stock(150) (1,228) 
Share-based compensation withholding taxes(99) (123) 
Other(9) (8) 
Net cash provided by (used in) financing activities401  (604) 
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH2,047  (40) 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period (1)
253  360  
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period (1)
$2,300  $320  
(1)The 2020 amounts include beginning restricted cash of $28 million at December 31, 2019, and ending restricted cash of $17 million at June 30, 2020, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.
See Notes to Condensed Consolidated Financial Statements.
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MARRIOTT INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc. and subsidiaries (referred to in this report as “we,” “us,” “Marriott,” or “the Company”). In order to make this report easier to read, we also refer throughout to (i) our Condensed Consolidated Financial Statements as our “Financial Statements,” (ii) our Condensed Consolidated Statements of Income as our “Income Statements,” (iii) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (iv) our Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (v) our properties, brands, or markets in the United States (“U.S.”) and Canada as “North America” or “North American,” and (vi) our properties, brands, or markets in our Caribbean and Latin America region, Europe, Middle East and Africa segment, and Asia Pacific segment, as “International.” In addition, references throughout to numbered “Notes” refer to these Notes to Condensed Consolidated Financial Statements, unless otherwise stated.
These Financial Statements have not been audited. We have condensed or omitted certain information and disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements in this report should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (“2019 Form 10-K”). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2019 Form 10-K.
Preparation of financial statements that conform with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. The uncertainty created by the coronavirus and efforts to contain it (“COVID-19”) has made such estimates more difficult and subjective. Accordingly, ultimate results could differ from those estimates.
The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2020 and December 31, 2019, the results of our operations for the three and six months ended June 30, 2020 and June 30, 2019, and cash flows for the six months ended June 30, 2020 and June 30, 2019. Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations, as well as the impact of COVID-19. We have eliminated all material intercompany transactions and balances between entities consolidated in these Financial Statements.
New Accounting Standards Adopted
Accounting Standards Update (“ASU”) No. 2016-13 - “Financial Instruments-Credit Losses” (Topic 326).
ASU 2016-13 requires the use of an impairment methodology that reflects an estimate of expected credit losses, measured over the contractual life of an instrument, based on information about past events, current conditions, and forecasts of future economic conditions. We adopted ASU 2016-13 in the 2020 first quarter using the modified retrospective transition method. Upon adoption, we increased our allowance for credit losses in the “Accounts and notes receivable, net” caption of our Balance Sheets by $19 million, from $82 million at December 31, 2019 to $101 million at January 1, 2020. We also recorded a $4 million decrease in the “Deferred tax liabilities” caption of our Balance Sheets and a $15 million cumulative-effect adjustment to retained earnings on our Balance Sheets.
Additionally, we recorded provisions for credit losses of $45 million in the 2020 second quarter and $123 million in the 2020 first half, primarily due to the negative economic impact caused by COVID-19 and our estimate of future economic conditions. The allowance for credit losses was $206 million at June 30, 2020.
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NOTE 2. RESTRUCTURING CHARGES
We initiated several regional restructuring plans to achieve cost savings in response to the decline in lodging demand caused by COVID-19. In the 2020 first half, we recorded $26 million of restructuring charges for employee termination benefits, of which we present $6 million in the “Restructuring and merger-related charges” caption and $20 million in the “Reimbursed expenses” caption of our Income Statements.
Our global above-property restructuring activities are currently expected to result in approximately $125 million to $145 million of charges, primarily related to employee termination benefits. We expect to substantially complete the foregoing programs relating to our above-property organization by year-end 2020.
The above amounts do not include estimates for property-level plans for company-operated properties which are anticipated to be implemented over future quarters and expected to result in future charges.
NOTE 3. DISPOSITIONS
In the 2020 first quarter, we sold a North America property for $268 million. We will continue to operate the hotel under a long-term management agreement.
NOTE 4. EARNINGS PER SHARE
The table below presents the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share:
Three Months Ended Six Months Ended
(in millions, except per share amounts)June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Computation of Basic Earnings Per Share
Net (loss) income$(234) $232  $(203) $607  
Shares for basic (loss) earnings per share325.6  333.8  325.5  336.7  
Basic (loss) earnings per share$(0.72) $0.70  $(0.63) $1.80  
Computation of Diluted (Loss) Earnings Per Share
Net (loss) income$(234) $232  $(203) $607  
Shares for basic (loss) earnings per share325.6  333.8  325.5  336.7  
Effect of dilutive securities
Share-based compensation (1)
  2.6    2.9  
Shares for diluted (loss) earnings per share325.6  336.4  325.5  339.6  
Diluted (loss) earnings per share$(0.72) $0.69  $(0.63) $1.79  
(1) For the calculation of diluted loss per share for the three and six months ended June 30, 2020, we excluded share-based compensation securities of 0.8 million and 1.4 million, respectively, because the effect was anti-dilutive.
NOTE 5. SHARE-BASED COMPENSATION
We granted 1.6 million restricted stock units (“RSUs”) during the 2020 first half to certain officers and key employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date. We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2020 first half to certain executive officers, which are earned, subject to continued employment and the satisfaction of certain performance conditions based on achievement of pre-established targets for gross room openings, active Marriott Bonvoy™ loyalty member growth, and adjusted operating income growth over, or at the end of, a three-year performance period. RSUs, including PSUs, granted in the 2020 first half had a weighted average grant-date fair value of $111 per unit.
We recorded share-based compensation expense for RSUs and PSUs of $46 million in the 2020 second quarter and $48 million in the 2019 second quarter, $85 million in the 2020 first half, and $86 million in the 2019 first half. Deferred compensation costs for unvested awards for RSUs and PSUs totaled $268 million at June 30, 2020 and $176 million at December 31, 2019.
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NOTE 6. INCOME TAXES
Our effective tax rate was 21.5 percent for the 2020 second quarter compared to 26.2 percent for the 2019 second quarter. The decrease in our effective tax rate was primarily due to the prior year tax expense incurred for U.S. tax on global intangible low-taxed income (“GILTI”) and the prior year impact of the non-tax deductible accrual for the Proposed ICO Fine.
Our effective tax rate was 27.3 percent for the 2020 first half compared to 18.7 percent for the 2019 first half. The change in our effective tax rate was primarily due to a more favorable impact from stock based compensation as a percentage of lower pre-tax book income.
We paid cash for income taxes, net of refunds, of $72 million in the 2020 first half and $241 million in the 2019 first half.
NOTE 7. COMMITMENTS AND CONTINGENCIES
Guarantees
We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at June 30, 2020 in the following table:
($ in millions)
Guarantee Type
Maximum Potential Amount of Future FundingsRecorded Liability for Guarantees
Debt service$53  $6  
Operating profit207  132  
Other17  4  
$277  $142  

Our maximum potential guarantees listed in the preceding table include $78 million of guarantees that will not be in effect until the underlying properties open and we begin to operate the properties or certain other events occur.
Contingent Purchase Obligation
Sheraton Grand Chicago. We granted the owner a one-time right, exercisable in 2022, to require us to purchase the leasehold interest in the land and the hotel for $300 million in cash (the “put option”). If the owner exercises the put option, we have the option to purchase, at the same time the put transaction closes, the fee simple interest in the underlying land for an additional $200 million in cash. We accounted for the put option as a guarantee, and our recorded liability at June 30, 2020 was $57 million.
Starwood Data Security Incident
Description of Event
On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the “Data Security Incident”). Working with leading security experts, we determined that there was unauthorized access to the Starwood network since 2014 and that an unauthorized party had copied information from the Starwood reservations database and taken steps towards removing it. The Starwood reservations database is no longer used for business operations.
Expenses and Insurance Recoveries
In the 2020 second quarter, we recorded $3 million of expenses and $3 million of accrued insurance recoveries, and in the 2019 second quarter, we recorded $148 million of expenses and $22 million of accrued insurance recoveries, related to the Data Security Incident. In the 2020 first half, we recorded $18 million of expenses and $20 million of accrued insurance recoveries, and in the 2019 first half, we recorded $192 million of expenses and $68 million of accrued insurance recoveries, related to the Data Security Incident. We received
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insurance recoveries of $20 million in the 2020 second quarter, $12 million in the 2019 second quarter, $44 million in the 2020 first half, and $52 million in the 2019 first half. Expenses for the 2020 second quarter and year-to-date primarily included legal costs. We recognize insurance recoveries when they are probable of receipt and present them in our Income Statements in the same caption as the related expense, up to the amount of total expense incurred in prior and current periods. We present expenses and insurance recoveries related to the Data Security Incident in either the “Reimbursed expenses” or “Restructuring and merger-related charges” captions of our Income Statements.
Litigation, Claims, and Government Investigations
Following our announcement of the Data Security Incident, approximately 100 lawsuits were filed by consumers and others against us in U.S. federal, U.S. state and Canadian courts related to the incident. All but one of the U.S. cases were consolidated and transferred to the U.S. District Court for the District of Maryland, pursuant to orders of the U.S. Judicial Panel on Multidistrict Litigation (the “MDL”). The plaintiffs in the U.S. and Canadian cases, who generally purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief. Among the U.S. cases consolidated in the MDL proceeding is a putative class action lawsuit that was filed against us and certain of our current officers and directors on December 1, 2018, alleging violations of the federal securities laws in connection with statements regarding our cybersecurity systems and controls, and seeking certification of a class of affected persons, unspecified monetary damages, costs and attorneys’ fees, and other related relief. The MDL proceeding also includes two shareholder derivative complaints that were filed on February 26, 2019 and March 15, 2019, respectively, against the Company, certain of its officers and certain current and former members of our Board of Directors, alleging, among other claims, breach of fiduciary duty, corporate waste, unjust enrichment, mismanagement and violations of the federal securities laws, and seeking unspecified monetary damages and restitution, changes to the Company’s corporate governance and internal procedures, costs and attorneys’ fees, and other related relief. A third shareholder derivative complaint was filed in the Delaware Court of Chancery on December 3, 2019 against the Company and certain of its officers and certain current and former members of our Board of Directors, alleging claims and seeking relief generally similar to the claims made and relief sought in the other two derivative cases. This case will not be consolidated with the MDL proceeding. We dispute the allegations in the lawsuits described above and are vigorously defending against such claims. We have filed motions to dismiss several of these cases, some of which have been denied, but the cases generally remain at an early stage. There has been some consolidation of the Canadian cases, with five cases now pending across five provinces, and we expect there could be further consolidation in the future. In addition, in April 2019, we received a letter purportedly on behalf of a shareholder of the Company (also one of the named plaintiffs in the putative securities class action described above) demanding that our Board of Directors take action against the Company’s current and certain former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising from the Data Security Incident. The Board of Directors has constituted a demand review committee to investigate the claims made in the demand letter, and the committee has retained independent counsel to assist with the investigation. The committee’s investigation is ongoing.
In addition, numerous U.S. federal, U.S. state and foreign governmental authorities are investigating, or otherwise seeking information and/or documents related to, the Data Security Incident and related matters, including Attorneys General offices from all 50 states and the District of Columbia, the Federal Trade Commission, the Securities and Exchange Commission, certain committees of the U.S. Senate and House of Representatives, the Information Commissioner’s Office in the United Kingdom (the “ICO”) as lead supervisory authority in the European Economic Area, and regulatory authorities in various other jurisdictions. In July 2019, the ICO issued a formal notice of intent under the U.K. Data Protection Act 2018 proposing a fine in the amount of £99 million against the Company in relation to the Data Security Incident (the “Proposed ICO Fine”). In late August 2019, we submitted a written response to the ICO vigorously defending our position, and we have continued to engage with the ICO regarding the Data Security Incident and Proposed ICO Fine. We mutually agreed with the ICO to an extension of the regulatory process until September 30, 2020 and the ICO proceeding is ongoing. Our accrual for this loss contingency, which we present in the “Accrued expenses and other” caption of our Balance Sheets, of $65 million at December 31, 2019, remained unchanged at June 30, 2020.
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While we believe it is reasonably possible that we may incur additional losses associated with the above described proceedings and investigations related to the Data Security Incident, it is not possible to estimate the amount of loss or range of loss, if any, in excess of the amounts already incurred that might result from adverse judgments, settlements, fines, penalties, or other resolution of these proceedings and investigations based on the current stage of these proceedings and investigations, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and/or the lack of resolution of significant factual and legal issues.
NOTE 8. LEASES
The following table presents our future minimum lease payments as of June 30, 2020:
($ in millions)Operating LeasesFinance Leases
2020, remaining
$91  $6  
2021173  13  
2022168  13  
2023117  14  
2024108  14  
Thereafter586  151  
Total minimum lease payments$1,243  $211  
Less: Amount representing interest(272) (56) 
Present value of minimum lease payments
$971  $155  
Current (1)
141  7  
Noncurrent (2)
830  148  
$971  $155  
(1)Operating leases recorded in the “Accrued expenses and other” and finance leases recorded in the “Current portion of long-term debt” captions of our Balance Sheets.
(2)Operating leases recorded in the “Operating lease liabilities” and finance leases recorded in the “Long-term debt” captions of our Balance Sheets.
As of June 30, 2020, we had entered into an agreement that we expect to account for as an operating lease with a 20-year term for our new headquarters office, which is not reflected in our Balance Sheets or in the table above as the lease has not commenced.
We recorded impairment charges for right-of-use assets and property and equipment, including leasehold improvements, of $15 million in the 2020 second quarter and $105 million in the 2020 first half in the “Depreciation, amortization, and other” caption of our Income Statements relating to the impact of COVID-19 on several North America leased hotels. We determined that we may not be able to fully recover the carrying amount of these North America hotel leases after evaluating the assets for recovery due to declines in market performance and future cash flow projections. We estimated the fair value using an income approach reflecting internally developed Level 3 discounted cash flows that included, among other things, our expectations of future cash flows based on historical experience and projected growth rates, usage estimates, and demand trends.

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NOTE 9. LONG-TERM DEBT
We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table at the end of the 2020 second quarter and year-end 2019:
At Period End
($ in millions)June 30,
2020
December 31,
2019
Senior Notes:
Series L Notes, interest rate of 3.3%, face amount of $173, maturing September 15, 2022
(effective interest rate of 3.4%)
173  349  
Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020
(effective interest rate of 3.6%)
350  349  
Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021
(effective interest rate of 3.4%)
399  398  
Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021
(effective interest rate of 3.1%)
449  449  
Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025
(effective interest rate of 4.0%)
346  346  
Series Q Notes, interest rate of 2.3%, face amount of $399, maturing January 15, 2022
(effective interest rate of 2.5%)
398  747  
Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026
(effective interest rate of 3.3%)
745  744  
Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023
(effective interest rate of 3.1%)
291  291  
Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025
(effective interest rate of 2.8%)
331  332  
Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034
(effective interest rate of 4.1%)
291  291  
Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028
(effective interest rate of 4.2%)
444  444  
Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020
(effective interest rate of 1.0% at June 30, 2020)
549  549  
Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023
(effective interest rate of 4.4%)
348  347  
Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028
(effective interest rate of 4.8%)
297  297  
Series BB Notes, floating rate, face amount of $300, maturing March 8, 2021
(effective interest rate of 1.0% at June 30, 2020)
299  299  
Series CC Notes, interest rate of 3.6%, face amount of $550, maturing April 15, 2024
(effective interest rate of 3.9%)
593  564  
Series DD Notes, interest rate of 2.1%, face amount of $224, maturing October 3, 2022
(effective interest rate of 1.2%)
229  543  
Series EE Notes, interest rate of 5.8%, face amount of $1,600, maturing May 1, 2025
(effective interest rate of 6.0%)
1,581    
Series FF Notes, interest rate of 4.6%, face amount of $1,000, maturing June 15, 2030
(effective interest rate of 4.8%)
985    
Commercial paper817  3,197  
Credit Facility1,550    
Finance lease obligations 155  157  
Other178  247  
$11,798  $10,940  
Less current portion(1,665) (977) 
$10,133  $9,963  

We paid cash for interest, net of amounts capitalized, of $186 million in the 2020 first half and $176 million in the 2019 first half.
We are party to a multicurrency revolving credit agreement (as amended, the “Credit Facility”) that provides for up to $4.5 billion of aggregate effective borrowings to support our commercial paper program and general
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corporate needs, including working capital, capital expenditures, letters of credit, and acquisitions. Borrowings under the Credit Facility generally bear interest at LIBOR (the London Interbank Offered Rate) plus a spread based on our public debt rating. We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating. We classify outstanding borrowings under the Credit Facility and outstanding commercial paper borrowings as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis. The Credit Facility expires on June 28, 2024.
We borrowed $2.5 billion under the Credit Facility in March 2020 and another $2.0 billion in early April 2020, resulting in the Credit Facility being fully drawn as of April 2, 2020, with a total of $4.5 billion outstanding. Our borrowings under the Credit Facility were to increase our cash position and preserve financial flexibility in light of the impact on global markets resulting from COVID-19. We have since repaid a portion of those borrowings, reducing the total outstanding borrowings under the Credit Facility to $1.55 billion as of June 30, 2020. Remaining proceeds from the Credit Facility borrowings may be used to repay commercial paper when it matures and for general corporate or other purposes permitted by the Credit Facility.
In April 2020, we entered into an amendment to the Credit Facility. The amendment waives the quarterly-tested leverage covenant in the Credit Facility through and including the first quarter of 2021 (which waiver period may end sooner at our election), adjusts the required leverage levels for the covenant when it is re-imposed at the end of the waiver period, and imposes a new monthly-tested liquidity covenant for the duration of the waiver period. The amendment also makes certain other amendments to the terms of the Credit Facility, including increasing the interest and fees payable on the Credit Facility for the duration of the period during which the waiver of the leverage covenant remains in effect, tightening certain existing covenants, and imposing additional covenants for the duration of the waiver period. These covenant changes include tightening the lien covenant and the covenant on dividends, share repurchases and distributions, and imposing new covenants limiting asset sales, investments and discretionary capital expenditures.
In April 2020, we issued $1.6 billion aggregate principal amount of 5.750 percent Series EE Notes due May 1, 2025 (the “Series EE Notes”). We will pay interest on the Series EE Notes in May and November of each year, commencing in November 2020. We received net proceeds of approximately $1.581 billion from the offering of the Series EE Notes, after deducting the underwriting discount and estimated expenses, which were made available for general corporate purposes.
In June 2020, we issued $1.0 billion aggregate principal amount of 4.625 percent Series FF Notes due June 15, 2030 (the “Series FF Notes”). We will pay interest on the Series FF Notes in June and December of each year, commencing in December 2020. We received net proceeds of approximately $985 million from the offering of the Series FF Notes, after deducting the underwriting discount and estimated expenses. We used the majority of these proceeds to repurchase Senior Notes with near term maturities, as further described below.
In June 2020, we completed a tender offer (the “Tender Offer”) and retired $853 million aggregate principal amount of our Senior Notes consisting of:
$351 million of our 2.3% Series Q Notes maturing January 15, 2022;
$176 million of our 3.3% Series L Notes maturing September 15, 2022; and
$326 million of our 2.1% Series DD Notes maturing October 3, 2022.
We used proceeds from our Series FF Notes offering to complete the repurchase of such notes, including the payment of accrued interest and other costs incurred.
In July 2020, we redeemed all $350 million aggregate principal amount of our Series M Notes due in October 2020.
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NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS
We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments, determined under current guidance for disclosures on the fair value of financial instruments, in the following table:
 June 30, 2020December 31, 2019
($ in millions)Carrying AmountFair ValueCarrying AmountFair Value
Senior, mezzanine, and other loans$148  $129  $117  $112  
Total noncurrent financial assets$148  $129  $117  $112  
Senior Notes$(7,451) $(7,673) $(6,441) $(6,712) 
Commercial paper / Credit Facility(2,367) (2,367) (3,197) (3,197) 
Other long-term debt(167) (162) (174) (179) 
Other noncurrent liabilities(179) (179) (196) (196) 
Total noncurrent financial liabilities$(10,164) $(10,381) $(10,008) $(10,284) 
The carrying value of our Credit Facility borrowings approximate fair value because they bear interest at a market rate. See Note 13. Fair Value of Financial Instruments and the “Fair Value Measurements” caption of Note 2. Summary of Significant Accounting Policies of our 2019 Form 10-K for more information on the input levels we use in determining fair value.
NOTE 11. ACCUMULATED OTHER COMPREHENSIVE LOSS AND SHAREHOLDERS’ EQUITY
The following tables detail the accumulated other comprehensive loss activity for the 2020 first half and 2019 first half:
($ in millions)Foreign Currency Translation AdjustmentsDerivative Instrument and Other AdjustmentsAccumulated Other Comprehensive Loss
Balance at year-end 2019$(368) $7  $(361) 
Other comprehensive (loss) income before reclassifications(250) 12  (238) 
Reclassification adjustments  (9) (9) 
Net other comprehensive (loss) income
(250) 3  (247) 
Balance at June 30, 2020$(618) $10  $(608) 
($ in millions)Foreign Currency Translation AdjustmentsDerivative Instrument and Other AdjustmentsAccumulated Other Comprehensive Loss
Balance at year-end 2018$