ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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52-2055918
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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10400 Fernwood Road, Bethesda, Maryland
(Address of principal executive offices)
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20817
(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller Reporting Company
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¨
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Page No.
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Part I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 1.
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Item 1A.
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Item 6.
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30, 2016
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September 30, 2015
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September 30, 2016
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September 30, 2015
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||||||||
REVENUES
|
|
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||||||||
Base management fees
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$
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180
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$
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170
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$
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538
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$
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526
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Franchise fees
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250
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227
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692
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652
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Incentive management fees
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81
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68
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276
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238
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Owned, leased, and other revenue
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279
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229
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771
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729
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||||
Cost reimbursements
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3,152
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2,884
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9,339
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8,635
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||||
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3,942
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3,578
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11,616
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10,780
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||||
OPERATING COSTS AND EXPENSES
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||||||||
Owned, leased, and other - direct
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194
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175
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533
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552
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||||
Reimbursed costs
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3,152
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2,884
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9,339
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8,635
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||||
Depreciation, amortization, and other
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36
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31
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97
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107
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General, administrative, and other
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161
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149
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470
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446
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Merger-related costs and charges
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228
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—
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250
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—
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||||
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3,771
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3,239
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10,689
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9,740
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OPERATING INCOME
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171
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339
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927
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1,040
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Gains and other income, net
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3
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—
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3
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20
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Interest expense
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(55
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)
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(43
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)
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(159
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)
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(121
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)
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||||
Interest income
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9
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5
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22
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19
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Equity in earnings
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3
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8
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8
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13
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INCOME BEFORE INCOME TAXES
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131
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309
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801
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971
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Provision for income taxes
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(61
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)
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(99
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)
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(265
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)
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(314
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)
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||||
NET INCOME
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$
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70
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$
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210
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$
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536
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$
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657
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EARNINGS PER SHARE
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Earnings per share - basic
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$
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0.26
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$
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0.80
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$
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2.08
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$
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2.43
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Earnings per share - diluted
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$
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0.26
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$
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0.78
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$
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2.04
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$
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2.38
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CASH DIVIDENDS DECLARED PER SHARE
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$
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0.30
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$
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0.25
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$
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0.85
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$
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0.70
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30, 2016
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September 30, 2015
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September 30, 2016
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September 30, 2015
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||||||||
Net income
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$
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70
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$
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210
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$
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536
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$
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657
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Other comprehensive income (loss):
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||||||||
Foreign currency translation adjustments
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2
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(28
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)
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27
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(47
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)
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Derivative instrument adjustments, net of tax
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1
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2
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(3
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)
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9
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Unrealized loss on available-for-sale securities, net of tax
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—
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(3
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)
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—
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(5
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)
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Reclassification of losses (gains), net of tax
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1
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(3
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)
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3
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(7
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)
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Total other comprehensive income (loss), net of tax
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4
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(32
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)
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27
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(50
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)
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Comprehensive income
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$
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74
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$
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178
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$
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563
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$
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607
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(Unaudited)
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September 30,
2016 |
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December 31,
2015 |
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ASSETS
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Current assets
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Cash and equivalents
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$
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1,078
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$
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96
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Accounts and notes receivable, net
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1,705
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1,103
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Prepaid expenses
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168
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77
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Other
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65
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30
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Assets held for sale
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771
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78
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3,787
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1,384
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Property and equipment, net
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2,411
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1,029
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Intangible assets
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Brands
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6,606
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197
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Contract acquisition costs and other
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3,442
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1,254
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Goodwill
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7,175
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943
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17,223
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2,394
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Equity and cost method investments
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830
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165
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Notes receivable, net
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240
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215
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Deferred tax assets
|
92
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672
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||
Other noncurrent assets
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419
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223
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||
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$
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25,002
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$
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6,082
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LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
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Current liabilities
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Current portion of long-term debt
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$
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316
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$
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300
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Accounts payable
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667
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593
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Accrued payroll and benefits
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1,136
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861
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Liability for guest loyalty programs
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1,860
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952
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Accrued expenses and other
|
1,250
|
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527
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5,229
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3,233
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Long-term debt
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8,506
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3,807
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Liability for guest loyalty programs
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2,538
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1,622
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Deferred tax liabilities
|
1,308
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17
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|
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Other noncurrent liabilities
|
1,580
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|
993
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Shareholders’ equity (deficit)
|
|
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||||
Class A Common Stock
|
5
|
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|
5
|
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Additional paid-in-capital
|
5,740
|
|
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2,821
|
|
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Retained earnings
|
6,375
|
|
|
4,878
|
|
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Treasury stock, at cost
|
(6,110
|
)
|
|
(11,098
|
)
|
||
Accumulated other comprehensive loss
|
(169
|
)
|
|
(196
|
)
|
||
|
5,841
|
|
|
(3,590
|
)
|
||
|
$
|
25,002
|
|
|
$
|
6,082
|
|
|
Nine Months Ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
536
|
|
|
$
|
657
|
|
Adjustments to reconcile to cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization, and other
|
97
|
|
|
107
|
|
||
Share-based compensation
|
117
|
|
|
84
|
|
||
Income taxes
|
1
|
|
|
120
|
|
||
Liability for guest loyalty programs
|
179
|
|
|
119
|
|
||
Merger-related charges
|
172
|
|
|
—
|
|
||
Working capital changes
|
(47
|
)
|
|
(77
|
)
|
||
Other
|
77
|
|
|
70
|
|
||
Net cash provided by operating activities
|
1,132
|
|
|
1,080
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Acquisition of a business, net of cash acquired
|
(2,412
|
)
|
|
(137
|
)
|
||
Capital expenditures
|
(132
|
)
|
|
(218
|
)
|
||
Dispositions
|
53
|
|
|
612
|
|
||
Loan advances
|
(24
|
)
|
|
(12
|
)
|
||
Loan collections
|
61
|
|
|
21
|
|
||
Contract acquisition costs
|
(55
|
)
|
|
(89
|
)
|
||
Redemption of debt security
|
—
|
|
|
121
|
|
||
Other
|
22
|
|
|
75
|
|
||
Net cash (used in) provided by investing activities
|
(2,487
|
)
|
|
373
|
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Commercial paper/Credit Facility, net
|
1,657
|
|
|
(274
|
)
|
||
Issuance of long-term debt
|
1,483
|
|
|
790
|
|
||
Repayment of long-term debt
|
(296
|
)
|
|
(7
|
)
|
||
Issuance of Class A Common Stock
|
22
|
|
|
39
|
|
||
Dividends paid
|
(257
|
)
|
|
(189
|
)
|
||
Purchase of treasury stock
|
(248
|
)
|
|
(1,821
|
)
|
||
Other
|
(24
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
2,337
|
|
|
(1,462
|
)
|
||
INCREASE (DECREASE) IN CASH AND EQUIVALENTS
|
982
|
|
|
(9
|
)
|
||
CASH AND EQUIVALENTS, beginning of period
|
96
|
|
|
104
|
|
||
CASH AND EQUIVALENTS, end of period
|
$
|
1,078
|
|
|
$
|
95
|
|
(1)
|
Goodwill is calculated as total consideration transferred, net of cash acquired, less identified net assets acquired, and it primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined operations. We have not completed the assignment of goodwill to our reporting units as of the date of this report, and it is not deductible for tax purposes.
|
|
|
Estimated Fair Value
(in millions)
|
|
Estimated Useful
Life (in years)
|
||
Brands
|
|
$
|
6,400
|
|
|
indefinite
|
Management and Operating Lease Agreements
|
|
1,394
|
|
|
20-30
|
|
Franchise Agreements
|
|
729
|
|
|
20-80
|
|
Loyalty Program Marketing Rights
|
|
50
|
|
|
25-30
|
|
|
|
$
|
8,573
|
|
|
|
($ in millions)
|
Operating Leases
|
|
Capital Leases
|
||||
2016, remaining
|
$
|
16
|
|
|
$
|
3
|
|
2017
|
64
|
|
|
11
|
|
||
2018
|
61
|
|
|
12
|
|
||
2019
|
57
|
|
|
12
|
|
||
2020
|
55
|
|
|
12
|
|
||
Thereafter
|
630
|
|
|
203
|
|
||
Total minimum lease payments
|
$
|
883
|
|
|
$
|
253
|
|
Less: amount representing interest
|
|
|
(86
|
)
|
|||
Present value of minimum lease payments
|
|
|
$
|
167
|
|
|
Nine Months Ended
|
||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
||||
Revenues
|
$
|
15,038
|
|
|
$
|
14,373
|
|
Net income
|
$
|
853
|
|
|
$
|
675
|
|
($ in millions)
|
|
September 23, 2016 -
September 30, 2016
|
||
Revenue
|
|
$
|
168
|
|
Net loss
|
|
$
|
(131
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Merger-related costs and charges
|
|
|
|
|
|
|
|
||||||||
Transaction costs
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
Employee termination costs
|
186
|
|
|
—
|
|
|
186
|
|
|
—
|
|
||||
Integration costs
|
24
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
|
228
|
|
|
—
|
|
|
250
|
|
|
—
|
|
||||
Interest expense
|
9
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
|
$
|
237
|
|
|
$
|
—
|
|
|
$
|
272
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions, except per share amounts)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Computation of Basic Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
70
|
|
|
$
|
210
|
|
|
$
|
536
|
|
|
$
|
657
|
|
Shares for basic earnings per share
|
266.2
|
|
|
262.2
|
|
|
258.3
|
|
|
270.7
|
|
||||
Basic earnings per share
|
$
|
0.26
|
|
|
$
|
0.80
|
|
|
$
|
2.08
|
|
|
$
|
2.43
|
|
Computation of Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
70
|
|
|
$
|
210
|
|
|
$
|
536
|
|
|
$
|
657
|
|
Shares for basic earnings per share
|
266.2
|
|
|
262.2
|
|
|
258.3
|
|
|
270.7
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Employee stock option and appreciation right plans
|
1.7
|
|
|
2.2
|
|
|
1.8
|
|
|
2.3
|
|
||||
Deferred stock incentive plans
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
|
0.6
|
|
||||
Restricted stock units and restricted stock
|
2.1
|
|
|
2.3
|
|
|
2.1
|
|
|
2.5
|
|
||||
Shares for diluted earnings per share
|
270.5
|
|
|
267.3
|
|
|
262.7
|
|
|
276.1
|
|
||||
Diluted earnings per share
|
$
|
0.26
|
|
|
$
|
0.78
|
|
|
$
|
2.04
|
|
|
$
|
2.38
|
|
Expected volatility
|
30.4%
|
Dividend yield
|
1.3%
|
Risk-free rate
|
1.7 - 1.8%
|
Expected term (in years)
|
8 - 10
|
($ in millions)
Guarantee Type
|
Maximum Potential Amount of Future Fundings
|
|
Recorded Liability for Guarantees
|
||||
Debt service
|
$
|
122
|
|
|
$
|
22
|
|
Operating profit
|
121
|
|
|
37
|
|
||
Other
|
8
|
|
|
1
|
|
||
Total guarantees where we are the primary obligor
|
$
|
251
|
|
|
$
|
60
|
|
•
|
$48 million
of guarantees for Senior Living Services, consisting of lease obligations of
$35 million
(expiring in
2019
) and lifecare bonds of
$13 million
(estimated to expire in
2019
), for which we are secondarily liable. Sunrise Senior Living, Inc. (“Sunrise”) is the primary obligor on both the leases and
$2 million
of the lifecare bonds; HCP, Inc., as successor by merger to CNL Retirement Properties, Inc. (“CNL”), is the primary obligor on the remaining
$11 million
of the lifecare bonds. Before we sold the Senior Living Services business in
2003
, these were our guarantees of obligations of our then consolidated Senior Living Services subsidiaries. Sunrise and CNL have indemnified us for any fundings we may be called upon to make under these guarantees. Our liability for these guarantees had a carrying value of
$2 million
at
September 30, 2016
. In conjunction with our consent of the 2011 extension of certain lease obligations until
2018
, Sunrise provided us with
$1 million
of cash collateral and an
$85 million
letter of credit issued by Key Bank to secure our continued exposure under the lease guarantees during the extension term and certain other obligations of Sunrise. The letter of credit balance was
$45 million
at the end of the
2016 third quarter
. During the extension term, Sunrise agreed to make an annual payment to us from the cash flow of the continuing lease facilities, subject to a
$1 million
annual minimum. In the 2013 first quarter, Sunrise merged with Health Care REIT, Inc. (“HCN”), and Sunrise’s management business was acquired by an entity formed by affiliates of Kohlberg Kravis Roberts & Co. LP, Beecken Petty O’Keefe & Co., Coastwood Senior Housing Partners LLC, and HCN. In April of 2014, HCN and Revera Inc., a private provider of senior living services, acquired Sunrise’s management business.
|
•
|
Lease obligations, for which we became secondarily liable when we acquired the Renaissance Hotel Group N.V. in
1997
, consisting of annual rent payments of approximately
$4 million
and total remaining rent payments through the initial term of approximately
$16 million
. The majority of these obligations expire by the end of
2020
. CTF Holdings Ltd. (“CTF”) had originally provided
€35 million
in cash collateral in the event that we are required to fund under such guarantees, approximately
$2 million
(
€2 million
) of which remained at
September 30, 2016
. Our exposure for the remaining rent payments through the initial term will decline to the extent that CTF obtains releases from the landlords or these hotels exit our system. Since the time we assumed these guarantees, we have not funded any amounts, and we do not expect to fund any amounts under these guarantees in the future.
|
•
|
A guarantee relating to the timeshare business, which was outstanding at the time of the 2011 Timeshare spin-off and for which we became secondarily liable as part of the spin-off. The guarantee relates to a Marriott Vacations Worldwide Corporation (“MVW”) payment obligation, for which we had an exposure of
$4 million
(
5 million
Singapore Dollars) at
September 30, 2016
. MVW has indemnified us for this obligation, which we expect will expire in
2022
. We have not funded any amounts under this obligation, and do not expect to do so in the future. Our liability for this obligation had a carrying value of
$1 million
at
September 30, 2016
.
|
•
|
A guarantee for a lease, originally entered into in 2000, for which we became secondarily liable in 2012 as a result of our sale of the ExecuStay corporate housing business to Oakwood Worldwide (“Oakwood”). Oakwood has indemnified us for the obligations under this guarantee. Our total exposure at the end of the
2016 third quarter
for this guarantee was
$6 million
in future rent payments through the end of the lease in 2019.
|
•
|
Commitments to invest up to
$9 million
of equity for non-controlling interests in joint ventures. We expect to fund
$2 million
of these commitments over the next 12 months. We do not expect to fund the remaining
$7 million
of these commitments, most of which expire in 2019.
|
•
|
We have a right and under certain circumstances an obligation to acquire our joint venture partner’s remaining interests in
two
joint ventures over the next
five years
at a price based on the performance of the ventures. In conjunction with this contingent obligation, we advanced
$20 million
(
€15 million
) in deposits,
$13 million
(
€11 million
) of which are remaining. The amounts on deposit are refundable to the extent we do not acquire our joint venture partner’s remaining interests.
|
•
|
Various loan commitments totaling
$58 million
, of which we expect to fund
$10 million
in 2016,
$28 million
in 2017, and
$20 million
thereafter.
|
•
|
Various commitments to purchase information technology hardware, software, accounting, finance, and maintenance services in the normal course of business totaling
$477 million
. We expect to purchase goods and services subject to these commitments as follows:
$58 million
in
2016
,
$157 million
in
2017
,
$115 million
in
2018
, and
$147 million
thereafter. The increase in purchase commitments compared to year-end 2015 is primarily due to the consolidation of $
353 million
of Starwood’s purchase commitments. We are evaluating the contractual nature of such commitments.
|
•
|
Several commitments aggregating
$41 million
, which we do not expect to fund.
|
|
At Period End
|
||||||
($ in millions)
|
September 30,
2016 |
|
December 31,
2015 |
||||
Senior Notes:
|
|
|
|
||||
Series H Notes, interest rate of 6.2%, face amount of $289, matured June 15, 2016
(effective interest rate of 6.3%) |
$
|
—
|
|
|
$
|
289
|
|
Series I Notes, interest rate of 6.4%, face amount of $293, maturing June 15, 2017
(effective interest rate of 6.5%) |
293
|
|
|
293
|
|
||
Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019
(effective interest rate of 4.4%)
|
596
|
|
|
595
|
|
||
Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022
(effective interest rate of 3.4%)
|
348
|
|
|
348
|
|
||
Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020
(effective interest rate of 3.6%) |
347
|
|
|
347
|
|
||
Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021
(effective interest rate of 3.4%) |
396
|
|
|
395
|
|
||
Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021
(effective interest rate of 3.1%) |
446
|
|
|
446
|
|
||
Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025
(effective interest rate of 4.0%)
|
344
|
|
|
343
|
|
||
Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022
(effective interest rate of 2.5%) |
742
|
|
|
—
|
|
||
Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026
(effective interest rate of 3.3%) |
742
|
|
|
—
|
|
||
Commercial paper
|
1,599
|
|
|
938
|
|
||
Credit Facility
|
989
|
|
|
—
|
|
||
Other
|
105
|
|
|
113
|
|
||
Starwood debt:
|
|
|
|
||||
2018 Senior Notes, interest rate of 6.8%, face amount $371, maturing May 15, 2018
(effective interest rate of 1.6%) |
403
|
|
|
—
|
|
||
2019 Senior Notes, interest rate of 7.2%, face amount $210, maturing December 1, 2019
(effective interest rate of 2.2%) |
245
|
|
|
—
|
|
||
2023 Senior Notes, interest rate of 3.1%, face amount $350, maturing February 15, 2023
(effective interest rate of 3.1%) |
350
|
|
|
—
|
|
||
2025 Senior Notes, interest rate of 3.8%, face amount $350, maturing March 15, 2025
(effective interest rate of 2.8%) |
375
|
|
|
—
|
|
||
2034 Senior Notes, interest rate of 4.5%, face amount $300, maturing October 1, 2034
(effective interest rate of 4.1%) |
317
|
|
|
—
|
|
||
Capital lease obligations
|
167
|
|
|
—
|
|
||
Mortgages and other, interest rates ranging from non-interest bearing to 3.7%, various maturities
|
18
|
|
|
—
|
|
||
|
8,822
|
|
|
4,107
|
|
||
Less: Current portion of long-term debt
|
(316
|
)
|
|
(300
|
)
|
||
|
$
|
8,506
|
|
|
$
|
3,807
|
|
Debt Principal Payments ($ in millions)
|
|
Amount
|
||
2016, remaining
|
|
$
|
17
|
|
2017
|
|
305
|
|
|
2018
|
|
416
|
|
|
2019
|
|
856
|
|
|
2020
|
|
363
|
|
|
Thereafter
|
|
6,865
|
|
|
Balance at September 30, 2016
|
|
$
|
8,822
|
|
|
At Period End
|
||||||
($ in millions)
|
September 30,
2016 |
|
December 31,
2015 |
||||
Senior, mezzanine, and other loans
|
$
|
246
|
|
|
$
|
221
|
|
Less current portion
|
(6
|
)
|
|
(6
|
)
|
||
|
$
|
240
|
|
|
$
|
215
|
|
Notes Receivable Principal Repayments (net of reserves and unamortized discounts) and Interest Rates
($ in millions)
|
|
Amount
|
||
2016, remaining
|
|
$
|
4
|
|
2017
|
|
4
|
|
|
2018
|
|
74
|
|
|
2019
|
|
16
|
|
|
2020
|
|
17
|
|
|
Thereafter
|
|
131
|
|
|
Balance at September 30, 2016
|
|
$
|
246
|
|
Weighted average interest rate at September 30, 2016
|
|
6.8%
|
|
|
Range of stated interest rates at September 30, 2016
|
|
0 - 18%
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
($ in millions)
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
Senior, mezzanine, and other loans
|
$
|
240
|
|
|
$
|
226
|
|
|
$
|
215
|
|
|
$
|
209
|
|
Marketable securities
|
30
|
|
|
30
|
|
|
37
|
|
|
37
|
|
||||
Total noncurrent financial assets
|
$
|
270
|
|
|
$
|
256
|
|
|
$
|
252
|
|
|
$
|
246
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
$
|
(5,650
|
)
|
|
$
|
(5,828
|
)
|
|
$
|
(2,766
|
)
|
|
$
|
(2,826
|
)
|
Commercial paper/ Credit Facility
|
(2,588
|
)
|
|
(2,588
|
)
|
|
(938
|
)
|
|
(938
|
)
|
||||
Other long-term debt
|
(100
|
)
|
|
(111
|
)
|
|
(99
|
)
|
|
(108
|
)
|
||||
Other noncurrent liabilities
|
(63
|
)
|
|
(63
|
)
|
|
(63
|
)
|
|
(63
|
)
|
||||
Total noncurrent financial liabilities
|
$
|
(8,401
|
)
|
|
$
|
(8,590
|
)
|
|
$
|
(3,866
|
)
|
|
$
|
(3,935
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument Adjustments
|
|
Available-For-Sale Securities Unrealized Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at year-end 2015
|
$
|
(192
|
)
|
|
$
|
(8
|
)
|
|
$
|
4
|
|
|
$
|
(196
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
27
|
|
|
(3
|
)
|
|
—
|
|
|
24
|
|
||||
Reclassification of losses from accumulated other comprehensive loss
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Net other comprehensive income
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Balance at September 30, 2016
|
$
|
(165
|
)
|
|
$
|
(8
|
)
|
|
$
|
4
|
|
|
$
|
(169
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument Adjustments
|
|
Available-For-Sale Securities Unrealized Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at year-end 2014
|
$
|
(72
|
)
|
|
$
|
(9
|
)
|
|
$
|
11
|
|
|
$
|
(70
|
)
|
Other comprehensive (loss) income before reclassifications
(1)
|
(47
|
)
|
|
9
|
|
|
(5
|
)
|
|
(43
|
)
|
||||
Reclassification of losses (gains) from accumulated other comprehensive loss
|
3
|
|
|
(10
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Net other comprehensive loss
|
(44
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(50
|
)
|
||||
Balance at September 30, 2015
|
$
|
(116
|
)
|
|
$
|
(10
|
)
|
|
$
|
6
|
|
|
$
|
(120
|
)
|
(1)
|
Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature. These resulted in a loss of
$1 million
for the
2016 first three quarters
and a gain of
$33 million
for the
2015 first three quarters
.
|
(1)
|
Represents Marriott common stock and equity-based awards issued in the Starwood Combination, which also resulted in the depletion of our accumulated historical losses on reissuances of treasury stock in Retained Earnings.
|
•
|
North American Full-Service
, which includes The Ritz-Carlton, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Delta Hotels and Resorts, and Gaylord Hotels located in the United States and Canada;
|
•
|
North American Limited-Service
, which includes AC Hotels by Marriott, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, and Moxy Hotels properties located in the United States and Canada; and
|
•
|
International
, which includes The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Marriott Executive Apartments, AC Hotels by Marriott, Courtyard, Residence Inn, Fairfield Inn & Suites, Protea Hotels, and Moxy Hotels located outside the United States and Canada.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
North American Full-Service Segment
|
$
|
2,222
|
|
|
$
|
2,128
|
|
|
$
|
6,903
|
|
|
$
|
6,555
|
|
North American Limited-Service Segment
|
936
|
|
|
846
|
|
|
2,675
|
|
|
2,405
|
|
||||
International
|
545
|
|
|
532
|
|
|
1,672
|
|
|
1,623
|
|
||||
Total segment revenues
|
3,703
|
|
|
3,506
|
|
|
11,250
|
|
|
10,583
|
|
||||
Other unallocated corporate
|
239
|
|
|
72
|
|
|
366
|
|
|
197
|
|
||||
Total consolidated revenues
|
$
|
3,942
|
|
|
$
|
3,578
|
|
|
$
|
11,616
|
|
|
$
|
10,780
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
North American Full-Service Segment
|
$
|
148
|
|
|
$
|
126
|
|
|
$
|
506
|
|
|
$
|
424
|
|
North American Limited-Service Segment
|
193
|
|
|
180
|
|
|
539
|
|
|
510
|
|
||||
International
|
67
|
|
|
69
|
|
|
217
|
|
|
203
|
|
||||
Total segment profits
|
408
|
|
|
375
|
|
|
1,262
|
|
|
1,137
|
|
||||
Other unallocated corporate
|
(231
|
)
|
|
(28
|
)
|
|
(324
|
)
|
|
(64
|
)
|
||||
Interest expense, net of interest income
|
(46
|
)
|
|
(38
|
)
|
|
(137
|
)
|
|
(102
|
)
|
||||
Income taxes
|
(61
|
)
|
|
(99
|
)
|
|
(265
|
)
|
|
(314
|
)
|
||||
Net income
|
$
|
70
|
|
|
$
|
210
|
|
|
$
|
536
|
|
|
$
|
657
|
|
|
Managed
|
|
Franchised / Licensed
|
|
Owned/Leased
|
|
Other
(2)
|
|
Total
|
||||||||||||||||||||
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
||||||||||
Legacy-Marriott Brands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North American Full-Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marriott Hotels
|
130
|
|
|
67,427
|
|
|
208
|
|
|
64,821
|
|
|
4
|
|
|
2,102
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
134,350
|
|
JW Marriott
|
15
|
|
|
9,695
|
|
|
10
|
|
|
4,469
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
14,164
|
|
Renaissance Hotels
|
26
|
|
|
11,625
|
|
|
57
|
|
|
16,103
|
|
|
1
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
28,038
|
|
Autograph Collection Hotels
|
3
|
|
|
1,065
|
|
|
58
|
|
|
12,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
13,869
|
|
Delta Hotels and Resorts
|
25
|
|
|
6,764
|
|
|
12
|
|
|
3,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
9,784
|
|
Gaylord Hotels
|
5
|
|
|
8,098
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
8,098
|
|
The Ritz-Carlton
|
39
|
|
|
11,410
|
|
|
1
|
|
|
429
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
11,839
|
|
The Ritz-Carlton Residences
(1)
|
34
|
|
|
4,733
|
|
|
1
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
4,788
|
|
EDITION
|
2
|
|
|
567
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
567
|
|
EDITION Residences
(1)
|
1
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
25
|
|
Total North American Full-Service
|
280
|
|
|
121,409
|
|
|
347
|
|
|
101,701
|
|
|
5
|
|
|
2,412
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|
225,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North American Limited-Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Courtyard
|
256
|
|
|
40,821
|
|
|
673
|
|
|
89,786
|
|
|
19
|
|
|
2,816
|
|
|
—
|
|
|
—
|
|
|
948
|
|
|
133,423
|
|
Residence Inn
|
114
|
|
|
17,155
|
|
|
601
|
|
|
70,570
|
|
|
1
|
|
|
192
|
|
|
—
|
|
|
—
|
|
|
716
|
|
|
87,917
|
|
Fairfield Inn & Suites
|
5
|
|
|
1,324
|
|
|
807
|
|
|
73,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
812
|
|
|
74,543
|
|
SpringHill Suites
|
31
|
|
|
4,973
|
|
|
322
|
|
|
36,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353
|
|
|
41,965
|
|
TownePlace Suites
|
15
|
|
|
1,740
|
|
|
278
|
|
|
27,709
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
|
29,449
|
|
AC Hotels by Marriott
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
1,518
|
|
|
9
|
|
|
1,518
|
|
Moxy Hotels
|
—
|
|
|
—
|
|
|
2
|
|
|
294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
294
|
|
Total North American Limited-Service
|
421
|
|
|
66,013
|
|
|
2,683
|
|
|
298,570
|
|
|
20
|
|
|
3,008
|
|
|
9
|
|
|
1,518
|
|
|
3,133
|
|
|
369,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Marriott Hotels
|
150
|
|
|
42,184
|
|
|
43
|
|
|
12,582
|
|
|
4
|
|
|
1,445
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
56,211
|
|
JW Marriott
|
45
|
|
|
17,934
|
|
|
6
|
|
|
1,473
|
|
|
1
|
|
|
496
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
19,903
|
|
Marriott Executive Apartments
|
28
|
|
|
4,195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
4,195
|
|
Renaissance Hotels
|
50
|
|
|
16,207
|
|
|
25
|
|
|
6,956
|
|
|
3
|
|
|
749
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
23,912
|
|
Autograph Collection Hotels
|
3
|
|
|
584
|
|
|
36
|
|
|
9,473
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
348
|
|
|
44
|
|
|
10,405
|
|
The Ritz-Carlton
|
50
|
|
|
14,135
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
553
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
14,688
|
|
The Ritz-Carlton Residences
(1)
|
8
|
|
|
416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
416
|
|
The Ritz-Carlton Serviced Apartments
|
4
|
|
|
579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
579
|
|
EDITION
|
1
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
173
|
|
|
Managed
|
|
Franchised / Licensed
|
|
Owned/Leased
|
|
Other
(2)
|
|
Total
|
||||||||||||||||||||
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
||||||||||
Bulgari Hotels & Resorts
|
2
|
|
|
117
|
|
|
1
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
202
|
|
Bulgari Residences
(1)
|
1
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
Courtyard
|
75
|
|
|
15,892
|
|
|
54
|
|
|
10,411
|
|
|
3
|
|
|
644
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
26,947
|
|
Residence Inn
|
5
|
|
|
517
|
|
|
2
|
|
|
200
|
|
|
1
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
857
|
|
Fairfield Inn & Suites
|
7
|
|
|
1,070
|
|
|
2
|
|
|
386
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
1,456
|
|
AC Hotels by Marriott
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
10,886
|
|
|
85
|
|
|
10,886
|
|
Protea Hotels
|
36
|
|
|
4,093
|
|
|
51
|
|
|
3,548
|
|
|
10
|
|
|
1,601
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|
9,242
|
|
Moxy Hotels
|
—
|
|
|
—
|
|
|
4
|
|
|
800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
800
|
|
Total International
|
465
|
|
|
118,101
|
|
|
224
|
|
|
45,914
|
|
|
24
|
|
|
5,628
|
|
|
90
|
|
|
11,234
|
|
|
803
|
|
|
180,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Timeshare
(3)
|
—
|
|
|
—
|
|
|
62
|
|
|
13,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
13,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Legacy-Starwood Brands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sheraton
|
216
|
|
|
86,571
|
|
|
220
|
|
|
65,136
|
|
|
9
|
|
|
5,539
|
|
|
—
|
|
|
—
|
|
|
445
|
|
|
157,246
|
|
Westin
|
113
|
|
|
46,475
|
|
|
99
|
|
|
31,877
|
|
|
3
|
|
|
2,078
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|
80,430
|
|
Le Méridien
|
78
|
|
|
21,764
|
|
|
27
|
|
|
6,616
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
28,380
|
|
Luxury Collection
|
51
|
|
|
10,225
|
|
|
44
|
|
|
8,609
|
|
|
3
|
|
|
467
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
19,301
|
|
W
|
46
|
|
|
12,589
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
13,763
|
|
St. Regis
|
34
|
|
|
7,428
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
658
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
8,086
|
|
Tribute Portfolio
|
2
|
|
|
372
|
|
|
10
|
|
|
3,607
|
|
|
1
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
4,114
|
|
Four Points
|
61
|
|
|
14,784
|
|
|
163
|
|
|
25,253
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224
|
|
|
40,037
|
|
Aloft
|
23
|
|
|
5,808
|
|
|
91
|
|
|
13,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114
|
|
|
19,433
|
|
Element
|
2
|
|
|
368
|
|
|
20
|
|
|
2,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
3,367
|
|
Vistana Timeshare
(4)
|
—
|
|
|
—
|
|
|
22
|
|
|
7,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
7,682
|
|
Total Legacy-Starwood Brands
|
626
|
|
|
206,384
|
|
|
696
|
|
|
165,404
|
|
|
22
|
|
|
10,051
|
|
|
—
|
|
|
—
|
|
|
1,344
|
|
|
381,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
1,792
|
|
|
511,907
|
|
|
4,012
|
|
|
624,609
|
|
|
71
|
|
|
21,099
|
|
|
99
|
|
|
12,752
|
|
|
5,974
|
|
|
1,170,367
|
|
(1)
|
Represents projects where we manage the related owners’ association. We include residential products once they possess a certificate of occupancy.
|
(2)
|
We present results for all AC Hotels by Marriott properties and five International Autograph Collection properties in the “
Equity in earnings
” caption of our Income Statements.
|
(3)
|
Timeshare properties licensed by MVW under the Marriott Vacation Club, The Ritz-Carlton Destination Club, The Ritz-Carlton Residences, and Grand Residences by Marriott brand names. MVW’s property and room counts are reported on a period-end basis for the MVW quarter ended
September 16, 2016
and include products that are in active sales as well as those that are sold out.
|
(4)
|
Timeshare properties licensed by Vistana under the Sheraton Vacation Club, Westin Vacation Club, St. Regis, and Luxury Collection brand names.
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Base management fees
|
$
|
180
|
|
|
$
|
170
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
1
|
%
|
Franchise fees
|
250
|
|
|
227
|
|
|
23
|
|
|
8
|
|
|
15
|
|
|
7
|
%
|
|||||
Incentive management fees
|
81
|
|
|
68
|
|
|
13
|
|
|
4
|
|
|
9
|
|
|
13
|
%
|
|||||
|
511
|
|
|
465
|
|
|
46
|
|
|
20
|
|
|
26
|
|
|
|
||||||
Owned, leased, and other revenue
|
279
|
|
|
229
|
|
|
50
|
|
|
30
|
|
|
20
|
|
|
9
|
%
|
|||||
Cost reimbursements
|
3,152
|
|
|
2,884
|
|
|
268
|
|
|
118
|
|
|
150
|
|
|
5
|
%
|
|||||
|
$
|
3,942
|
|
|
$
|
3,578
|
|
|
$
|
364
|
|
|
$
|
168
|
|
|
$
|
196
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|||||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Base management fees
|
$
|
538
|
|
|
$
|
526
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
4
|
|
|
1
|
%
|
Franchise fees
|
692
|
|
|
652
|
|
|
40
|
|
|
8
|
|
|
32
|
|
|
5
|
%
|
|||||
Incentive management fees
|
276
|
|
|
238
|
|
|
38
|
|
|
4
|
|
|
34
|
|
|
14
|
%
|
|||||
|
1,506
|
|
|
1,416
|
|
|
90
|
|
|
20
|
|
|
70
|
|
|
|
||||||
Owned, leased, and other revenue
|
771
|
|
|
729
|
|
|
42
|
|
|
30
|
|
|
12
|
|
|
2
|
%
|
|||||
Cost reimbursements
|
9,339
|
|
|
8,635
|
|
|
704
|
|
|
118
|
|
|
586
|
|
|
7
|
%
|
|||||
|
$
|
11,616
|
|
|
$
|
10,780
|
|
|
$
|
836
|
|
|
$
|
168
|
|
|
$
|
668
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|||||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Owned, leased, and other revenue
|
$
|
279
|
|
|
$
|
229
|
|
|
$
|
50
|
|
|
$
|
30
|
|
|
$
|
20
|
|
|
9
|
%
|
Owned, leased, and other - direct expense
|
194
|
|
|
175
|
|
|
19
|
|
|
18
|
|
|
1
|
|
|
1
|
%
|
|||||
|
85
|
|
|
54
|
|
|
31
|
|
|
12
|
|
|
19
|
|
|
35
|
%
|
|||||
Depreciation, amortization, and other
|
36
|
|
|
31
|
|
|
5
|
|
|
4
|
|
|
1
|
|
|
3
|
%
|
|||||
General, administrative, and other
|
161
|
|
|
149
|
|
|
12
|
|
|
7
|
|
|
5
|
|
|
3
|
%
|
|
Nine Months Ended
|
|
|
|
|
|
|
|||||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Owned, leased, and other revenue
|
$
|
771
|
|
|
$
|
729
|
|
|
$
|
42
|
|
|
$
|
30
|
|
|
$
|
12
|
|
|
2
|
%
|
Owned, leased, and other - direct expense
|
533
|
|
|
552
|
|
|
(19
|
)
|
|
18
|
|
|
(37
|
)
|
|
(7
|
)%
|
|||||
|
238
|
|
|
177
|
|
|
61
|
|
|
12
|
|
|
49
|
|
|
28
|
%
|
|||||
Depreciation, amortization, and other
|
97
|
|
|
107
|
|
|
(10
|
)
|
|
4
|
|
|
(14
|
)
|
|
(13
|
)%
|
|||||
General, administrative, and other
|
470
|
|
|
446
|
|
|
24
|
|
|
7
|
|
|
17
|
|
|
4
|
%
|
|
Three Months Ended
|
|
|
|
|
|
|
|||||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Gains and other income, net
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
nm
|
|
Interest expense
|
(55
|
)
|
|
(43
|
)
|
|
12
|
|
|
1
|
|
|
11
|
|
|
26
|
%
|
|||||
Interest income
|
9
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
80
|
%
|
|||||
Equity in earnings
|
3
|
|
|
8
|
|
|
(5
|
)
|
|
1
|
|
|
(6
|
)
|
|
(75
|
)%
|
|||||
Provision for income taxes
|
(61
|
)
|
|
(99
|
)
|
|
(38
|
)
|
|
(36
|
)
|
|
(2
|
)
|
|
(2
|
)%
|
|
Nine Months Ended
|
|
|
|
|
|
|
|||||||||||||||
($ in millions)
|
September 30,
2016 |
|
September 30,
2015 |
|
Change 2016 vs. 2015
|
|
Change due to Starwood
|
|
Change Excluding Starwood Impact
|
|||||||||||||
Gains and other income, net
|
$
|
3
|
|
|
$
|
20
|
|
|
$
|
(17
|
)
|
|
$
|
(1
|
)
|
|
$
|
(16
|
)
|
|
(80
|
)%
|
Interest expense
|
(159
|
)
|
|
(121
|
)
|
|
38
|
|
|
1
|
|
|
37
|
|
|
31
|
%
|
|||||
Interest income
|
22
|
|
|
19
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
16
|
%
|
|||||
Equity in earnings
|
8
|
|
|
13
|
|
|
(5
|
)
|
|
1
|
|
|
(6
|
)
|
|
(46
|
)%
|
|||||
Provision for income taxes
|
(265
|
)
|
|
(314
|
)
|
|
(49
|
)
|
|
(36
|
)
|
|
(13
|
)
|
|
(4
|
)%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Net Income
|
$
|
70
|
|
|
$
|
210
|
|
|
$
|
536
|
|
|
$
|
657
|
|
Interest expense
|
55
|
|
|
43
|
|
|
159
|
|
|
121
|
|
||||
Tax Provision
|
61
|
|
|
99
|
|
|
265
|
|
|
314
|
|
||||
Depreciation and amortization
|
36
|
|
|
31
|
|
|
97
|
|
|
95
|
|
||||
Depreciation classified in Reimbursed costs
|
15
|
|
|
15
|
|
|
43
|
|
|
43
|
|
||||
Interest expense from unconsolidated joint ventures
|
1
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Depreciation and amortization from unconsolidated joint ventures
|
4
|
|
|
3
|
|
|
10
|
|
|
8
|
|
||||
EBITDA
|
242
|
|
|
402
|
|
|
1,113
|
|
|
1,240
|
|
||||
Merger-related costs and charges
|
228
|
|
|
—
|
|
|
250
|
|
|
—
|
|
||||
Gain on redemption of debt security
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||
Loss/ (gain) on dispositions of real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
EDITION impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Share-based compensation (including share-based compensation reimbursed by third-party owners)
|
36
|
|
|
29
|
|
|
95
|
|
|
84
|
|
||||
Starwood results for the eight days ended September 30, 2016
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
474
|
|
|
$
|
431
|
|
|
$
|
1,426
|
|
|
$
|
1,317
|
|
|
Comparable Company-Operated
North American Properties |
|
Comparable Systemwide
North American Properties |
|
||||||||||
Legacy-Marriott
|
Three Months Ended
September 30, 2016 |
|
Change vs.
Three Months Ended September 30, 2015 |
|
Three Months Ended
September 30, 2016 |
|
Change vs.
Three Months Ended September 30, 2015 |
|
||||||
North American Full-Service
|
|
|
|
|
|
|
|
|
||||||
Marriott Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
78.2
|
%
|
|
1.4
|
%
|
pts.
|
75.6
|
%
|
|
0.1
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
193.14
|
|
|
2.2
|
%
|
|
$
|
174.23
|
|
|
2.3
|
%
|
|
RevPAR
|
$
|
151.00
|
|
|
4.1
|
%
|
|
$
|
131.78
|
|
|
2.5
|
%
|
|
Renaissance Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
77.5
|
%
|
|
2.3
|
%
|
pts.
|
77.1
|
%
|
|
1.7
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
175.42
|
|
|
3.2
|
%
|
|
$
|
163.69
|
|
|
3.3
|
%
|
|
RevPAR
|
$
|
135.93
|
|
|
6.3
|
%
|
|
$
|
126.23
|
|
|
5.6
|
%
|
|
Autograph Collection Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
nm
|
|
|
nm
|
|
|
79.6
|
%
|
|
1.9
|
%
|
pts.
|
||
Average Daily Rate
|
nm
|
|
|
nm
|
|
|
$
|
219.94
|
|
|
2.5
|
%
|
|
|
RevPAR
|
nm
|
|
|
nm
|
|
|
$
|
175.01
|
|
|
5.1
|
%
|
|
|
The Ritz-Carlton
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
71.9
|
%
|
|
(1.0
|
)%
|
pts.
|
71.9
|
%
|
|
(1.0
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
324.94
|
|
|
2.8
|
%
|
|
$
|
324.94
|
|
|
2.8
|
%
|
|
RevPAR
|
$
|
233.60
|
|
|
1.4
|
%
|
|
$
|
233.60
|
|
|
1.4
|
%
|
|
Composite North American Full-Service
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
77.2
|
%
|
|
1.5
|
%
|
pts.
|
75.9
|
%
|
|
0.6
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
202.23
|
|
|
2.3
|
%
|
|
$
|
183.16
|
|
|
2.5
|
%
|
|
RevPAR
|
$
|
156.20
|
|
|
4.4
|
%
|
|
$
|
138.99
|
|
|
3.3
|
%
|
|
North American Limited-Service
|
|
|
|
|
|
|
|
|
||||||
Courtyard
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.0
|
%
|
|
0.1
|
%
|
pts.
|
76.7
|
%
|
|
(0.4
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
142.70
|
|
|
1.6
|
%
|
|
$
|
141.21
|
|
|
1.7
|
%
|
|
RevPAR
|
$
|
108.40
|
|
|
1.8
|
%
|
|
$
|
108.28
|
|
|
1.2
|
%
|
|
Residence Inn
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
83.4
|
%
|
|
1.6
|
%
|
pts.
|
83.6
|
%
|
|
(0.1
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
153.61
|
|
|
3.9
|
%
|
|
$
|
147.33
|
|
|
2.7
|
%
|
|
RevPAR
|
$
|
128.13
|
|
|
5.8
|
%
|
|
$
|
123.15
|
|
|
2.6
|
%
|
|
Fairfield Inn & Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
nm
|
|
|
nm
|
|
|
75.6
|
%
|
|
(0.5
|
)%
|
pts.
|
||
Average Daily Rate
|
nm
|
|
|
nm
|
|
|
$
|
115.04
|
|
|
1.9
|
%
|
|
|
RevPAR
|
nm
|
|
|
nm
|
|
|
$
|
86.98
|
|
|
1.2
|
%
|
|
|
TownePlace Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
81.1
|
%
|
|
3.0
|
%
|
pts.
|
79.5
|
%
|
|
(0.3
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
113.72
|
|
|
5.3
|
%
|
|
$
|
108.73
|
|
|
3.1
|
%
|
|
RevPAR
|
$
|
92.21
|
|
|
9.5
|
%
|
|
$
|
86.43
|
|
|
2.7
|
%
|
|
SpringHill Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
79.7
|
%
|
|
0.6
|
%
|
pts.
|
78.6
|
%
|
|
(0.1
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
125.63
|
|
|
2.8
|
%
|
|
$
|
124.29
|
|
|
1.8
|
%
|
|
RevPAR
|
$
|
100.12
|
|
|
3.6
|
%
|
|
$
|
97.71
|
|
|
1.7
|
%
|
|
Composite North American Limited-Service
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
78.3
|
%
|
|
0.6
|
%
|
pts.
|
78.6
|
%
|
|
(0.3
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
143.15
|
|
|
2.3
|
%
|
|
$
|
133.55
|
|
|
2.1
|
%
|
|
RevPAR
|
$
|
112.07
|
|
|
3.2
|
%
|
|
$
|
104.91
|
|
|
1.7
|
%
|
|
Composite North American - All
(1)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
77.7
|
%
|
|
1.1
|
%
|
pts.
|
77.6
|
%
|
|
—
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
176.39
|
|
|
2.4
|
%
|
|
$
|
150.08
|
|
|
2.4
|
%
|
|
RevPAR
|
$
|
137.05
|
|
|
3.9
|
%
|
|
$
|
116.53
|
|
|
2.4
|
%
|
|
(1)
|
Excludes Delta Hotels and Resorts and Moxy Hotels as no properties under those brands met our definition of comparable.
|
|
Comparable Company-Operated
Properties |
|
Comparable Systemwide
Properties |
|
||||||||||
Legacy-Marriott
|
Three Months Ended
September 30, 2016 |
|
Change vs.
Three Months Ended September 30, 2015 |
|
Three Months Ended
September 30, 2016 |
|
Change vs.
Three Months Ended September 30, 2015 |
|
||||||
International
|
|
|
|
|
|
|
|
|
||||||
Caribbean and Latin America
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
70.4
|
%
|
|
2.0
|
%
|
pts.
|
68.0
|
%
|
|
—
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
207.25
|
|
|
7.2
|
%
|
|
$
|
191.91
|
|
|
2.8
|
%
|
|
RevPAR
|
$
|
145.82
|
|
|
10.3
|
%
|
|
$
|
130.54
|
|
|
2.9
|
%
|
|
Europe
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
77.1
|
%
|
|
(1.4
|
)%
|
pts.
|
76.4
|
%
|
|
(0.7
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
150.47
|
|
|
1.7
|
%
|
|
$
|
147.11
|
|
|
1.7
|
%
|
|
RevPAR
|
$
|
116.07
|
|
|
(0.1
|
)%
|
|
$
|
112.44
|
|
|
0.7
|
%
|
|
Middle East and Africa
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
64.5
|
%
|
|
4.6
|
%
|
pts.
|
63.5
|
%
|
|
3.2
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
126.34
|
|
|
(2.6
|
)%
|
|
$
|
120.68
|
|
|
(0.9
|
)%
|
|
RevPAR
|
$
|
81.48
|
|
|
4.8
|
%
|
|
$
|
76.58
|
|
|
4.5
|
%
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.0
|
%
|
|
4.7
|
%
|
pts.
|
76.7
|
%
|
|
4.1
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
137.23
|
|
|
(0.8
|
)%
|
|
$
|
150.19
|
|
|
(0.5
|
)%
|
|
RevPAR
|
$
|
104.27
|
|
|
5.7
|
%
|
|
$
|
115.25
|
|
|
5.2
|
%
|
|
Total International
(2)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
73.5
|
%
|
|
2.4
|
%
|
pts.
|
72.9
|
%
|
|
1.5
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
146.90
|
|
|
0.7
|
%
|
|
$
|
151.00
|
|
|
0.8
|
%
|
|
RevPAR
|
$
|
108.00
|
|
|
4.0
|
%
|
|
$
|
110.14
|
|
|
2.9
|
%
|
|
Total Worldwide
(3)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.1
|
%
|
|
1.6
|
%
|
pts.
|
76.7
|
%
|
|
0.3
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
165.78
|
|
|
1.8
|
%
|
|
$
|
150.26
|
|
|
2.1
|
%
|
|
RevPAR
|
$
|
126.22
|
|
|
4.0
|
%
|
|
$
|
115.27
|
|
|
2.5
|
%
|
|
(2)
|
Includes properties located outside of the United States and Canada for The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, AC Hotels by Marriott, Courtyard, Residence Inn, Fairfield Inn & Suites, Protea Hotels, and Moxy Hotels brands.
|
(3)
|
Includes properties worldwide for The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Gaylord Hotels, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, AC Hotels by Marriott, Protea Hotels, and Moxy Hotels brands.
|
|
Comparable Company-Operated
North American Properties |
|
Comparable Systemwide
North American Properties |
|
||||||||||
Legacy-Marriott
|
Nine Months Ended September 30, 2016
|
|
Change vs.
Nine Months Ended September 30, 2015 |
|
Nine Months Ended September 30, 2016
|
|
Change vs.
Nine Months Ended September 30, 2015 |
|
||||||
North-American Full-Service
|
|
|
|
|
|
|
|
|
||||||
Marriott Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
77.2
|
%
|
|
1.2
|
%
|
pts.
|
74.3
|
%
|
|
0.5
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
199.34
|
|
|
1.9
|
%
|
|
$
|
179.01
|
|
|
2.1
|
%
|
|
RevPAR
|
$
|
153.92
|
|
|
3.6
|
%
|
|
$
|
132.98
|
|
|
2.9
|
%
|
|
Renaissance Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
78.3
|
%
|
|
1.6
|
%
|
pts.
|
76.3
|
%
|
|
1.0
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
186.57
|
|
|
3.2
|
%
|
|
$
|
169.02
|
|
|
3.1
|
%
|
|
RevPAR
|
$
|
146.12
|
|
|
5.3
|
%
|
|
$
|
129.00
|
|
|
4.5
|
%
|
|
Autograph Collection Hotels
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
nm
|
|
|
nm
|
|
pts.
|
77.4
|
%
|
|
1.3
|
%
|
pts.
|
||
Average Daily Rate
|
nm
|
|
|
nm
|
|
|
$
|
226.80
|
|
|
1.6
|
%
|
|
|
RevPAR
|
nm
|
|
|
nm
|
|
|
$
|
175.50
|
|
|
3.4
|
%
|
|
|
The Ritz-Carlton
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
72.9
|
%
|
|
0.6
|
%
|
pts.
|
72.9
|
%
|
|
0.6
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
352.03
|
|
|
2.3
|
%
|
|
$
|
352.03
|
|
|
2.3
|
%
|
|
RevPAR
|
$
|
256.50
|
|
|
3.1
|
%
|
|
$
|
256.50
|
|
|
3.1
|
%
|
|
Composite North American Full-Service
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.7
|
%
|
|
1.3
|
%
|
pts.
|
74.7
|
%
|
|
0.7
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
211.71
|
|
|
2.1
|
%
|
|
$
|
189.75
|
|
|
2.3
|
%
|
|
RevPAR
|
$
|
162.42
|
|
|
3.9
|
%
|
|
$
|
141.77
|
|
|
3.3
|
%
|
|
North American Limited-Service
|
|
|
|
|
|
|
|
|
||||||
Courtyard
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
74.7
|
%
|
|
0.7
|
%
|
pts.
|
74.6
|
%
|
|
0.1
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
142.90
|
|
|
1.8
|
%
|
|
$
|
140.39
|
|
|
2.1
|
%
|
|
RevPAR
|
$
|
106.71
|
|
|
2.8
|
%
|
|
$
|
104.72
|
|
|
2.3
|
%
|
|
Residence Inn
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
80.3
|
%
|
|
0.7
|
%
|
pts.
|
80.5
|
%
|
|
(0.2
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
151.13
|
|
|
3.1
|
%
|
|
$
|
144.01
|
|
|
2.7
|
%
|
|
RevPAR
|
$
|
121.32
|
|
|
4.0
|
%
|
|
$
|
115.89
|
|
|
2.5
|
%
|
|
Fairfield Inn & Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
nm
|
|
|
nm
|
|
pts.
|
71.7
|
%
|
|
(0.6
|
)%
|
pts.
|
||
Average Daily Rate
|
nm
|
|
|
nm
|
|
|
$
|
111.93
|
|
|
2.0
|
%
|
|
|
RevPAR
|
nm
|
|
|
nm
|
|
|
$
|
80.21
|
|
|
1.1
|
%
|
|
|
TownePlace Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.1
|
%
|
|
1.1
|
%
|
pts.
|
76.6
|
%
|
|
0.3
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
108.18
|
|
|
4.1
|
%
|
|
$
|
106.49
|
|
|
2.6
|
%
|
|
RevPAR
|
$
|
82.37
|
|
|
5.6
|
%
|
|
$
|
81.54
|
|
|
3.1
|
%
|
|
SpringHill Suites
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
78.3
|
%
|
|
1.4
|
%
|
pts.
|
76.2
|
%
|
|
0.1
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
128.17
|
|
|
1.9
|
%
|
|
$
|
122.65
|
|
|
2.0
|
%
|
|
RevPAR
|
$
|
100.41
|
|
|
3.7
|
%
|
|
$
|
93.50
|
|
|
2.1
|
%
|
|
Composite North American Limited-Service
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.5
|
%
|
|
0.8
|
%
|
pts.
|
75.8
|
%
|
|
(0.1
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
142.71
|
|
|
2.2
|
%
|
|
$
|
131.55
|
|
|
2.3
|
%
|
|
RevPAR
|
$
|
109.13
|
|
|
3.2
|
%
|
|
$
|
99.68
|
|
|
2.2
|
%
|
|
Composite North American - All
(1)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
76.6
|
%
|
|
1.1
|
%
|
pts.
|
75.4
|
%
|
|
0.2
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
181.82
|
|
|
2.2
|
%
|
|
$
|
151.21
|
|
|
2.4
|
%
|
|
RevPAR
|
$
|
139.29
|
|
|
3.7
|
%
|
|
$
|
114.03
|
|
|
2.7
|
%
|
|
(1)
|
Excludes Delta Hotels and Resorts and Moxy Hotels as no properties under those brands met our definition of comparable.
|
|
Comparable Company-Operated
Properties |
|
Comparable Systemwide
Properties |
|
||||||||||
Legacy-Marriott
|
Nine Months Ended September 30, 2016
|
|
Change vs.
Nine Months Ended September 30, 2015 |
|
Nine Months Ended September 30, 2016
|
|
Change vs.
Nine Months Ended September 30, 2015 |
|
||||||
International
|
|
|
|
|
|
|
|
|
||||||
Caribbean and Latin America
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
72.0
|
%
|
|
0.1
|
%
|
pts.
|
68.5
|
%
|
|
—
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
239.07
|
|
|
4.4
|
%
|
|
$
|
215.85
|
|
|
2.3
|
%
|
|
RevPAR
|
$
|
172.08
|
|
|
4.5
|
%
|
|
$
|
147.87
|
|
|
2.3
|
%
|
|
Europe
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
72.7
|
%
|
|
(0.7
|
)%
|
pts.
|
70.6
|
%
|
|
(0.1
|
)%
|
pts.
|
||
Average Daily Rate
|
$
|
150.20
|
|
|
2.7
|
%
|
|
$
|
146.51
|
|
|
2.5
|
%
|
|
RevPAR
|
$
|
109.24
|
|
|
1.7
|
%
|
|
$
|
103.41
|
|
|
2.4
|
%
|
|
Middle East and Africa
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
65.1
|
%
|
|
1.1
|
%
|
pts.
|
64.1
|
%
|
|
0.6
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
143.28
|
|
|
(3.8
|
)%
|
|
$
|
135.56
|
|
|
(2.4
|
)%
|
|
RevPAR
|
$
|
93.31
|
|
|
(2.2
|
)%
|
|
$
|
86.83
|
|
|
(1.4
|
)%
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
73.9
|
%
|
|
4.4
|
%
|
pts.
|
74.7
|
%
|
|
3.9
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
143.73
|
|
|
(0.4
|
)%
|
|
$
|
151.72
|
|
|
0.4
|
%
|
|
RevPAR
|
$
|
106.29
|
|
|
5.9
|
%
|
|
$
|
113.31
|
|
|
6.0
|
%
|
|
Total International
(2)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
71.6
|
%
|
|
1.6
|
%
|
pts.
|
70.3
|
%
|
|
1.2
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
155.75
|
|
|
0.6
|
%
|
|
$
|
157.50
|
|
|
1.1
|
%
|
|
RevPAR
|
$
|
111.51
|
|
|
2.9
|
%
|
|
$
|
110.78
|
|
|
2.9
|
%
|
|
Total Worldwide
(3)
|
|
|
|
|
|
|
|
|
||||||
Occupancy
|
74.7
|
%
|
|
1.3
|
%
|
pts.
|
74.4
|
%
|
|
0.4
|
%
|
pts.
|
||
Average Daily Rate
|
$
|
172.51
|
|
|
1.7
|
%
|
|
$
|
152.39
|
|
|
2.1
|
%
|
|
RevPAR
|
$
|
128.94
|
|
|
3.4
|
%
|
|
$
|
113.39
|
|
|
2.7
|
%
|
|
(2)
|
Includes properties located outside of the United States and Canada for The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, AC Hotels by Marriott, Courtyard, Residence Inn, Fairfield Inn & Suites, Protea Hotels, and Moxy Hotels brands.
|
(3)
|
Includes properties worldwide for The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Gaylord Hotels, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, AC Hotels by Marriott, Protea Hotels, and Moxy Hotels brands.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
||||||||||||||||||
Segment revenues
|
$
|
2,222
|
|
|
$
|
2,128
|
|
|
$
|
94
|
|
|
4
|
%
|
|
$
|
6,903
|
|
|
$
|
6,555
|
|
|
$
|
348
|
|
|
5
|
%
|
Segment profits
|
$
|
148
|
|
|
$
|
126
|
|
|
$
|
22
|
|
|
17
|
%
|
|
$
|
506
|
|
|
$
|
424
|
|
|
$
|
82
|
|
|
19
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
||||||||||||||||||
Segment revenues
|
$
|
936
|
|
|
$
|
846
|
|
|
$
|
90
|
|
|
11
|
%
|
|
$
|
2,675
|
|
|
$
|
2,405
|
|
|
$
|
270
|
|
|
11
|
%
|
Segment profits
|
$
|
193
|
|
|
$
|
180
|
|
|
$
|
13
|
|
|
7
|
%
|
|
$
|
539
|
|
|
$
|
510
|
|
|
$
|
29
|
|
|
6
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
|
Change 2016 vs. 2015
|
||||||||||||||||||
Segment revenues
|
$
|
545
|
|
|
$
|
532
|
|
|
$
|
13
|
|
|
2
|
%
|
|
$
|
1,672
|
|
|
$
|
1,623
|
|
|
$
|
49
|
|
|
3
|
%
|
Segment profits
|
$
|
67
|
|
|
$
|
69
|
|
|
$
|
(2
|
)
|
|
(3
|
)%
|
|
$
|
217
|
|
|
$
|
203
|
|
|
$
|
14
|
|
|
7
|
%
|
|
|
|
Payments Due by Period
|
||||||||||||||||
($ in millions)
|
Total
|
|
Remainder of 2016
|
|
Years
2017 - 2018
|
|
Years
2019 - 2020
|
|
Thereafter
|
||||||||||
Debt
(1)
|
$
|
9,985
|
|
|
$
|
81
|
|
|
$
|
1,118
|
|
|
$
|
1,523
|
|
|
$
|
7,263
|
|
Capital lease obligations
(1)
|
259
|
|
|
3
|
|
|
25
|
|
|
26
|
|
|
205
|
|
|||||
Operating leases where we are the primary obligor
|
1,815
|
|
|
48
|
|
|
360
|
|
|
287
|
|
|
1,120
|
|
|||||
Purchase obligations
|
477
|
|
|
58
|
|
|
272
|
|
|
144
|
|
|
3
|
|
|||||
|
$
|
12,536
|
|
|
$
|
190
|
|
|
$
|
1,775
|
|
|
$
|
1,980
|
|
|
$
|
8,591
|
|
(1)
|
Includes principal as well as interest payments.
|
|
Maturities by Period
|
|
|
|
|
||||||||||||||||||||||||||
($ in millions)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
There-
after
|
|
Total
Carrying
Amount
|
|
Total
Fair
Value
|
||||||||||||||||
Assets
- Maturities represent expected principal receipts, fair values represent assets.
|
|||||||||||||||||||||||||||||||
Fixed-rate notes receivable
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
31
|
|
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
73
|
|
|
$
|
131
|
|
|
$
|
131
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
3.43
|
%
|
|
|
|||||||||||||||
Floating-rate notes receivable
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
58
|
|
|
$
|
115
|
|
|
$
|
102
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
3.33
|
%
|
|
|
|||||||||||||||
Liabilities
- Maturities represent expected principal payments, fair values represent liabilities.
|
|||||||||||||||||||||||||||||||
Fixed-rate debt
|
$
|
(4
|
)
|
|
$
|
(301
|
)
|
|
$
|
(260
|
)
|
|
$
|
(747
|
)
|
|
$
|
(358
|
)
|
|
$
|
(4,127
|
)
|
|
$
|
(5,797
|
)
|
|
$
|
(5,963
|
)
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
3.52
|
%
|
|
|
|||||||||||||||
Floating-rate debt
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(152
|
)
|
|
$
|
(104
|
)
|
|
$
|
—
|
|
|
$
|
(2,588
|
)
|
|
$
|
(2,854
|
)
|
|
$
|
(2,854
|
)
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
2.80
|
%
|
|
|
Exhibit
No.
|
|
Description
|
|
Incorporation by Reference
(where a report is indicated below, that
document has been previously filed with
the SEC and the applicable exhibit is
incorporated by reference thereto)
|
2.1
|
|
Agreement and Plan of Merger, dated as of October 27, 2015, among Starwood, Vistana Signature Experiences, Inc., Iris Merger Sub, Inc., and Interval Leisure Group, Inc.
|
|
Exhibit 2.1 to Starwood’s Form 8-K/A filed November 3, 2015 (File No. 001-07959).
|
|
|
|
|
|
2.2
|
|
Separation Agreement, dated as of October 27, 2015, among Starwood, Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc.
|
|
Exhibit 2.2 to Starwood’s Form 8-K/A filed November 3, 2015 (File No. 001-07959).
|
|
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation.
|
|
Exhibit No. 3.(i) to our Form 8-K filed August 22, 2006 (File No. 001-13881).
|
|
|
|
||
3.2
|
|
Amended and Restated Bylaws.
|
|
Exhibit No. 3.(ii) to our Form 8-K filed June 18, 2014 (File No. 001-13881).
|
|
|
|
|
|
4.1
|
|
Indenture, dated as of September 13, 2007, between Starwood and U.S. Bank National Association, as trustee.
|
|
Exhibit 4.1 to Starwood’s Form 8-K filed September 17, 2007 (File No. 001-07959).
|
|
|
|
|
|
4.2
|
|
Supplemental Indenture No. 2, dated as of May 23, 2008, between Starwood and U.S. Bank National Association, as trustee.
|
|
Exhibit 4.1 to Starwood’s Form 8-K filed May 28, 2008 (File No. 001-07959)
|
|
|
|
|
|
4.3
|
|
Supplemental Indenture No. 4, dated as of November 20, 2009, between Starwood and U.S. Bank National Association, as trustee.
|
|
Exhibit 4.1 to Starwood’s Form 8-K filed November 20, 2009 (File No. 001-07959).
|
|
|
|
|
|
4.4
|
|
Indenture, dated as of December 10, 2012, between Starwood and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
|
Exhibit 4.1 to Starwood’s Form 8-K filed December 10, 2012 (File No. 001-07959).
|
|
|
|
|
|
4.5
|
|
Supplemental Indenture No. 1, dated as of December 10, 2012, between Starwood and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
|
Exhibit 4.2 to Starwood’s Form 8-K filed December 10, 2012 (File No. 001-07959).
|
|
|
|
|
|
4.6
|
|
Supplemental Indenture No. 2, dated as of September 15, 2014, between Starwood and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
|
Exhibit 4.1 to Starwood’s Form 8-K filed September 15, 2014(File No. 001-07959).
|
|
|
|
|
|
10.1
|
|
Side Letter Agreement dated as of September 21, 2016 among the Company, Marriott Vacations Worldwide, and certain of their subsidiaries
†
|
|
Filed with this report.
|
|
|
|
|
|
10.2
|
|
License, Services and Development Agreement, dated as of May 11, 2016, among Starwood, Vistana Signature Experiences, Inc., and Interval Leisure Group, Inc.
|
|
Exhibit 10.1 to Starwood’s Form 8-K filed May 12, 2016 (File No. 001-07959).
|
|
|
|
|
|
10.3
|
|
Noncompetition Agreement, dated as of May 11, 2016, between Starwood and Vistana Signature Experiences, Inc.
|
|
Exhibit 10.2 to Starwood’s Form 8-K filed May 12, 2016 (File No. 001-07959).
|
10.4
|
|
Starwood 1999 Long-Term Incentive Compensation Plan. *
|
|
Exhibit 10.4 to Starwood’s Form 10-Q for the quarterly period ended June 30, 1999 (File No. 001-07959).
|
|
|
|
|
|
10.5
|
|
First Amendment to the Starwood 1999 Long-Term Incentive Compensation Plan, dated as of August 1, 2001. *
|
|
Exhibit 10.1 to Starwood’s Form 10-Q for the quarterly period ended September 30, 2001 (File No. 001-07959).
|
|
|
|
|
|
10.6
|
|
Second Amendment to the Starwood 1999 Long-Term Incentive Compensation Plan. *
|
|
Exhibit 10.2 to Starwood’s Form 10-Q for the quarterly period ended March 31, 2003 (File No. 001-07959).
|
|
|
|
|
|
10.7
|
|
Starwood 2002 Long-Term Incentive Compensation Plan. *
|
|
Annex B of Starwood’s 2002 Notice of Annual Meeting and Proxy Statement filed April 12, 2002 (File No. 001-07959).
|
|
|
|
|
|
10.8
|
|
First Amendment to the 2002 Starwood 2002 Long-Term Incentive Compensation Plan. *
|
|
Exhibit 10.1 to Starwood’s Form 10-Q for the quarterly period ended March 31, 2003 (File No. 001-07959).
|
|
|
|
|
|
10.9
|
|
Starwood 2004 Long-Term Incentive Compensation Plan, amended and restated as of December 31, 2008. *
|
|
Exhibit 10.3 to Starwood’s Form 8-K filed January 6, 2009 (File No. 001-07959).
|
|
|
|
|
|
10.10
|
|
First Amendment to the Starwood 2004 Long-Term Incentive Compensation Plan, amended and restated as of December 31, 2008. *
|
|
Exhibit 10.1 to Starwood’s Form 10-Q for the quarterly period ended June 30, 2013 (File No. 001-07959).
|
|
|
|
|
|
10.11
|
|
Starwood 2013 Long-Term Incentive Compensation Plan. *
|
|
Exhibit 4.4 to Starwood’s Form S-8 filed June 28, 2013 (File No. 333-189674).
|
|
|
|
|
|
12
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges.
|
|
Filed with this report.
|
|
|
|
||
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).
|
|
Filed with this report.
|
|
|
|
||
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).
|
|
Filed with this report.
|
|
|
|
||
32
|
|
Section 1350 Certifications.
|
|
Furnished with this report.
|
|
|
|
||
101.INS
|
|
XBRL Instance Document.
|
|
Submitted electronically with this report.
|
|
|
|
||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Submitted electronically with this report.
|
|
|
|
||
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
Submitted electronically with this report.
|
|
|
|
||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Submitted electronically with this report.
|
|
|
|
||
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.
|
|
Submitted electronically with this report.
|
|
|
|
||
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
Submitted electronically with this report.
|
MARRIOTT INTERNATIONAL, INC.
|
9th day of November, 2016
|
|
/s/ Bao Giang Val Bauduin
|
Bao Giang Val Bauduin
|
Controller and Chief Accounting Officer
(Duly Authorized Officer) |
MARRIOTT VACATIONS WORLDWIDE CORPORATION
By:
/s/ Ralph Lee Cunningham
Name:
Ralph Lee Cunningham
Title:
Vice President
|
MARRIOTT OWNERSHIP RESORTS, INC.
By:
/s/ Ralph Lee Cunningham
Name:
Ralph Lee Cunningham
Title:
Vice President
|
|
|
|
|
MARRIOTT INTERNATIONAL, INC.
By:
/s/ Kathleen K. Oberg
Name:
Kathleen K. Oberg
Title:
EVP & CFO
|
MARRIOTT REWARDS, LLC.
By:
/s/ Robert Behrens
Name:
Robert Behrens
Title:
VP, Marriott Rewards
|
|
|
|
|
MARRIOTT WORLDWIDE CORPORATION
By:
/s/ Kathleen K. Oberg
Name:
Kathleen K. Oberg
Title:
President
|
|
|
|
Classic Luxury:
|
The Ritz Carlton
|
|
St.Regis
|
|
JW Marriott
|
|
|
Classic Premium:
|
Marriott
|
|
Marriott Vacation Club
|
|
Sheraton
|
|
Delta Hotels by Marriott
|
|
Marriott Executive Apartments (Longer Stays)
|
|
|
Classic Select:
|
Courtyard by Marriott
|
|
Four Points by Sheraton
|
|
Springhill Suites by Marriott
|
|
Protea Hotels
|
|
TownePlace Suites by Marriott (Longer Stays)
|
|
Fairfield Inn by Marriott
|
|
Residence Inn by Marriott (Longer Stays)
|
|
|
Distinctive Luxury:
|
Ritz-Carlton Reserve
|
|
The Luxury Collection
|
|
W Hotels
|
|
Bulgari Hotels and Resorts
|
|
EDITION
|
|
|
Distinctive Premium:
|
Le Meridien
|
|
Westin Hotels and Resorts
|
|
Autograph Collection Hotels
|
|
Renaissance Hotels
|
|
Tribute Portfolio
|
|
Gaylord Hotels
|
|
Design Hotels
|
|
|
Distinctive Select:
|
AC Hotels by Marriott
|
|
Aloft Hotels
|
|
Moxy Hotels
|
|
Element by Westin (Longer Stays)
|
|
|
Nine Months Ended
|
||||||
($ in millions, except ratio)
|
|
September 30, 2016
|
|
September 30, 2015
|
||||
Income before income taxes
|
|
$
|
801
|
|
|
$
|
971
|
|
Income related to equity method investees
|
|
(8
|
)
|
|
(13
|
)
|
||
|
|
793
|
|
|
958
|
|
||
Add/(deduct):
|
|
|
|
|
||||
Fixed charges
|
|
200
|
|
|
171
|
|
||
Interest capitalized
|
|
(1
|
)
|
|
(9
|
)
|
||
Distributed income of equity method investees
|
|
7
|
|
|
4
|
|
||
Earnings available for fixed charges
|
|
$
|
999
|
|
|
$
|
1,124
|
|
Fixed charges:
|
|
|
|
|
||||
Interest expensed and capitalized
(1)
|
|
$
|
160
|
|
|
$
|
130
|
|
Estimate of interest within rent expense
|
|
40
|
|
|
41
|
|
||
Total fixed charges
|
|
$
|
200
|
|
|
$
|
171
|
|
Ratio of earnings to fixed charges
|
|
5.0
|
|
|
6.6
|
|
(1)
|
“Interest expensed and capitalized” includes amortized premiums, discounts, and capitalized expenses related to indebtedness.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Marriott International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
9th day of November, 2016
|
/s/ Arne M. Sorenson
|
|
Arne M. Sorenson
President and
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Marriott International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
9th day of November, 2016
|
/s/ Kathleen K. Oberg
|
|
Kathleen K. Oberg
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
the quarterly report on Form 10-Q of the Company for the period ended
September 30, 2016
, (the “Quarterly Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
9th day of November, 2016
|
/s/ Arne M. Sorenson
|
|
Arne M. Sorenson
President and
Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
the quarterly report on Form 10-Q of the Company for the period ended
September 30, 2016
, (the “Quarterly Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
9th day of November, 2016
|
/s/ Kathleen K. Oberg
|
|
Kathleen K. Oberg
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|