We invest in debt and equity securities that we believe are strategically and operationally important to our business. These investments take the form of (i) equity method investments where we have the ability to significantly influence the operations of the entity, (ii) marketable securities held to fund operating programs and for investment purposes, and (iii) other types of investments.

During the nine months ended September 30, 2024, we recognized $10 million of impairment charges, primarily related to one of our unconsolidated hospitality ventures in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income as the estimated fair value was less than the carrying value, and the impairment was deemed other than temporary. We estimated the fair value of our investment, which is classified as Level Three in the hierarchy, using an internally-developed cash flow model, which included assumptions and judgments regarding projected future cash flows, discount rate, and capitalization rate.

Unconsolidated hospitality venture in India—During the three months ended September 30, 2023, we acquired 50% of the outstanding shares of a third-party entity that owns three of our managed properties in India in exchange for the non-cash redemption of a held-to-maturity ("HTM") debt security. Upon completion, one of our unconsolidated hospitality ventures in India acquired 100% of the outstanding shares of the entity, and we recorded a $32 million equity method investment.

On September 28, 2023, our unconsolidated hospitality venture publicly filed a draft red herring prospectus with the Securities and Exchange Board of India in conjunction with a proposed initial public offering ("IPO") of equity shares, subject to market conditions and regulatory approvals. On February 28, 2024, our unconsolidated hospitality venture completed its IPO on the BSE Limited and National Stock Exchange of India Limited stock exchanges and issued 50,000,000 equity shares. Both prior and subsequent to the IPO, we hold 86,251,192 equity shares in the entity. At September 30, 2024, the aggregate value of our equity shares was $376 million based on the price per share of the principal market.

As a result of the IPO, our ownership interest in the unconsolidated hospitality venture was diluted from 50.0% to 38.8%. As we maintain the ability to significantly influence the operations of the entity, we recorded an increase to our equity method investment and recognized a $79 million non-cash pre-tax dilution gain in equity earnings (losses) from unconsolidated hospitality ventures on our condensed consolidated statements of income during the nine months ended September 30, 2024.

UVC Transaction—During the nine months ended September 30, 2024, we completed the UVC Transaction and accounted for the sale of our controlling financial interest in the entity as a business disposition. We received $41 million of proceeds, net of $39 million of cash disposed; recorded a $20 million equity method investment representing the fair value of our retained investment in the entity; and recorded $86 million of guarantee liabilities as described below. The transaction resulted in a $231 million pre-tax gain, which was recognized in gains (losses) on sales of real estate and other on our condensed consolidated statements of income during the nine months ended September 30, 2024. We continue to manage the Unlimited Vacation Club business under a long-term management agreement and license and royalty agreement. The operating results of the Unlimited Vacation Club business prior to the UVC Transaction are reported within our distribution segment.

The fair value of our retained investment in the entity was determined using a Black-Scholes-Merton option-pricing model of our common shares in the entity. The valuation methodology includes assumptions and judgments regarding volatility and discount rates, which are primarily Level Three assumptions.

In conjunction with the transaction, we agreed to guarantee up to $70 million of our hospitality venture partner's investment upon the occurrence of certain events, and we recorded a $25 million guarantee liability at fair value in other long-term liabilities on our condensed consolidated balance sheet. The fair value was estimated using the with and without method, which includes projected cash flows based on contract terms. The valuation methodology includes assumptions and judgments regarding discount rates and length of time, which are primarily Level Three assumptions.

Additionally, we agreed to indemnify the unconsolidated hospitality venture, the primary obligor to the foreign taxing authorities, for obligations the entity may incur as a result of uncertain tax positions. Following the transaction, we accounted for the indemnification as a guarantee. We derecognized the long-term income taxes payable related to the uncertain tax positions and recorded a $61 million guarantee liability at fair value in other long-term liabilities on our condensed consolidated balance sheet. The fair value of the indemnification was estimated using a probability-based weighting approach to determine the likelihood of payment of the tax liability, penalties, and interest related to the 2013 through 2018 tax years. The valuation methodology includes assumptions and judgments regarding probability weighting, discount rates, and expected timing of cash flows, which are primarily Level Three assumptions. At September 30, 2024, the indemnification for open tax years had a maximum exposure of $75 million.

The entity that owns the Unlimited Vacation Club business is classified as a VIE in which we hold a variable interest but are not the primary beneficiary, and we account for our common ownership interest as an equity method investment. At September 30, 2024, we had $73 million recorded in other long-term liabilities (see Note 11) on our condensed consolidated balance sheet related to our guaranteed obligations of this unconsolidated VIE. At September 30, 2024, our maximum exposure to loss was $145 million, which includes the maximum exposure under the aforementioned guarantee and indemnification (see Note 13).

We hold marketable securities with readily determinable fair values to fund certain operating programs and for investment purposes. We periodically transfer available cash and cash equivalents to purchase marketable securities for investment purposes.


	September 30, 2024		December 31, 2023
Loyalty program (Note 9)	$	923	$	807
Deferred compensation plans held in rabbi trusts (Note 9 and Note 11)	547		489
Captive insurance company (Note 9)	110		94
Total marketable securities held to fund operating programs	$	1,580	$	1,390
Less: current portion of marketable securities held to fund operating programs included in cash and cash equivalents and short-term investments	(334)		(320)
Marketable securities held to fund operating programs included in other assets	$	1,246	$	1,070

•$490 million and $330 million, respectively, of available-for-sale ("AFS") debt securities with contractual maturity dates ranging from 2024 through 2069. The amortized cost of our AFS debt securities approximates fair value;


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Unrealized gains (losses), net
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts (1)	$	(5)	$	(10)	$	19	$	21
Revenues for reimbursed costs (2)	(3)		(4)		8		11
Other income (loss), net (Note 19)	6		(5)		7		—
Other comprehensive income (loss) (Note 14)	15		—		9		—

Realized gains (losses), net
Net gains (losses) and interest income from marketable securities held to fund rabbi trusts (1)	$	23	$	1	$	27	$	5
Revenues for reimbursed costs (2)	11		1		13		3
Other income (loss), net (Note 19)	—		(1)		—		(1)
(1) Unrealized and realized gains and losses recognized in net gains (losses) and interest income from marketable securities held to fund rabbi trusts are offset by amounts recognized in general and administrative expenses and owned and leased expenses with no impact on net income.
(2) Unrealized and realized gains and losses recognized in revenues for reimbursed costs related to investments held to fund rabbi trusts are offset by amounts recognized in reimbursed costs with no impact on net income.

Marketable Securities Held for Investment Purposes—Marketable securities held for investment purposes, which are recorded at cost or fair value, depending on the nature of the investment, on our condensed consolidated balance sheets, were as follows:


	September 30, 2024		December 31, 2023
Interest-bearing money market funds	$	314	$	284
Common shares in Playa N.V. (Note 9)	94		105
Time deposits (1)	40		11
Total marketable securities held for investment purposes	$	448	$	400
Less: current portion of marketable securities held for investment purposes included in cash and cash equivalents and short-term investments	(351)		(294)
Marketable securities held for investment purposes included in other assets	$	97	$	106
(1) Time deposits have contractual maturities on various dates through 2026. The amortized cost of our time deposits approximates fair value.

We hold common shares in Playa Hotels & Resorts N.V. ("Playa N.V."), which are accounted for as an equity security with a readily determinable fair value as we do not have the ability to significantly influence the operations of the entity. We did not sell any of these common shares during the nine months ended September 30, 2024 or September 30, 2023. Net unrealized gains (losses) recognized on our condensed consolidated statements of income were as follows:


	September 30, 2024		Cash and cash equivalents		Short-term investments		Other assets
Level One—Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds	$	622	$	622	$	—	$	—
Mutual funds and exchange-traded funds	553		—		—		553

Common shares	105		—		—		105
Level Two—Significant Other Observable Inputs

Time deposits	65		24		13		28
U.S. government obligations	324		—		6		318
U.S. government agencies	24		—		—		24
Corporate debt securities	274		—		20		254
Mortgage-backed securities	26		—		—		26
Asset-backed securities	31		—		—		31
Municipal and provincial notes and bonds	4		—		—		4



Total	$	2,028	$	646	$	39	$	1,343


	December 31, 2023		Cash and cash equivalents		Short-term investments		Other assets
Level One—Quoted Prices in Active Markets for Identical Assets
Interest-bearing money market funds	$	599	$	599	$	—	$	—
Mutual funds and exchange-traded funds	495		—		—		495
Common shares	114		—		—		114
Level Two—Significant Other Observable Inputs
Time deposits	36		—		10		26
U.S. government obligations	250		—		—		250
U.S. government agencies	37		—		—		37
Corporate debt securities	212		—		5		207
Mortgage-backed securities	19		—		—		19
Asset-backed securities	24		—		—		24
Municipal and provincial notes and bonds	4		—		—		4
Total	$	1,790	$	599	$	15	$	1,176

During the nine months ended September 30, 2024 and September 30, 2023, there were no transfers between levels of the fair value hierarchy. We do not have nonfinancial assets or nonfinancial liabilities required to be measured at fair value on a recurring basis.

HTM Debt Securities—We hold investments in third-party entities associated with certain of our hotels. The investments are redeemable on various dates through 2062 and recorded as HTM debt securities within other assets on our condensed consolidated balance sheets:


	September 30, 2024		December 31, 2023
HTM debt securities (1)	$	279	$	53
Less: allowance for credit losses	(9)		(13)
Total HTM debt securities, net of allowances	$	270	$	40
(1) At September 30, 2024, HTM debt securities included a $190 million preferred equity investment, net of a $36 million unamortized discount based on an imputed interest rate of 8.9% and a probability-weighted fair value adjustment related to our investment in the third-party entity that owns Hyatt Regency Orlando (see Note 7).


	2024		2023
Allowance at January 1	$	13	$	31
Provisions (reversals), net (1)	(2)		2
Write-offs	(2)		(3)
Allowance at June 30	$	9	$	30
Reversals, net (1)	—		(17)

Allowance at September 30	$	9	$	13




(1) Provisions for credit losses were partially or fully offset by interest income recognized in the same periods (see Note 19).

We estimated the fair value of these HTM debt securities to be approximately $272 million and $41 million at September 30, 2024 and December 31, 2023, respectively. The fair values of our preferred equity investments, which are classified as Level Three in the fair value hierarchy, are estimated using probability-based discounted future cash flow models based on current market inputs for similar types of arrangements. The primary sensitivity in these models is the selection of appropriate discount rates and probability weighting. Fluctuations in these assumptions could result in different estimates of fair value. The remaining HTM debt securities are classified as Level Two in the fair value hierarchy due to the use and weighting of multiple market inputs being considered in the final price of the security.

Convertible Debt Security—During the nine months ended September 30, 2023, we invested in a $30 million convertible debt security associated with a franchised property, which is classified as AFS and recorded in other assets on our condensed consolidated balance sheets. The investment has a contractual maturity date in 2029. The convertible debt investment is remeasured at fair value on a recurring basis and is classified as Level Three in the fair value hierarchy. We estimated the fair value of this investment to be $42 million and $39 million at September 30, 2024 and December 31, 2023, respectively. The fair value is estimated using a discounted future cash flow model, and the primary sensitivity in the model is the selection of an appropriate discount rate. Fluctuations in our assumptions could result in different estimates of fair value. Net unrealized gains recognized on our condensed consolidated financial statements were as follows:

Equity Securities Without a Readily Determinable Fair Value—At September 30, 2024 and December 31, 2023, we held $17 million and $16 million, respectively, of investments in equity securities without a readily determinable fair value, which are recorded within other assets on our condensed consolidated balance sheets and represent investments in entities where we do not have the ability to significantly influence the operations of the entity.