Contracts with Customers

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Contracts with Customers

CONTRACTS WITH CUSTOMERS

Our current and noncurrent Loyalty Program liability increased by $126 million, to $5,844 million at March 31, 2020, from $5,718 million at December 31, 2019, primarily reflecting an increase in points earned by members, partially offset by $462 million of revenue recognized in the 2020 first quarter, that was deferred as of December 31, 2019. The current portion of our Loyalty Program liability decreased compared to December 31, 2019 due to lower estimated redemptions in the short-term as a result of COVID-19.

In May 2020, we signed amendments to the existing agreements for our U.S.-issued co-brand credit cards associated with our Loyalty Program. These amendments provided the Company with $920 million of cash from the prepayment of certain future revenues, the early payment of a previously committed signing bonus, and the pre-purchase of Marriott Bonvoy points and other consideration. We will record the cash receipts in the deferred revenue and liability for guest loyalty program captions on our Balance Sheet. We will recognize revenue related to the license of our intellectual property as the credit cards are used and revenue related to the points and free night certificates as the points and free night certificates are redeemed. See the “Loyalty Program” caption of Note 2 of our 2019 Form 10-K for more information on our performance obligations.

We did not recognize incentive management fees in the 2020 first quarter because there is significant uncertainty as to whether we will be entitled to such fees on a full year basis due to the impact of COVID-19 on future hotel performance.