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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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 2.
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Item 6.
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30, 2018
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June 30, 2017
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June 30, 2018
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|
June 30, 2017
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Base management fees
|
$
|
300
|
|
|
$
|
285
|
|
|
$
|
573
|
|
|
$
|
549
|
|
Franchise fees
|
475
|
|
|
408
|
|
|
892
|
|
|
763
|
|
||||
Incentive management fees
|
176
|
|
|
155
|
|
|
331
|
|
|
295
|
|
||||
Gross fee revenues
|
951
|
|
|
848
|
|
|
1,796
|
|
|
1,607
|
|
||||
Contract investment amortization
|
(13
|
)
|
|
(12
|
)
|
|
(31
|
)
|
|
(23
|
)
|
||||
Net fee revenues
|
938
|
|
|
836
|
|
|
1,765
|
|
|
1,584
|
|
||||
Owned, leased, and other revenue
|
423
|
|
|
448
|
|
|
829
|
|
|
876
|
|
||||
Cost reimbursement revenue
|
3,985
|
|
|
3,927
|
|
|
7,758
|
|
|
7,663
|
|
||||
|
5,346
|
|
|
5,211
|
|
|
10,352
|
|
|
10,123
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|
||||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
|
||||||||
Owned, leased, and other-direct
|
334
|
|
|
350
|
|
|
670
|
|
|
706
|
|
||||
Depreciation, amortization, and other
|
58
|
|
|
71
|
|
|
112
|
|
|
122
|
|
||||
General, administrative, and other
|
217
|
|
|
234
|
|
|
464
|
|
|
446
|
|
||||
Merger-related costs and charges
|
18
|
|
|
21
|
|
|
52
|
|
|
72
|
|
||||
Reimbursed expenses
|
3,979
|
|
|
3,791
|
|
|
7,814
|
|
|
7,487
|
|
||||
|
4,606
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|
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4,467
|
|
|
9,112
|
|
|
8,833
|
|
||||
OPERATING INCOME
|
740
|
|
|
744
|
|
|
1,240
|
|
|
1,290
|
|
||||
Gains and other income, net
|
114
|
|
|
25
|
|
|
173
|
|
|
25
|
|
||||
Interest expense
|
(85
|
)
|
|
(73
|
)
|
|
(160
|
)
|
|
(143
|
)
|
||||
Interest income
|
6
|
|
|
8
|
|
|
11
|
|
|
15
|
|
||||
Equity in earnings
|
21
|
|
|
12
|
|
|
34
|
|
|
23
|
|
||||
INCOME BEFORE INCOME TAXES
|
796
|
|
|
716
|
|
|
1,298
|
|
|
1,210
|
|
||||
Provision for income taxes
|
(186
|
)
|
|
(227
|
)
|
|
(290
|
)
|
|
(350
|
)
|
||||
NET INCOME
|
$
|
610
|
|
|
$
|
489
|
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$
|
1,008
|
|
|
$
|
860
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EARNINGS PER SHARE
|
|
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||||||||
Earnings per share - basic
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$
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1.73
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|
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$
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1.29
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$
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2.83
|
|
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$
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2.25
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Earnings per share - diluted
|
$
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1.71
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$
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1.28
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$
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2.80
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$
|
2.23
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CASH DIVIDENDS DECLARED PER SHARE
|
$
|
0.41
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|
|
$
|
0.33
|
|
|
$
|
0.74
|
|
|
$
|
0.63
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||
Net income
|
$
|
610
|
|
|
$
|
489
|
|
|
$
|
1,008
|
|
|
$
|
860
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(399
|
)
|
|
162
|
|
|
(247
|
)
|
|
350
|
|
||||
Derivative instrument adjustments, net of tax
|
11
|
|
|
(6
|
)
|
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8
|
|
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(8
|
)
|
||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
—
|
|
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(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Pension and postretirement adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reclassification of losses (gains), net of tax
|
3
|
|
|
1
|
|
|
16
|
|
|
1
|
|
||||
Total other comprehensive (loss) income, net of tax
|
(385
|
)
|
|
156
|
|
|
(223
|
)
|
|
341
|
|
||||
Comprehensive income
|
$
|
225
|
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$
|
645
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$
|
785
|
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$
|
1,201
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
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|
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Current assets
|
|
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|
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Cash and equivalents
|
$
|
366
|
|
|
$
|
383
|
|
Accounts and notes receivable, net
|
2,174
|
|
|
1,973
|
|
||
Prepaid expenses and other
|
264
|
|
|
235
|
|
||
Assets held for sale
|
13
|
|
|
149
|
|
||
|
2,817
|
|
|
2,740
|
|
||
Property and equipment, net
|
1,958
|
|
|
1,793
|
|
||
Intangible assets
|
|
|
|
||||
Brands
|
5,842
|
|
|
5,922
|
|
||
Contract acquisition costs and other
|
2,598
|
|
|
2,622
|
|
||
Goodwill
|
9,103
|
|
|
9,207
|
|
||
|
17,543
|
|
|
17,751
|
|
||
Equity method investments
|
638
|
|
|
734
|
|
||
Notes receivable, net
|
121
|
|
|
142
|
|
||
Deferred tax assets
|
171
|
|
|
93
|
|
||
Other noncurrent assets
|
596
|
|
|
593
|
|
||
|
$
|
23,844
|
|
|
$
|
23,846
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
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|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
616
|
|
|
$
|
398
|
|
Accounts payable
|
834
|
|
|
783
|
|
||
Accrued payroll and benefits
|
1,176
|
|
|
1,214
|
|
||
Liability for guest loyalty programs
|
2,177
|
|
|
2,121
|
|
||
Accrued expenses and other
|
1,101
|
|
|
1,291
|
|
||
|
5,904
|
|
|
5,807
|
|
||
Long-term debt
|
8,375
|
|
|
7,840
|
|
||
Liability for guest loyalty programs
|
3,314
|
|
|
2,819
|
|
||
Deferred tax liabilities
|
567
|
|
|
605
|
|
||
Deferred revenue
|
645
|
|
|
583
|
|
||
Other noncurrent liabilities
|
2,198
|
|
|
2,610
|
|
||
Shareholders’ equity
|
|
|
|
||||
Class A Common Stock
|
5
|
|
|
5
|
|
||
Additional paid-in-capital
|
5,728
|
|
|
5,770
|
|
||
Retained earnings
|
8,363
|
|
|
7,242
|
|
||
Treasury stock, at cost
|
(11,011
|
)
|
|
(9,418
|
)
|
||
Accumulated other comprehensive loss
|
(244
|
)
|
|
(17
|
)
|
||
|
2,841
|
|
|
3,582
|
|
||
|
$
|
23,844
|
|
|
$
|
23,846
|
|
|
Six Months Ended
|
||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
1,008
|
|
|
$
|
860
|
|
Adjustments to reconcile to cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization, and other
|
143
|
|
|
145
|
|
||
Share-based compensation
|
93
|
|
|
95
|
|
||
Income taxes
|
(198
|
)
|
|
148
|
|
||
Liability for guest loyalty programs
|
542
|
|
|
184
|
|
||
Contract acquisition costs
|
(71
|
)
|
|
(89
|
)
|
||
Merger-related charges
|
(23
|
)
|
|
(98
|
)
|
||
Working capital changes
|
(241
|
)
|
|
(113
|
)
|
||
Gain on asset dispositions
|
(173
|
)
|
|
(24
|
)
|
||
Other
|
49
|
|
|
78
|
|
||
Net cash provided by operating activities
|
1,129
|
|
|
1,186
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(388
|
)
|
|
(104
|
)
|
||
Dispositions
|
436
|
|
|
482
|
|
||
Loan advances
|
(13
|
)
|
|
(48
|
)
|
||
Loan collections
|
29
|
|
|
10
|
|
||
Other
|
50
|
|
|
(17
|
)
|
||
Net cash provided by investing activities
|
114
|
|
|
323
|
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Commercial paper/Credit Facility, net
|
707
|
|
|
119
|
|
||
Issuance of long-term debt
|
443
|
|
|
1
|
|
||
Repayment of long-term debt
|
(387
|
)
|
|
(301
|
)
|
||
Issuance of Class A Common Stock
|
4
|
|
|
3
|
|
||
Dividends paid
|
(262
|
)
|
|
(240
|
)
|
||
Purchase of treasury stock
|
(1,673
|
)
|
|
(1,328
|
)
|
||
Share-based compensation withholding taxes
|
(101
|
)
|
|
(135
|
)
|
||
Net cash used in financing activities
|
(1,269
|
)
|
|
(1,881
|
)
|
||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
(26
|
)
|
|
(372
|
)
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period
(1)
|
429
|
|
|
887
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period
(1)
|
$
|
403
|
|
|
$
|
515
|
|
(1)
|
The 2018 amounts include restricted cash of
$46 million
at
December 31, 2017
, and
$37 million
at
June 30, 2018
, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.
|
•
|
We used the transaction price at the date of contract completion for our contracts that had variable consideration and were completed before January 1, 2018.
|
•
|
We considered the aggregate effect of all contract modifications that occurred before January 1, 2016 when: (1) identifying satisfied and unsatisfied performance obligations; (2) determining the transaction price; and (3) allocating the transaction price to the satisfied and unsatisfied performance obligations.
|
•
|
We did not: (1) disclose the amount of the transaction price that we allocated to remaining performance obligations; or (2) include an explanation of when we expect to recognize the revenue allocated to remaining performance obligations.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
($ in millions, except per share amounts)
|
June 30, 2017
(As Previously Reported)
|
|
Adoption of ASU 2014-09
|
|
June 30, 2017
(As Adjusted)
|
|
June 30, 2017
(As Previously Reported)
|
|
Adoption of ASU 2014-09
|
|
June 30, 2017
(As Adjusted)
|
||||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Base management fees
|
$
|
285
|
|
|
$
|
—
|
|
|
$
|
285
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
549
|
|
Franchise fees
|
416
|
|
|
(8
|
)
|
|
408
|
|
|
781
|
|
|
(18
|
)
|
|
763
|
|
||||||
Incentive management fees
|
148
|
|
|
7
|
|
|
155
|
|
|
301
|
|
|
(6
|
)
|
|
295
|
|
||||||
Gross fee revenues
|
849
|
|
|
(1
|
)
|
|
848
|
|
|
1,631
|
|
|
(24
|
)
|
|
1,607
|
|
||||||
Contract investment amortization
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
||||||
Net fee revenues
|
849
|
|
|
(13
|
)
|
|
836
|
|
|
1,631
|
|
|
(47
|
)
|
|
1,584
|
|
||||||
Owned, leased, and other revenue
|
458
|
|
|
(10
|
)
|
|
448
|
|
|
897
|
|
|
(21
|
)
|
|
876
|
|
||||||
Cost reimbursement revenue
|
4,488
|
|
|
(561
|
)
|
|
3,927
|
|
|
8,828
|
|
|
(1,165
|
)
|
|
7,663
|
|
||||||
|
5,795
|
|
|
(584
|
)
|
|
5,211
|
|
|
11,356
|
|
|
(1,233
|
)
|
|
10,123
|
|
||||||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owned, leased, and other-direct
|
355
|
|
|
(5
|
)
|
|
350
|
|
|
713
|
|
|
(7
|
)
|
|
706
|
|
||||||
Depreciation, amortization, and other
|
85
|
|
|
(14
|
)
|
|
71
|
|
|
150
|
|
|
(28
|
)
|
|
122
|
|
||||||
General, administrative, and other
|
226
|
|
|
8
|
|
|
234
|
|
|
436
|
|
|
10
|
|
|
446
|
|
||||||
Merger-related costs and charges
|
21
|
|
|
—
|
|
|
21
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||
Reimbursed expenses
|
4,488
|
|
|
(697
|
)
|
|
3,791
|
|
|
8,828
|
|
|
(1,341
|
)
|
|
7,487
|
|
||||||
|
5,175
|
|
|
(708
|
)
|
|
4,467
|
|
|
10,199
|
|
|
(1,366
|
)
|
|
8,833
|
|
||||||
OPERATING INCOME
|
620
|
|
|
124
|
|
|
744
|
|
|
1,157
|
|
|
133
|
|
|
1,290
|
|
||||||
Gains and other income, net
|
25
|
|
|
—
|
|
|
25
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||
Interest expense
|
(73
|
)
|
|
—
|
|
|
(73
|
)
|
|
(143
|
)
|
|
—
|
|
|
(143
|
)
|
||||||
Interest income
|
8
|
|
|
—
|
|
|
8
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||
Equity in earnings
|
12
|
|
|
—
|
|
|
12
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||
INCOME BEFORE INCOME TAXES
|
592
|
|
|
124
|
|
|
716
|
|
|
1,077
|
|
|
133
|
|
|
1,210
|
|
||||||
Provision for income taxes
|
(178
|
)
|
|
(49
|
)
|
|
(227
|
)
|
|
(298
|
)
|
|
(52
|
)
|
|
(350
|
)
|
||||||
NET INCOME
|
$
|
414
|
|
|
$
|
75
|
|
|
$
|
489
|
|
|
$
|
779
|
|
|
$
|
81
|
|
|
$
|
860
|
|
EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share - basic
|
$
|
1.09
|
|
|
$
|
0.20
|
|
|
$
|
1.29
|
|
|
$
|
2.04
|
|
|
$
|
0.21
|
|
|
$
|
2.25
|
|
Earnings per share - diluted
|
$
|
1.08
|
|
|
$
|
0.20
|
|
|
$
|
1.28
|
|
|
$
|
2.02
|
|
|
$
|
0.21
|
|
|
$
|
2.23
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
($ in millions)
|
June 30, 2017
(As Previously Reported)
|
|
Adoption of ASU 2014-09
|
|
June 30, 2017
(As Adjusted)
|
|
June 30, 2017
(As Previously Reported)
|
|
Adoption of ASU 2014-09
|
|
June 30, 2017
(As Adjusted)
|
||||||||||||
Net income
|
$
|
414
|
|
|
$
|
75
|
|
|
$
|
489
|
|
|
$
|
779
|
|
|
$
|
81
|
|
|
$
|
860
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
162
|
|
|
—
|
|
|
162
|
|
|
350
|
|
|
—
|
|
|
350
|
|
||||||
Derivative instrument adjustments, net of tax
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Unrealized (loss) gain on available-for-sale securities, net of tax
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification of losses, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total other comprehensive income, net of tax
|
156
|
|
|
—
|
|
|
156
|
|
|
341
|
|
|
—
|
|
|
341
|
|
||||||
Comprehensive income
|
$
|
570
|
|
|
$
|
75
|
|
|
$
|
645
|
|
|
$
|
1,120
|
|
|
$
|
81
|
|
|
$
|
1,201
|
|
($ in millions)
|
December 31, 2017
(As Previously Reported)
(1)
|
|
Adoption of ASU 2014-09
|
|
December 31, 2017
(As Adjusted)
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
||||||
Cash and equivalents
|
$
|
383
|
|
|
$
|
—
|
|
|
$
|
383
|
|
Accounts and notes receivable, net
|
1,999
|
|
|
(26
|
)
|
|
1,973
|
|
|||
Prepaid expenses and other
|
216
|
|
|
19
|
|
|
235
|
|
|||
Assets held for sale
|
149
|
|
|
—
|
|
|
149
|
|
|||
|
2,747
|
|
|
(7
|
)
|
|
2,740
|
|
|||
Property and equipment, net
|
1,793
|
|
|
—
|
|
|
1,793
|
|
|||
Intangible assets
|
|
|
|
|
|
||||||
Brands
|
5,922
|
|
|
—
|
|
|
5,922
|
|
|||
Contract acquisition costs and other
|
2,884
|
|
|
(262
|
)
|
|
2,622
|
|
|||
Goodwill
|
9,207
|
|
|
—
|
|
|
9,207
|
|
|||
|
18,013
|
|
|
(262
|
)
|
|
17,751
|
|
|||
Equity method investments
|
735
|
|
|
(1
|
)
|
|
734
|
|
|||
Notes receivable, net
|
142
|
|
|
—
|
|
|
142
|
|
|||
Deferred tax assets
|
93
|
|
|
—
|
|
|
93
|
|
|||
Other noncurrent assets
|
426
|
|
|
167
|
|
|
593
|
|
|||
|
$
|
23,949
|
|
|
$
|
(103
|
)
|
|
$
|
23,846
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
398
|
|
|
$
|
—
|
|
|
$
|
398
|
|
Accounts payable
|
783
|
|
|
—
|
|
|
783
|
|
|||
Accrued payroll and benefits
|
1,214
|
|
|
—
|
|
|
1,214
|
|
|||
Liability for guest loyalty programs
|
2,064
|
|
|
57
|
|
|
2,121
|
|
|||
Accrued expenses and other
|
1,541
|
|
|
(250
|
)
|
|
1,291
|
|
|||
|
6,000
|
|
|
(193
|
)
|
|
5,807
|
|
|||
Long-term debt
|
7,840
|
|
|
—
|
|
|
7,840
|
|
|||
Liability for guest loyalty programs
|
2,876
|
|
|
(57
|
)
|
|
2,819
|
|
|||
Deferred tax liabilities
|
604
|
|
|
1
|
|
|
605
|
|
|||
Deferred revenue
|
145
|
|
|
438
|
|
|
583
|
|
|||
Other noncurrent liabilities
|
2,753
|
|
|
(143
|
)
|
|
2,610
|
|
|||
Shareholders' equity
|
|
|
|
|
|
||||||
Class A Common Stock
|
5
|
|
|
—
|
|
|
5
|
|
|||
Additional paid-in-capital
|
5,770
|
|
|
—
|
|
|
5,770
|
|
|||
Retained earnings
|
7,391
|
|
|
(149
|
)
|
|
7,242
|
|
|||
Treasury stock, at cost
|
(9,418
|
)
|
|
—
|
|
|
(9,418
|
)
|
|||
Accumulated other comprehensive loss
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
|
3,731
|
|
|
(149
|
)
|
|
3,582
|
|
|||
|
$
|
23,949
|
|
|
$
|
(103
|
)
|
|
$
|
23,846
|
|
(1)
|
Includes reclassifications among various captions, including Deferred revenue and Other noncurrent liabilities, to conform to current period presentation.
|
|
Six Months Ended
|
|
|
|
|
|
Six Months Ended
|
||||||||
($ in millions)
|
June 30, 2017
(As Previously Reported)
|
|
Adoption of ASU 2014-09
|
|
Adoption of ASUs 2016-18 and 2016-15
|
|
June 30, 2017
(As Adjusted)
|
||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
779
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
860
|
|
Adjustments to reconcile to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation, amortization, and other
|
150
|
|
|
(5
|
)
|
|
—
|
|
|
145
|
|
||||
Share-based compensation
|
95
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||
Income taxes
|
96
|
|
|
52
|
|
|
—
|
|
|
148
|
|
||||
Liability for guest loyalty program
|
204
|
|
|
(20
|
)
|
|
—
|
|
|
184
|
|
||||
Contract acquisition costs
|
—
|
|
|
(89
|
)
|
|
—
|
|
|
(89
|
)
|
||||
Merger-related charges
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
||||
Working capital changes
|
(6
|
)
|
|
(95
|
)
|
|
(12
|
)
|
|
(113
|
)
|
||||
Gain on asset dispositions
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||
Other
|
106
|
|
|
(14
|
)
|
|
(14
|
)
|
|
78
|
|
||||
Net cash provided by (used in) operating activities
|
1,302
|
|
|
(90
|
)
|
|
(26
|
)
|
|
1,186
|
|
||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
||||
Dispositions
|
482
|
|
|
—
|
|
|
—
|
|
|
482
|
|
||||
Loan advances
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||
Loan collections
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Contract acquisition costs
|
(91
|
)
|
|
91
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(16
|
)
|
|
(1
|
)
|
|
—
|
|
|
(17
|
)
|
||||
Net cash provided by investing activities
|
233
|
|
|
90
|
|
|
—
|
|
|
323
|
|
||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Commercial paper/Credit Facility, net
|
105
|
|
|
—
|
|
|
14
|
|
|
119
|
|
||||
Issuance of long-term debt
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Repayment of long-term debt
|
(301
|
)
|
|
—
|
|
|
—
|
|
|
(301
|
)
|
||||
Issuance of Class A Common Stock
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Dividends paid
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
||||
Purchase of treasury stock
|
(1,328
|
)
|
|
—
|
|
|
—
|
|
|
(1,328
|
)
|
||||
Share-based compensation withholding taxes
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
||||
Net cash provided by (used in) financing activities
|
(1,895
|
)
|
|
—
|
|
|
14
|
|
|
(1,881
|
)
|
||||
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
(360
|
)
|
|
—
|
|
|
(12
|
)
|
|
(372
|
)
|
||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period
|
858
|
|
|
—
|
|
|
29
|
|
|
887
|
|
||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period
|
$
|
498
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
515
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
345
|
|
|
$
|
250
|
|
|
$
|
110
|
|
|
$
|
128
|
|
|
$
|
833
|
|
Contract investment amortization
|
(7
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(13
|
)
|
|||||
Net fee revenues
|
338
|
|
|
247
|
|
|
109
|
|
|
126
|
|
|
820
|
|
|||||
Owned, leased, and other revenue
|
140
|
|
|
37
|
|
|
48
|
|
|
178
|
|
|
403
|
|
|||||
Cost reimbursement revenue
|
2,878
|
|
|
604
|
|
|
111
|
|
|
303
|
|
|
3,896
|
|
|||||
Total segment revenue
|
$
|
3,356
|
|
|
$
|
888
|
|
|
$
|
268
|
|
|
$
|
607
|
|
|
$
|
5,119
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
227
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
5,346
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
317
|
|
|
$
|
230
|
|
|
$
|
98
|
|
|
$
|
119
|
|
|
$
|
764
|
|
Contract investment amortization
|
(6
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(12
|
)
|
|||||
Net fee revenues
|
311
|
|
|
227
|
|
|
97
|
|
|
117
|
|
|
752
|
|
|||||
Owned, leased, and other revenue
|
181
|
|
|
32
|
|
|
49
|
|
|
175
|
|
|
437
|
|
|||||
Cost reimbursement revenue
|
2,785
|
|
|
577
|
|
|
106
|
|
|
296
|
|
|
3,764
|
|
|||||
Total segment revenue
|
$
|
3,277
|
|
|
$
|
836
|
|
|
$
|
252
|
|
|
$
|
588
|
|
|
$
|
4,953
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
258
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
5,211
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
644
|
|
|
$
|
446
|
|
|
$
|
227
|
|
|
$
|
250
|
|
|
$
|
1,567
|
|
Contract investment amortization
|
(18
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
(31
|
)
|
|||||
Net fee revenues
|
626
|
|
|
440
|
|
|
226
|
|
|
244
|
|
|
1,536
|
|
|||||
Owned, leased, and other revenue
|
295
|
|
|
70
|
|
|
95
|
|
|
336
|
|
|
796
|
|
|||||
Cost reimbursement revenue
|
5,734
|
|
|
1,139
|
|
|
222
|
|
|
554
|
|
|
7,649
|
|
|||||
Total segment revenue
|
$
|
6,655
|
|
|
$
|
1,649
|
|
|
$
|
543
|
|
|
$
|
1,134
|
|
|
$
|
9,981
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
371
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
10,352
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
606
|
|
|
$
|
411
|
|
|
$
|
195
|
|
|
$
|
231
|
|
|
$
|
1,443
|
|
Contract investment amortization
|
(12
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(23
|
)
|
|||||
Net fee revenues
|
594
|
|
|
405
|
|
|
194
|
|
|
227
|
|
|
1,420
|
|
|||||
Owned, leased, and other revenue
|
378
|
|
|
63
|
|
|
90
|
|
|
324
|
|
|
855
|
|
|||||
Cost reimbursement revenue
|
5,545
|
|
|
1,109
|
|
|
209
|
|
|
549
|
|
|
7,412
|
|
|||||
Total segment revenue
|
$
|
6,517
|
|
|
$
|
1,577
|
|
|
$
|
493
|
|
|
$
|
1,100
|
|
|
$
|
9,687
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
436
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
10,123
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in millions, except per share amounts)
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||
Computation of Basic Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
610
|
|
|
$
|
489
|
|
|
$
|
1,008
|
|
|
$
|
860
|
|
Shares for basic earnings per share
|
353.4
|
|
|
378.5
|
|
|
355.9
|
|
|
381.7
|
|
||||
Basic earnings per share
|
$
|
1.73
|
|
|
$
|
1.29
|
|
|
$
|
2.83
|
|
|
$
|
2.25
|
|
Computation of Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
610
|
|
|
$
|
489
|
|
|
$
|
1,008
|
|
|
$
|
860
|
|
Shares for basic earnings per share
|
353.4
|
|
|
378.5
|
|
|
355.9
|
|
|
381.7
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Share-based compensation
|
3.9
|
|
|
4.5
|
|
|
4.4
|
|
|
4.8
|
|
||||
Shares for diluted earnings per share
|
357.3
|
|
|
383.0
|
|
|
360.3
|
|
|
386.5
|
|
||||
Diluted earnings per share
|
$
|
1.71
|
|
|
$
|
1.28
|
|
|
$
|
2.80
|
|
|
$
|
2.23
|
|
($ in millions)
Guarantee Type
|
|
Maximum Potential Amount of Future Fundings
|
|
Recorded Liability for Guarantees
|
||||
Debt service
|
|
$
|
128
|
|
|
$
|
76
|
|
Operating profit
|
|
229
|
|
|
110
|
|
||
Other
|
|
10
|
|
|
2
|
|
||
|
|
$
|
367
|
|
|
$
|
188
|
|
|
At Period End
|
||||||
($ in millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Senior Notes:
|
|
|
|
||||
Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019
(effective interest rate of 4.4%) |
$
|
599
|
|
|
$
|
598
|
|
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%) |
348
|
|
|
348
|
|
||
Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021
(effective interest rate of 3.4%) |
397
|
|
|
397
|
|
||
Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021
(effective interest rate of 3.1%) |
448
|
|
|
447
|
|
||
Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025
(effective interest rate of 4.0%) |
345
|
|
|
345
|
|
||
Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022
(effective interest rate of 2.5%) |
744
|
|
|
744
|
|
||
Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026
(effective interest rate of 3.3%) |
743
|
|
|
743
|
|
||
Series S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018
(effective interest rate of 1.7%) |
—
|
|
|
330
|
|
||
Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019
(effective interest rate of 2.3%) |
192
|
|
|
197
|
|
||
Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023
(effective interest rate of 3.1%) |
291
|
|
|
291
|
|
||
Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025
(effective interest rate of 2.8%) |
336
|
|
|
337
|
|
||
Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034
(effective interest rate of 4.1%) |
292
|
|
|
292
|
|
||
Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028
(effective interest rate of 4.2%)
|
443
|
|
|
—
|
|
||
Commercial paper
|
3,079
|
|
|
2,371
|
|
||
Credit Facility
|
—
|
|
|
—
|
|
||
Capital lease obligations
|
168
|
|
|
171
|
|
||
Other
|
218
|
|
|
279
|
|
||
|
$
|
8,991
|
|
|
$
|
8,238
|
|
Less: Current portion of long-term debt
|
(616
|
)
|
|
(398
|
)
|
||
|
$
|
8,375
|
|
|
$
|
7,840
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
($ in millions)
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
Senior, mezzanine, and other loans
|
$
|
121
|
|
|
$
|
108
|
|
|
$
|
142
|
|
|
$
|
130
|
|
Total noncurrent financial assets
|
$
|
121
|
|
|
$
|
108
|
|
|
$
|
142
|
|
|
$
|
130
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes
|
$
|
(4,927
|
)
|
|
$
|
(4,810
|
)
|
|
$
|
(5,087
|
)
|
|
$
|
(5,126
|
)
|
Commercial paper
|
(3,079
|
)
|
|
(3,079
|
)
|
|
(2,371
|
)
|
|
(2,371
|
)
|
||||
Other long-term debt
|
(207
|
)
|
|
(205
|
)
|
|
(217
|
)
|
|
(221
|
)
|
||||
Other noncurrent liabilities
|
(165
|
)
|
|
(165
|
)
|
|
(178
|
)
|
|
(178
|
)
|
||||
Total noncurrent financial liabilities
|
$
|
(8,378
|
)
|
|
$
|
(8,259
|
)
|
|
$
|
(7,853
|
)
|
|
$
|
(7,896
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument Adjustments
|
|
Available-For-Sale Securities Unrealized Adjustments
|
|
Pension and Postretirement Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at year-end 2017
|
$
|
(23
|
)
|
|
$
|
(10
|
)
|
|
$
|
4
|
|
|
$
|
12
|
|
|
$
|
(17
|
)
|
Other comprehensive (loss) income before reclassifications
(1)
|
(247
|
)
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Net other comprehensive (loss) income
|
(239
|
)
|
|
16
|
|
|
—
|
|
|
—
|
|
|
(223
|
)
|
|||||
Adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Balance at June 30, 2018
|
$
|
(262
|
)
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
(244
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument Adjustments
|
|
Available-For-Sale Securities Unrealized Adjustments
|
|
Pension and Postretirement Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at year-end 2016
|
$
|
(503
|
)
|
|
$
|
(5
|
)
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
(497
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
350
|
|
|
(8
|
)
|
|
(2
|
)
|
|
—
|
|
|
340
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Net other comprehensive income (loss)
|
350
|
|
|
(7
|
)
|
|
(2
|
)
|
|
—
|
|
|
341
|
|
|||||
Balance at June 30, 2017
|
$
|
(153
|
)
|
|
$
|
(12
|
)
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
(156
|
)
|
(1)
|
Other comprehensive (loss) income before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in a gain of
$38 million
for the
2018 first half
and loss of
$106 million
for the
2017 first half
.
|
•
|
North American Full-Service
, which includes our Luxury and Premium brands located in the U.S. and Canada;
|
•
|
North American Limited-Service
, which includes our Select brands located in the U.S. and Canada; and
|
•
|
Asia Pacific
, which includes all brand tiers in our Asia Pacific region;
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||
North American Full-Service
|
$
|
3,356
|
|
|
$
|
3,277
|
|
|
$
|
6,655
|
|
|
$
|
6,517
|
|
North American Limited-Service
|
888
|
|
|
836
|
|
|
1,649
|
|
|
1,577
|
|
||||
Asia Pacific
|
268
|
|
|
252
|
|
|
543
|
|
|
493
|
|
||||
Other International
|
607
|
|
|
588
|
|
|
1,134
|
|
|
1,100
|
|
||||
Total segment revenues
|
5,119
|
|
|
4,953
|
|
|
9,981
|
|
|
9,687
|
|
||||
Other unallocated corporate
|
227
|
|
|
258
|
|
|
371
|
|
|
436
|
|
||||
Total consolidated revenues
|
$
|
5,346
|
|
|
$
|
5,211
|
|
|
$
|
10,352
|
|
|
$
|
10,123
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||
North American Full-Service
|
$
|
394
|
|
|
$
|
375
|
|
|
$
|
671
|
|
|
$
|
677
|
|
North American Limited-Service
|
252
|
|
|
243
|
|
|
434
|
|
|
430
|
|
||||
Asia Pacific
|
140
|
|
|
73
|
|
|
252
|
|
|
167
|
|
||||
Other International
|
160
|
|
|
113
|
|
|
319
|
|
|
231
|
|
||||
Total segment profits
|
946
|
|
|
804
|
|
|
1,676
|
|
|
1,505
|
|
||||
Other unallocated corporate
|
(71
|
)
|
|
(23
|
)
|
|
(229
|
)
|
|
(167
|
)
|
||||
Interest expense, net of interest income
|
(79
|
)
|
|
(65
|
)
|
|
(149
|
)
|
|
(128
|
)
|
||||
Income taxes
|
(186
|
)
|
|
(227
|
)
|
|
(290
|
)
|
|
(350
|
)
|
||||
Net income
|
$
|
610
|
|
|
$
|
489
|
|
|
$
|
1,008
|
|
|
$
|
860
|
|
|
Managed
|
|
Franchised/Licensed
|
|
Owned/Leased
|
|
Other
(1)
|
|
Total
|
||||||||||||||||||||
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
||||||||||
North American
Full-Service
|
416
|
|
|
184,878
|
|
|
691
|
|
|
200,374
|
|
|
9
|
|
|
5,275
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
390,527
|
|
North American
Limited-Service
|
406
|
|
|
64,121
|
|
|
3,326
|
|
|
382,106
|
|
|
20
|
|
|
3,006
|
|
|
42
|
|
|
7,189
|
|
|
3,794
|
|
|
456,422
|
|
Asia
Pacific
|
575
|
|
|
170,236
|
|
|
94
|
|
|
26,653
|
|
|
2
|
|
|
410
|
|
|
—
|
|
|
—
|
|
|
671
|
|
|
197,299
|
|
Other
International
|
532
|
|
|
122,997
|
|
|
385
|
|
|
76,782
|
|
|
31
|
|
|
8,155
|
|
|
98
|
|
|
12,004
|
|
|
1,046
|
|
|
219,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Timeshare
|
—
|
|
|
—
|
|
|
90
|
|
|
22,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
22,539
|
|
Total
|
1,929
|
|
|
542,232
|
|
|
4,586
|
|
|
708,454
|
|
|
62
|
|
|
16,846
|
|
|
140
|
|
|
19,193
|
|
|
6,717
|
|
|
1,286,725
|
|
(1)
|
Other represents unconsolidated equity method investments, which we present in the “
Equity in earnings
” caption of our Income Statements.
|
Comparable Company-Operated North American Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|||||||||
JW Marriott
|
$
|
198.18
|
|
|
1.1
|
%
|
|
81.4
|
%
|
|
0.1
|
%
|
pts.
|
|
$
|
243.45
|
|
|
1.0
|
%
|
The Ritz-Carlton
|
$
|
281.05
|
|
|
4.9
|
%
|
|
76.4
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
367.77
|
|
|
3.9
|
%
|
W Hotels
|
$
|
261.02
|
|
|
0.9
|
%
|
|
83.2
|
%
|
|
(1.5
|
)%
|
pts.
|
|
$
|
313.73
|
|
|
2.7
|
%
|
Composite North American Luxury
(1)
|
$
|
263.58
|
|
|
3.4
|
%
|
|
79.5
|
%
|
|
0.3
|
%
|
pts.
|
|
$
|
331.50
|
|
|
3.0
|
%
|
Marriott Hotels
|
$
|
169.82
|
|
|
4.4
|
%
|
|
81.4
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
208.49
|
|
|
3.6
|
%
|
Sheraton
|
$
|
156.33
|
|
|
4.5
|
%
|
|
80.6
|
%
|
|
2.3
|
%
|
pts.
|
|
$
|
193.92
|
|
|
1.5
|
%
|
Westin
|
$
|
182.79
|
|
|
1.5
|
%
|
|
80.6
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
226.73
|
|
|
0.7
|
%
|
Composite North American Upper Upscale
(2)
|
$
|
166.22
|
|
|
4.1
|
%
|
|
80.6
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
206.23
|
|
|
2.8
|
%
|
North American Full-Service
(3)
|
$
|
182.40
|
|
|
3.9
|
%
|
|
80.4
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
226.81
|
|
|
2.7
|
%
|
Courtyard
|
$
|
114.92
|
|
|
2.0
|
%
|
|
78.2
|
%
|
|
0.5
|
%
|
pts.
|
|
$
|
146.99
|
|
|
1.3
|
%
|
Residence Inn
|
$
|
135.45
|
|
|
0.5
|
%
|
|
82.4
|
%
|
|
(0.7
|
)%
|
pts.
|
|
$
|
164.36
|
|
|
1.4
|
%
|
Composite North American Limited-Service
(4)
|
$
|
120.35
|
|
|
1.4
|
%
|
|
79.8
|
%
|
|
0.2
|
%
|
pts.
|
|
$
|
150.83
|
|
|
1.2
|
%
|
North American - All
(5)
|
$
|
162.86
|
|
|
3.3
|
%
|
|
80.2
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
203.01
|
|
|
2.5
|
%
|
Comparable Systemwide North American Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|||||||||
JW Marriott
|
$
|
195.37
|
|
|
2.7
|
%
|
|
81.6
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
239.37
|
|
|
1.9
|
%
|
The Ritz-Carlton
|
$
|
281.05
|
|
|
4.9
|
%
|
|
76.4
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
367.77
|
|
|
3.9
|
%
|
W Hotels
|
$
|
261.02
|
|
|
0.9
|
%
|
|
83.2
|
%
|
|
(1.5
|
)%
|
pts.
|
|
$
|
313.73
|
|
|
2.7
|
%
|
Composite North American Luxury
(1)
|
$
|
251.71
|
|
|
3.9
|
%
|
|
79.9
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
315.16
|
|
|
3.0
|
%
|
Marriott Hotels
|
$
|
142.53
|
|
|
3.7
|
%
|
|
77.6
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
183.70
|
|
|
2.7
|
%
|
Sheraton
|
$
|
124.85
|
|
|
3.1
|
%
|
|
77.3
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
161.48
|
|
|
1.8
|
%
|
Westin
|
$
|
167.33
|
|
|
2.5
|
%
|
|
80.2
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
208.67
|
|
|
1.8
|
%
|
Composite North American Upper Upscale
(2)
|
$
|
144.26
|
|
|
3.6
|
%
|
|
78.1
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
184.83
|
|
|
2.5
|
%
|
North American Full-Service
(3)
|
$
|
154.74
|
|
|
3.7
|
%
|
|
78.2
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
197.80
|
|
|
2.6
|
%
|
Courtyard
|
$
|
112.47
|
|
|
2.2
|
%
|
|
78.0
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
144.10
|
|
|
1.0
|
%
|
Residence Inn
|
$
|
125.45
|
|
|
1.7
|
%
|
|
82.8
|
%
|
|
0.7
|
%
|
pts.
|
|
$
|
151.47
|
|
|
0.8
|
%
|
Fairfield Inn & Suites
|
$
|
90.48
|
|
|
2.9
|
%
|
|
76.9
|
%
|
|
1.5
|
%
|
pts.
|
|
$
|
117.71
|
|
|
0.9
|
%
|
Composite North American Limited-Service
(4)
|
$
|
108.11
|
|
|
2.5
|
%
|
|
79.1
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
136.64
|
|
|
1.2
|
%
|
North American - All
(5)
|
$
|
128.38
|
|
|
3.1
|
%
|
|
78.7
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
163.05
|
|
|
1.9
|
%
|
(1)
|
Includes
JW Marriott
,
The Ritz-Carlton
,
W Hotels
,
The Luxury Collection
,
St. Regis
, and
EDITION
.
|
(2)
|
Includes
Marriott Hotels
,
Sheraton
,
Westin
,
Renaissance
,
Autograph Collection
,
Delta Hotels
,
Gaylord Hotels
, and
Le Méridien
. Systemwide also includes
Tribute Portfolio
.
|
(3)
|
Includes Composite North American Luxury and Composite North American Upper Upscale.
|
(4)
|
Includes
Courtyard
,
Residence Inn
,
Fairfield Inn & Suites
,
SpringHill Suites
,
TownePlace Suites
,
Four Points
,
Aloft
,
Element
, and
AC Hotels by Marriott
. Systemwide also includes
Moxy
.
|
(5)
|
Includes North American Full-Service and Composite North American Limited-Service.
|
Comparable Company-Operated International Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|||||||||
Greater China
|
$
|
95.94
|
|
|
10.0
|
%
|
|
72.7
|
%
|
|
3.9
|
%
|
pts.
|
|
$
|
131.97
|
|
|
4.1
|
%
|
Rest of Asia Pacific
|
$
|
118.98
|
|
|
6.5
|
%
|
|
72.2
|
%
|
|
1.6
|
%
|
pts.
|
|
$
|
164.70
|
|
|
4.2
|
%
|
Asia Pacific
|
$
|
104.51
|
|
|
8.5
|
%
|
|
72.5
|
%
|
|
3.0
|
%
|
pts.
|
|
$
|
144.11
|
|
|
4.0
|
%
|
Caribbean & Latin America
|
$
|
127.25
|
|
|
8.8
|
%
|
|
64.2
|
%
|
|
0.5
|
%
|
pts.
|
|
$
|
198.35
|
|
|
7.9
|
%
|
Europe
|
$
|
168.59
|
|
|
4.2
|
%
|
|
78.1
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
215.95
|
|
|
3.2
|
%
|
Middle East & Africa
|
$
|
90.93
|
|
|
(4.2
|
)%
|
|
61.1
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
148.75
|
|
|
(5.7
|
)%
|
International - All
(1)
|
$
|
118.79
|
|
|
5.2
|
%
|
|
71.0
|
%
|
|
1.9
|
%
|
pts.
|
|
$
|
167.20
|
|
|
2.4
|
%
|
Worldwide
(2)
|
$
|
140.65
|
|
|
4.1
|
%
|
|
75.6
|
%
|
|
1.3
|
%
|
pts.
|
|
$
|
186.05
|
|
|
2.3
|
%
|
Comparable Systemwide International Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2018
|
|
Change vs. Three Months Ended June 30, 2017
|
|||||||||
Greater China
|
$
|
95.72
|
|
|
9.8
|
%
|
|
72.2
|
%
|
|
3.9
|
%
|
pts.
|
|
$
|
132.54
|
|
|
3.9
|
%
|
Rest of Asia Pacific
|
$
|
121.47
|
|
|
7.7
|
%
|
|
72.9
|
%
|
|
2.2
|
%
|
pts.
|
|
$
|
166.55
|
|
|
4.4
|
%
|
Asia Pacific
|
$
|
107.16
|
|
|
8.7
|
%
|
|
72.5
|
%
|
|
3.2
|
%
|
pts.
|
|
$
|
147.73
|
|
|
4.0
|
%
|
Caribbean & Latin America
|
$
|
104.65
|
|
|
7.6
|
%
|
|
63.8
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
163.90
|
|
|
6.3
|
%
|
Europe
|
$
|
144.23
|
|
|
4.9
|
%
|
|
75.9
|
%
|
|
1.5
|
%
|
pts.
|
|
$
|
189.91
|
|
|
2.9
|
%
|
Middle East & Africa
|
$
|
88.77
|
|
|
(3.6
|
)%
|
|
61.4
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
144.48
|
|
|
(5.1
|
)%
|
International - All
(1)
|
$
|
115.31
|
|
|
5.7
|
%
|
|
70.9
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
162.63
|
|
|
2.6
|
%
|
Worldwide
(2)
|
$
|
124.53
|
|
|
3.8
|
%
|
|
76.4
|
%
|
|
1.3
|
%
|
pts.
|
|
$
|
162.94
|
|
|
2.1
|
%
|
(1)
|
Includes
Asia Pacific
,
Caribbean & Latin America
,
Europe
, and
Middle East & Africa
.
|
(2)
|
Includes North American - All and International - All.
|
Comparable Company-Operated North American Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|||||||||
JW Marriott
|
$
|
195.04
|
|
|
0.7
|
%
|
|
79.6
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
245.13
|
|
|
0.2
|
%
|
The Ritz-Carlton
|
$
|
292.65
|
|
|
4.8
|
%
|
|
76.0
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
384.87
|
|
|
3.4
|
%
|
W Hotels
|
$
|
251.39
|
|
|
3.0
|
%
|
|
81.8
|
%
|
|
(0.2
|
)%
|
pts.
|
|
$
|
307.42
|
|
|
3.2
|
%
|
Composite North American Luxury
(1)
|
$
|
270.87
|
|
|
3.9
|
%
|
|
78.9
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
343.16
|
|
|
3.1
|
%
|
Marriott Hotels
|
$
|
158.33
|
|
|
2.8
|
%
|
|
77.6
|
%
|
|
0.5
|
%
|
pts.
|
|
$
|
204.15
|
|
|
2.2
|
%
|
Sheraton
|
$
|
142.73
|
|
|
2.6
|
%
|
|
76.6
|
%
|
|
0.3
|
%
|
pts.
|
|
$
|
186.23
|
|
|
2.2
|
%
|
Westin
|
$
|
165.56
|
|
|
1.3
|
%
|
|
76.1
|
%
|
|
0.3
|
%
|
pts.
|
|
$
|
217.47
|
|
|
0.9
|
%
|
Composite North American Upper Upscale
(2)
|
$
|
153.69
|
|
|
2.5
|
%
|
|
76.7
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
200.40
|
|
|
2.0
|
%
|
North American Full-Service
(3)
|
$
|
173.17
|
|
|
2.8
|
%
|
|
77.1
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
224.71
|
|
|
2.3
|
%
|
Courtyard
|
$
|
106.16
|
|
|
1.0
|
%
|
|
73.6
|
%
|
|
0.2
|
%
|
pts.
|
|
$
|
144.15
|
|
|
0.7
|
%
|
Residence Inn
|
$
|
128.27
|
|
|
0.1
|
%
|
|
79.4
|
%
|
|
(0.6
|
)%
|
pts.
|
|
$
|
161.53
|
|
|
0.8
|
%
|
Composite North American Limited-Service
(4)
|
$
|
112.06
|
|
|
1.0
|
%
|
|
75.7
|
%
|
|
0.2
|
%
|
pts.
|
|
$
|
148.05
|
|
|
0.7
|
%
|
North American - All
(5)
|
$
|
153.91
|
|
|
2.4
|
%
|
|
76.6
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
200.85
|
|
|
1.9
|
%
|
Comparable Systemwide North American Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|||||||||
JW Marriott
|
$
|
192.70
|
|
|
1.6
|
%
|
|
79.5
|
%
|
|
0.3
|
%
|
pts.
|
|
$
|
242.39
|
|
|
1.2
|
%
|
The Ritz-Carlton
|
$
|
292.65
|
|
|
4.8
|
%
|
|
76.0
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
384.87
|
|
|
3.4
|
%
|
W Hotels
|
$
|
251.39
|
|
|
3.0
|
%
|
|
81.8
|
%
|
|
(0.2
|
)%
|
pts.
|
|
$
|
307.42
|
|
|
3.2
|
%
|
Composite North American Luxury
(1)
|
$
|
255.36
|
|
|
4.1
|
%
|
|
78.8
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
324.02
|
|
|
3.0
|
%
|
Marriott Hotels
|
$
|
133.89
|
|
|
2.4
|
%
|
|
73.7
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
181.64
|
|
|
1.8
|
%
|
Sheraton
|
$
|
113.69
|
|
|
2.4
|
%
|
|
72.6
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
156.65
|
|
|
1.8
|
%
|
Westin
|
$
|
156.61
|
|
|
1.7
|
%
|
|
76.1
|
%
|
|
0.1
|
%
|
pts.
|
|
$
|
205.67
|
|
|
1.6
|
%
|
Composite North American Upper Upscale
(2)
|
$
|
134.80
|
|
|
2.5
|
%
|
|
74.1
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
181.99
|
|
|
2.0
|
%
|
North American Full-Service
(3)
|
$
|
146.56
|
|
|
2.8
|
%
|
|
74.5
|
%
|
|
0.4
|
%
|
pts.
|
|
$
|
196.63
|
|
|
2.2
|
%
|
Courtyard
|
$
|
103.36
|
|
|
1.7
|
%
|
|
73.5
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
140.61
|
|
|
0.5
|
%
|
Residence Inn
|
$
|
117.77
|
|
|
1.9
|
%
|
|
79.4
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
148.27
|
|
|
0.7
|
%
|
Fairfield Inn & Suites
|
$
|
82.17
|
|
|
3.5
|
%
|
|
71.8
|
%
|
|
1.9
|
%
|
pts.
|
|
$
|
114.40
|
|
|
0.9
|
%
|
Composite North American Limited-Service
(4)
|
$
|
99.93
|
|
|
2.5
|
%
|
|
74.8
|
%
|
|
1.2
|
%
|
pts.
|
|
$
|
133.53
|
|
|
0.9
|
%
|
North American - All
(5)
|
$
|
120.19
|
|
|
2.7
|
%
|
|
74.7
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
160.89
|
|
|
1.5
|
%
|
(1)
|
Includes
JW Marriott
,
The Ritz-Carlton
,
W Hotels
,
The Luxury Collection
,
St. Regis
, and
EDITION
.
|
(2)
|
Includes
Marriott Hotels
,
Sheraton
,
Westin
,
Renaissance
,
Autograph Collection
,
Delta Hotels
,
Gaylord Hotels
, and
Le Méridien
. Systemwide also includes
Tribute Portfolio
.
|
(3)
|
Includes Composite North American Luxury and Composite North American Upper Upscale.
|
(4)
|
Includes
Courtyard
,
Residence Inn
,
Fairfield Inn & Suites
,
SpringHill Suites
,
TownePlace Suites
,
Four Points
,
Aloft
,
Element
, and
AC Hotels by Marriott
. Systemwide also includes
Moxy
.
|
(5)
|
Includes North American Full-Service and Composite North American Limited-Service.
|
Comparable Company-Operated International Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|||||||||
Greater China
|
$
|
94.35
|
|
|
11.0
|
%
|
|
70.8
|
%
|
|
4.6
|
%
|
pts.
|
|
$
|
133.34
|
|
|
3.8
|
%
|
Rest of Asia Pacific
|
$
|
127.98
|
|
|
7.2
|
%
|
|
74.3
|
%
|
|
1.7
|
%
|
pts.
|
|
$
|
172.15
|
|
|
4.8
|
%
|
Asia Pacific
|
$
|
106.89
|
|
|
9.3
|
%
|
|
72.1
|
%
|
|
3.5
|
%
|
pts.
|
|
$
|
148.26
|
|
|
4.0
|
%
|
Caribbean & Latin America
|
$
|
142.93
|
|
|
9.7
|
%
|
|
66.1
|
%
|
|
1.6
|
%
|
pts.
|
|
$
|
216.22
|
|
|
7.0
|
%
|
Europe
|
$
|
145.20
|
|
|
4.2
|
%
|
|
72.1
|
%
|
|
1.0
|
%
|
pts.
|
|
$
|
201.46
|
|
|
2.8
|
%
|
Middle East & Africa
|
$
|
104.87
|
|
|
(0.1
|
)%
|
|
65.5
|
%
|
|
2.5
|
%
|
pts.
|
|
$
|
160.22
|
|
|
(3.9
|
)%
|
International - All
(1)
|
$
|
118.37
|
|
|
6.3
|
%
|
|
70.4
|
%
|
|
2.6
|
%
|
pts.
|
|
$
|
168.19
|
|
|
2.4
|
%
|
Worldwide
(2)
|
$
|
136.02
|
|
|
4.1
|
%
|
|
73.5
|
%
|
|
1.5
|
%
|
pts.
|
|
$
|
185.10
|
|
|
2.0
|
%
|
Comparable Systemwide International Properties
|
||||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Change vs. Six Months Ended June 30, 2017
|
|||||||||
Greater China
|
$
|
94.00
|
|
|
10.7
|
%
|
|
70.2
|
%
|
|
4.6
|
%
|
pts.
|
|
$
|
133.92
|
|
|
3.5
|
%
|
Rest of Asia Pacific
|
$
|
127.24
|
|
|
8.2
|
%
|
|
74.3
|
%
|
|
2.0
|
%
|
pts.
|
|
$
|
171.33
|
|
|
5.4
|
%
|
Asia Pacific
|
$
|
108.77
|
|
|
9.4
|
%
|
|
72.0
|
%
|
|
3.4
|
%
|
pts.
|
|
$
|
151.07
|
|
|
4.2
|
%
|
Caribbean & Latin America
|
$
|
113.93
|
|
|
8.2
|
%
|
|
64.7
|
%
|
|
1.6
|
%
|
pts.
|
|
$
|
176.02
|
|
|
5.6
|
%
|
Europe
|
$
|
124.57
|
|
|
5.4
|
%
|
|
69.6
|
%
|
|
2.0
|
%
|
pts.
|
|
$
|
179.04
|
|
|
2.3
|
%
|
Middle East & Africa
|
$
|
101.10
|
|
|
—
|
%
|
|
65.2
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
155.17
|
|
|
(3.2
|
)%
|
International - All
(1)
|
$
|
112.98
|
|
|
6.6
|
%
|
|
69.4
|
%
|
|
2.6
|
%
|
pts.
|
|
$
|
162.78
|
|
|
2.6
|
%
|
Worldwide
(2)
|
$
|
118.07
|
|
|
3.7
|
%
|
|
73.1
|
%
|
|
1.3
|
%
|
pts.
|
|
$
|
161.42
|
|
|
1.8
|
%
|
(1)
|
Includes
Asia Pacific
,
Caribbean & Latin America
,
Europe
, and
Middle East & Africa
.
|
(2)
|
Includes North American - All and International - All.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Base management fees
|
$
|
300
|
|
|
$
|
285
|
|
|
$
|
15
|
|
|
5
|
%
|
|
$
|
573
|
|
|
$
|
549
|
|
|
$
|
24
|
|
|
4
|
%
|
Franchise fees
|
475
|
|
|
408
|
|
|
67
|
|
|
16
|
%
|
|
892
|
|
|
763
|
|
|
129
|
|
|
17
|
%
|
||||||
Incentive management fees
|
176
|
|
|
155
|
|
|
21
|
|
|
14
|
%
|
|
331
|
|
|
295
|
|
|
36
|
|
|
12
|
%
|
||||||
Gross fee revenues
|
951
|
|
|
848
|
|
|
103
|
|
|
12
|
%
|
|
1,796
|
|
|
1,607
|
|
|
189
|
|
|
12
|
%
|
||||||
Contract investment amortization
|
(13
|
)
|
|
(12
|
)
|
|
1
|
|
|
8
|
%
|
|
(31
|
)
|
|
(23
|
)
|
|
8
|
|
|
35
|
%
|
||||||
Net fee revenues
|
$
|
938
|
|
|
$
|
836
|
|
|
$
|
102
|
|
|
12
|
%
|
|
$
|
1,765
|
|
|
$
|
1,584
|
|
|
$
|
181
|
|
|
11
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Owned, leased, and other revenue
|
$
|
423
|
|
|
$
|
448
|
|
|
$
|
(25
|
)
|
|
(6
|
)%
|
|
$
|
829
|
|
|
$
|
876
|
|
|
$
|
(47
|
)
|
|
(5
|
)%
|
Owned, leased, and other - direct expenses
|
334
|
|
|
350
|
|
|
(16
|
)
|
|
(5
|
)%
|
|
670
|
|
|
706
|
|
|
(36
|
)
|
|
(5
|
)%
|
||||||
|
$
|
89
|
|
|
$
|
98
|
|
|
$
|
(9
|
)
|
|
(9
|
)%
|
|
$
|
159
|
|
|
$
|
170
|
|
|
$
|
(11
|
)
|
|
(6
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Cost reimbursement revenue
|
$
|
3,985
|
|
|
$
|
3,927
|
|
|
$
|
58
|
|
|
1
|
%
|
|
$
|
7,758
|
|
|
$
|
7,663
|
|
|
$
|
95
|
|
|
1
|
%
|
Reimbursed expenses
|
3,979
|
|
|
3,791
|
|
|
188
|
|
|
5
|
%
|
|
7,814
|
|
|
7,487
|
|
|
327
|
|
|
4
|
%
|
||||||
|
$
|
6
|
|
|
$
|
136
|
|
|
$
|
(130
|
)
|
|
(96
|
)%
|
|
$
|
(56
|
)
|
|
$
|
176
|
|
|
$
|
(232
|
)
|
|
(132
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Depreciation, amortization, and other
|
$
|
58
|
|
|
$
|
71
|
|
|
$
|
(13
|
)
|
|
(18
|
)%
|
|
$
|
112
|
|
|
$
|
122
|
|
|
$
|
(10
|
)
|
|
(8
|
)%
|
General, administrative, and other
|
217
|
|
|
234
|
|
|
(17
|
)
|
|
(7
|
)%
|
|
464
|
|
|
446
|
|
|
18
|
|
|
4
|
%
|
||||||
Merger-related costs and charges
|
18
|
|
|
21
|
|
|
(3
|
)
|
|
(14
|
)%
|
|
52
|
|
|
72
|
|
|
(20
|
)
|
|
(28
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Gains and other income, net
|
$
|
114
|
|
|
$
|
25
|
|
|
$
|
89
|
|
|
356
|
%
|
|
$
|
173
|
|
|
$
|
25
|
|
|
$
|
148
|
|
|
592
|
%
|
Interest expense
|
(85
|
)
|
|
(73
|
)
|
|
12
|
|
|
16
|
%
|
|
(160
|
)
|
|
(143
|
)
|
|
17
|
|
|
12
|
%
|
||||||
Interest income
|
6
|
|
|
8
|
|
|
(2
|
)
|
|
(25
|
)%
|
|
11
|
|
|
15
|
|
|
(4
|
)
|
|
(27
|
)%
|
||||||
Equity in earnings
|
21
|
|
|
12
|
|
|
9
|
|
|
75
|
%
|
|
34
|
|
|
23
|
|
|
11
|
|
|
48
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Provision for income taxes
|
$
|
(186
|
)
|
|
$
|
(227
|
)
|
|
$
|
(41
|
)
|
|
(18
|
)%
|
|
$
|
(290
|
)
|
|
$
|
(350
|
)
|
|
$
|
(60
|
)
|
|
(17
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Segment revenues
|
$
|
3,356
|
|
|
$
|
3,277
|
|
|
$
|
79
|
|
|
2
|
%
|
|
$
|
6,655
|
|
|
$
|
6,517
|
|
|
$
|
138
|
|
|
2
|
%
|
Segment profits
|
$
|
394
|
|
|
$
|
375
|
|
|
$
|
19
|
|
|
5
|
%
|
|
$
|
671
|
|
|
$
|
677
|
|
|
$
|
(6
|
)
|
|
(1
|
)%
|
•
|
$16 million
of
higher
base management and franchise fees, primarily reflecting $8 million from RevPAR growth and $6 million from unit growth;
|
•
|
$12 million
of
higher
incentive management fees, primarily driven by higher net house profits;
|
•
|
$23 million
of
lower
owned, leased, and other revenue, net of direct expenses, primarily reflecting $17 million of lower owned and leased profits from properties sold and a $5 million unfavorable variance with the business interruption insurance proceeds recorded in the 2017 second quarter;
|
•
|
$2 million
of
lower
gains and other income, net, primarily due to a $24 million unfavorable variance with the gain on the sale of a property in 2017, partially offset by the $22 million gain on the sale of two properties in 2018;
|
•
|
$11 million
of
higher
equity in earnings, primarily due to our $10 million share of the gain on an equity method investee’s sale of a property; and
|
•
|
$6 million
of
lower
cost reimbursement revenue, net of reimbursed expenses.
|
•
|
$36 million
of
lower
cost reimbursement revenue, net of reimbursed expenses;
|
•
|
$25 million
of
higher
base management and franchise fees, primarily reflecting $12 million from RevPAR growth and $11 million from unit growth;
|
•
|
$13 million
of
higher
incentive management fees, primarily driven by higher net house profits;
|
•
|
$27 million
of
lower
owned, leased, and other revenue, net of direct expenses, primarily reflecting $40 million of lower owned and leased profits from properties sold and a $5 million unfavorable variance with the business interruption insurance proceeds recorded in the 2017 second quarter, partially offset by $17 million of higher termination fees;
|
•
|
Unchanged
gains and other income, net, primarily due to the same reasons described in the preceding “Second Quarter”
discussion; and
|
•
|
$9 million
of
higher
equity in earnings, primarily due to the change described in the preceding “Second Quarter”
discussion.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Segment revenues
|
$
|
888
|
|
|
$
|
836
|
|
|
$
|
52
|
|
|
6
|
%
|
|
$
|
1,649
|
|
|
$
|
1,577
|
|
|
$
|
72
|
|
|
5
|
%
|
Segment profits
|
$
|
252
|
|
|
$
|
243
|
|
|
$
|
9
|
|
|
4
|
%
|
|
$
|
434
|
|
|
$
|
430
|
|
|
$
|
4
|
|
|
1
|
%
|
•
|
$21 million
of
higher
base management and franchise fees, primarily reflecting $15 million from unit growth; and
|
•
|
$13 million
of
lower
cost reimbursement revenue, net of reimbursed expenses.
|
•
|
$37 million
of
higher
base management and franchise fees, primarily reflecting $26 million from unit growth and $9 million from RevPAR growth; and
|
•
|
$34 million
of
lower
cost reimbursement revenue, net of reimbursed expenses.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Change 2018 vs. 2017
|
||||||||||||||||||
Segment revenues
|
$
|
268
|
|
|
$
|
252
|
|
|
$
|
16
|
|
|
6
|
%
|
|
$
|
543
|
|
|
$
|
493
|
|
|
$
|
50
|
|
|
10
|
%
|
Segment profits
|
$
|
140
|
|
|
$
|
73
|
|
|
$
|
67
|
|
|
92
|
%
|
|
$
|
252
|
|
|
$
|
167
|
|
|
$
|
85
|
|
|
51
|
%
|
•
|
$55 million
of
higher
gains and other income, net, primarily reflecting the $45 million gain on the sale of two properties and $9 million from the gain on the sale of our interest in an equity method investment; and
|
•
|
$1 million
of
higher
cost reimbursement revenue, net of reimbursed expenses.
|
•
|
$13 million
of
higher
base management and franchise fees, primarily reflecting $6 million from unit growth and $6 million from RevPAR growth;
|
•
|
$19 million
of
higher
incentive management fees primarily driven by higher net house profits, $5 million from favorable foreign exchange rates, and $4 million from unit growth;
|
•
|
$54 million
of
higher
gains and other income, net, primarily due to the same reasons described in the preceding “Second Quarter”
discussion; and
|
•
|
$5 million
of
lower
cost reimbursement revenue, net of reimbursed expenses.
|
(a)
|
Unregistered Sale of Securities
|
(b)
|
Use of Proceeds
|
(c)
|
Issuer Purchases of Equity Securities
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|||||
Period
|
|
Total Number
of Shares
Purchased
|
|
Average Price
per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
(1)
|
|||||
April 1, 2018 - April 30, 2018
|
|
1.5
|
|
|
$
|
134.62
|
|
|
1.5
|
|
|
25.1
|
|
May 1, 2018 - May 31, 2018
|
|
2.6
|
|
|
$
|
136.78
|
|
|
2.6
|
|
|
22.5
|
|
June 1, 2018 - June 30, 2018
|
|
2.1
|
|
|
$
|
136.58
|
|
|
2.1
|
|
|
20.4
|
|
(1)
|
On November 9, 2017, we announced that our Board of Directors increased our common stock repurchase authorization by 30 million shares. As of
June 30, 2018
,
20.4 million
shares remained available for repurchase under Board approved authorizations. We repurchase shares in the open market and in privately negotiated transactions.
|
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)
|
3.1
|
|
Restated Certificate of Incorporation.
|
|
|
|
|
|
||
3.2
|
|
Amended and Restated Bylaws.
|
|
|
|
|
|
|
|
*10.1
|
|
Summary of Marriott International, Inc. Director Compensation.
|
|
|
|
|
|
|
|
12
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
||
31.1
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).
|
|
|
|
|
|
||
31.2
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).
|
|
|
|
|
|
||
32
|
|
Section 1350 Certifications.
|
|
|
|
|
|
||
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.
|
7
th
day of August, 2018
|
|
/s/ Bao Giang Val Bauduin
|
Bao Giang Val Bauduin
|
Controller and Chief Accounting Officer
(Duly Authorized Officer) |
Board Retainer Fee (annual)
|
$85,000
|
Share Award (annual)
|
$165,000
|
Audit Committee Chair Fee (annual)
|
$20,000
|
Other (non-Audit) Committee Chair Fee (annual)
|
$10,000
|
Audit Committee Member Retainer (annual)
|
$10,000
|
Lead Independent Director Fee (annual)
|
$30,000
|
|
|
Six Months Ended
|
||||||
($ in millions, except ratio)
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
Income before income taxes
|
|
$
|
1,298
|
|
|
$
|
1,210
|
|
Income related to equity method investees
|
|
(34
|
)
|
|
(23
|
)
|
||
|
|
1,264
|
|
|
1,187
|
|
||
Add/(deduct):
|
|
|
|
|
||||
Fixed charges
|
|
198
|
|
|
179
|
|
||
Interest capitalized
|
|
(1
|
)
|
|
—
|
|
||
Distributed income of equity method investees
|
|
20
|
|
|
16
|
|
||
Earnings available for fixed charges
|
|
$
|
1,481
|
|
|
$
|
1,382
|
|
Fixed charges:
|
|
|
|
|
||||
Interest expensed and capitalized
(1)
|
|
$
|
161
|
|
|
$
|
143
|
|
Estimate of interest within rent expense
|
|
37
|
|
|
36
|
|
||
Total fixed charges
|
|
$
|
198
|
|
|
$
|
179
|
|
Ratio of earnings to fixed charges
|
|
7.5
|
|
|
7.7
|
|
(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.
|
7
th
day of August, 2018
|
/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.
|
7
th
day of August, 2018
|
/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
June 30, 2018
, (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.
|
7
th
day of August, 2018
|
/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
June 30, 2018
, (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.
|
7
th
day of August, 2018
|
/s/ Kathleen K. Oberg
|
|
Kathleen K. Oberg
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|