Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

During the year ended December 31, 2020, we recognized impairment losses of $104 million of goodwill, as a result of the full impairment of the goodwill attributable to our ownership reporting unit. See Note 11: "Fair Value Measurements" for additional information on the impairment analysis performed on goodwill and the resulting impairment losses recognized.

Our goodwill balances, by reporting unit, were as follows:

	Ownership		Management and Franchise		Total
	(in millions)
Balance as of December 31, 2018	$	99	$	5,061	$	5,160
Foreign currency translation	(1)		—		(1)
Balance as of December 31, 2019	98		5,061		5,159
Impairment losses	(104)		—		(104)
Foreign currency translation	6		34		40
Balance as of December 31, 2020	$	—	$	5,095	$	5,095

There were no accumulated impairment losses for the management and franchise reporting unit as of December 31, 2020, 2019 and 2018. The gross carrying values and accumulated impairment losses for the ownership reporting unit are as follows:

	Gross Carrying Value		Accumulated Impairment Losses		Net Carrying Value
	(in millions)
Balance as of December 31, 2018	$	439	$	(340)	$	99
Foreign currency translation	(1)		—		(1)
Balance as of December 31, 2019	438		(340)		98
Impairment losses	(444)		340		(104)
Foreign currency translation	6		—		6
Balance as of December 31, 2020	$	—	$	—	$	—

Intangible Assets

Changes to our brands intangible assets from December 31, 2019 to December 31, 2020 were due to foreign currency translations.

Finite-lived intangible assets were as follows:

	December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)(2)	$	317	$	(261)	$	56
Contract acquisition costs(3)	632		(144)		488
Development commissions and other	132		(23)		109
	$	1,081	$	(428)	$	653
Other intangible assets:
Leases(1)(4)	$	157	$	(95)	$	62
Capitalized software costs	522		(378)		144
Hilton Honors(1)	342		(282)		60
	$	1,021	$	(755)	$	266

	December 31, 2019
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,163	$	(1,974)	$	189
Contract acquisition costs	604		(121)		483
Development commissions and other	127		(19)		108
	$	2,894	$	(2,114)	$	780
Other intangible assets:
Leases(1)	$	290	$	(176)	$	114
Capitalized software costs	625		(399)		226
Hilton Honors(1)	338		(257)		81
Other(1)	34		(34)		—
	$	1,287	$	(866)	$	421

____________

(1)Represents intangible assets that were initially recorded at fair value as part of the Merger.

(2)During the year ended December 31, 2020, certain of the assets became fully amortized and, as a result, the gross carrying values and related accumulated amortization were written-off.

(3)During the year ended December 31, 2020, we recognized impairment losses of $15 million, which reduced the gross carrying value and accumulated amortization by $18 million and $3 million, respectively.

(4)During the year ended December 31, 2020, we recognized impairment losses of $46 million, which reduced the gross carrying value and accumulated amortization by $138 million and $92 million, respectively. See Note 11: "Fair Value Measurements" for additional information.

Amortization of our finite-lived intangible assets was as follows:

	Year Ended December 31,
	2020		2019		2018
	(in millions)
Recognized in depreciation and amortization expense(1)	$	274	$	286	$	271
Recognized as a reduction of franchise and licensing fees and base and other management fees	29		29		27

____________

(1)Includes amortization expense of $164 million, $202 million and $204 million for the years ended December 31, 2020, 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 finite-lived intangible assets as of December 31, 2020 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)
2021	$	131	$	29
2022	96		26
2023	63		26
2024	13		26
2025	9		25
Thereafter	119		356
	$	431	$	488