Amortizing Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Amortizing intangible assets were as follows:


	September 30, 2019
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger⁽¹⁾	$	2,226	$	(1,997)	$	229
Contract acquisition costs	573		(114)		459
Development commissions and other	124		(18)		106
	$	2,923	$	(2,129)	$	794

Other intangible assets:
Leases⁽¹⁾	$	279	$	(166)	$	113
Capitalized software costs	583		(377)		206
Hilton Honors⁽¹⁾	336		(251)		85
Other⁽¹⁾	34		(34)		—
	$	1,232	$	(828)	$	404


	December 31, 2018
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger⁽¹⁾	$	2,228	$	(1,873)	$	355
Contract acquisition costs	525		(101)		424
Development commissions and other	108		(15)		93
	$	2,861	$	(1,989)	$	872

Other intangible assets:
Leases⁽¹⁾	$	288	$	(161)	$	127
Capitalized software costs	503		(321)		182
Hilton Honors⁽¹⁾	338		(236)		102
Other⁽¹⁾	38		(34)		4
	$	1,167	$	(752)	$	415

____________

⁽¹⁾Represents intangible assets that were initially recorded at their fair value as part of the October 24, 2007 transaction whereby we became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. (formerly known as The Blackstone Group L.P.) (the "Merger").

Amortization of our amortizing intangible assets was as follows:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
	(in millions)
Recognized in depreciation and amortization expense⁽¹⁾	$	71	$	67	$	212	$	202
Recognized as a reduction of franchise and licensing fees and base and other management fees	7		6		21		20

____________

⁽¹⁾Includes amortization expense of $50 million for the three months ended September 30, 2019 and 2018, and $152 million and $153 million for the nine months ended September 30, 2019 and 2018, respectively, associated with assets that were initially recorded at their fair value at the time of the Merger.

We estimate future amortization of our amortizing intangible assets as of September 30, 2019 to be as follows:


	Recognized in Depreciation and Amortization Expense		Recognized as a Reduction of Franchise and Licensing Fees and Base and Other Management Fees
Year	(in millions)
2019 (remaining)	$	73	$	7
2020	264		27
2021	115		26
2022	93		24
2023	50		23
Thereafter	144		352
	$	739	$	459