☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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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
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Bethesda
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Maryland
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20817
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Class A Common Stock, $0.01 par value
|
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MAR
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Nasdaq Global Select Market
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Class A Common Stock, $0.01 par value
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MAR
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Chicago Stock Exchange
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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, 2019
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|
June 30, 2018
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June 30, 2019
|
|
June 30, 2018
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Base management fees
|
$
|
309
|
|
|
$
|
300
|
|
|
$
|
591
|
|
|
$
|
573
|
|
Franchise fees
|
525
|
|
|
475
|
|
|
975
|
|
|
892
|
|
||||
Incentive management fees
|
165
|
|
|
176
|
|
|
328
|
|
|
331
|
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||||
Gross fee revenues
|
999
|
|
|
951
|
|
|
1,894
|
|
|
1,796
|
|
||||
Contract investment amortization
|
(15
|
)
|
|
(13
|
)
|
|
(29
|
)
|
|
(31
|
)
|
||||
Net fee revenues
|
984
|
|
|
938
|
|
|
1,865
|
|
|
1,765
|
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||||
Owned, leased, and other revenue
|
418
|
|
|
423
|
|
|
793
|
|
|
829
|
|
||||
Cost reimbursement revenue
|
3,903
|
|
|
4,048
|
|
|
7,659
|
|
|
7,824
|
|
||||
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5,305
|
|
|
5,409
|
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10,317
|
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10,418
|
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||||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
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||||||||
Owned, leased, and other-direct
|
331
|
|
|
334
|
|
|
656
|
|
|
670
|
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||||
Depreciation, amortization, and other
|
56
|
|
|
58
|
|
|
110
|
|
|
112
|
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||||
General, administrative, and other
|
229
|
|
|
217
|
|
|
451
|
|
|
464
|
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||||
Merger-related costs and charges
|
173
|
|
|
18
|
|
|
182
|
|
|
52
|
|
||||
Reimbursed expenses
|
4,107
|
|
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3,964
|
|
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7,999
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|
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7,772
|
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||||
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4,896
|
|
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4,591
|
|
|
9,398
|
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9,070
|
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||||
OPERATING INCOME
|
409
|
|
|
818
|
|
|
919
|
|
|
1,348
|
|
||||
Gains and other income, net
|
1
|
|
|
114
|
|
|
6
|
|
|
173
|
|
||||
Interest expense
|
(102
|
)
|
|
(85
|
)
|
|
(199
|
)
|
|
(160
|
)
|
||||
Interest income
|
6
|
|
|
6
|
|
|
12
|
|
|
11
|
|
||||
Equity in earnings
|
—
|
|
|
21
|
|
|
8
|
|
|
34
|
|
||||
INCOME BEFORE INCOME TAXES
|
314
|
|
|
874
|
|
|
746
|
|
|
1,406
|
|
||||
Provision for income taxes
|
(82
|
)
|
|
(207
|
)
|
|
(139
|
)
|
|
(319
|
)
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||||
NET INCOME
|
$
|
232
|
|
|
$
|
667
|
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$
|
607
|
|
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$
|
1,087
|
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EARNINGS PER SHARE
|
|
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||||||||
Earnings per share - basic
|
$
|
0.70
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|
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$
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1.89
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|
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$
|
1.80
|
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$
|
3.06
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Earnings per share - diluted
|
$
|
0.69
|
|
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$
|
1.87
|
|
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$
|
1.79
|
|
|
$
|
3.02
|
|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Net income
|
$
|
232
|
|
|
$
|
667
|
|
|
$
|
607
|
|
|
$
|
1,087
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
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||||||||
Foreign currency translation adjustments
|
38
|
|
|
(399
|
)
|
|
71
|
|
|
(247
|
)
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||||
Derivative instrument adjustments and other, net of tax
|
(1
|
)
|
|
11
|
|
|
(2
|
)
|
|
8
|
|
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Reclassification of (income) loss, net of tax
|
(3
|
)
|
|
3
|
|
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(4
|
)
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16
|
|
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Total other comprehensive income (loss), net of tax
|
34
|
|
|
(385
|
)
|
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65
|
|
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(223
|
)
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Comprehensive income
|
$
|
266
|
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$
|
282
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$
|
672
|
|
|
$
|
864
|
|
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(Unaudited)
|
|
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June 30,
2019 |
|
December 31,
2018 |
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ASSETS
|
|
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Current assets
|
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Cash and equivalents
|
$
|
284
|
|
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$
|
316
|
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Accounts and notes receivable, net
|
2,328
|
|
|
2,133
|
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Prepaid expenses and other
|
257
|
|
|
257
|
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|
2,869
|
|
|
2,706
|
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Property and equipment, net
|
1,945
|
|
|
1,956
|
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Intangible assets
|
|
|
|
||||
Brands
|
5,968
|
|
|
5,790
|
|
||
Contract acquisition costs and other
|
2,646
|
|
|
2,590
|
|
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Goodwill
|
9,067
|
|
|
9,039
|
|
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|
17,681
|
|
|
17,419
|
|
||
Equity method investments
|
580
|
|
|
732
|
|
||
Notes receivable, net
|
97
|
|
|
125
|
|
||
Deferred tax assets
|
171
|
|
|
171
|
|
||
Operating lease assets
|
977
|
|
|
—
|
|
||
Other noncurrent assets
|
573
|
|
|
587
|
|
||
|
$
|
24,893
|
|
|
$
|
23,696
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
229
|
|
|
$
|
833
|
|
Accounts payable
|
927
|
|
|
767
|
|
||
Accrued payroll and benefits
|
1,067
|
|
|
1,345
|
|
||
Liability for guest loyalty program
|
2,157
|
|
|
2,529
|
|
||
Accrued expenses and other
|
1,244
|
|
|
963
|
|
||
|
5,624
|
|
|
6,437
|
|
||
Long-term debt
|
10,185
|
|
|
8,514
|
|
||
Liability for guest loyalty program
|
3,530
|
|
|
2,932
|
|
||
Deferred tax liabilities
|
359
|
|
|
485
|
|
||
Deferred revenue
|
768
|
|
|
731
|
|
||
Operating lease liabilities
|
893
|
|
|
—
|
|
||
Other noncurrent liabilities
|
2,294
|
|
|
2,372
|
|
||
Shareholders’ equity
|
|
|
|
||||
Class A Common Stock
|
5
|
|
|
5
|
|
||
Additional paid-in-capital
|
5,729
|
|
|
5,814
|
|
||
Retained earnings
|
9,292
|
|
|
8,982
|
|
||
Treasury stock, at cost
|
(13,460
|
)
|
|
(12,185
|
)
|
||
Accumulated other comprehensive loss
|
(326
|
)
|
|
(391
|
)
|
||
|
1,240
|
|
|
2,225
|
|
||
|
$
|
24,893
|
|
|
$
|
23,696
|
|
|
Six Months Ended
|
||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
607
|
|
|
$
|
1,087
|
|
Adjustments to reconcile to cash provided by operating activities:
|
|
|
|
||||
Depreciation, amortization, and other
|
139
|
|
|
143
|
|
||
Share-based compensation
|
90
|
|
|
93
|
|
||
Income taxes
|
(102
|
)
|
|
(170
|
)
|
||
Liability for guest loyalty program
|
226
|
|
|
360
|
|
||
Contract acquisition costs
|
(93
|
)
|
|
(71
|
)
|
||
Merger-related charges
|
142
|
|
|
(23
|
)
|
||
Working capital changes
|
(379
|
)
|
|
(166
|
)
|
||
Gain on asset dispositions
|
(6
|
)
|
|
(173
|
)
|
||
Other
|
114
|
|
|
49
|
|
||
Net cash provided by operating activities
|
738
|
|
|
1,129
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(142
|
)
|
|
(388
|
)
|
||
Dispositions
|
2
|
|
|
436
|
|
||
Loan advances
|
(10
|
)
|
|
(13
|
)
|
||
Loan collections
|
6
|
|
|
29
|
|
||
Other
|
(30
|
)
|
|
50
|
|
||
Net cash (used in) provided by investing activities
|
(174
|
)
|
|
114
|
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Commercial paper/Credit Facility, net
|
823
|
|
|
707
|
|
||
Issuance of long-term debt
|
841
|
|
|
443
|
|
||
Repayment of long-term debt
|
(617
|
)
|
|
(387
|
)
|
||
Issuance of Class A Common Stock
|
6
|
|
|
4
|
|
||
Dividends paid
|
(298
|
)
|
|
(262
|
)
|
||
Purchase of treasury stock
|
(1,228
|
)
|
|
(1,673
|
)
|
||
Share-based compensation withholding taxes
|
(123
|
)
|
|
(101
|
)
|
||
Other
|
(8
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(604
|
)
|
|
(1,269
|
)
|
||
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
(40
|
)
|
|
(26
|
)
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period (1)
|
360
|
|
|
429
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period (1)
|
$
|
320
|
|
|
$
|
403
|
|
(1)
|
The 2019 amounts include beginning restricted cash of $44 million at December 31, 2018, and ending restricted cash of $36 million at June 30, 2019, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.
|
•
|
Whether any expired or existing contracts are or contain leases under the new definition;
|
•
|
The lease classification for any expired or existing leases; or
|
•
|
Whether previously capitalized costs continue to qualify as initial direct costs.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in millions, except per share amounts)
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
Computation of Basic Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
232
|
|
|
$
|
667
|
|
|
$
|
607
|
|
|
$
|
1,087
|
|
Shares for basic earnings per share
|
333.8
|
|
|
353.4
|
|
|
336.7
|
|
|
355.9
|
|
||||
Basic earnings per share
|
$
|
0.70
|
|
|
$
|
1.89
|
|
|
$
|
1.80
|
|
|
$
|
3.06
|
|
Computation of Diluted Earnings Per Share
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
232
|
|
|
$
|
667
|
|
|
$
|
607
|
|
|
$
|
1,087
|
|
Shares for basic earnings per share
|
333.8
|
|
|
353.4
|
|
|
336.7
|
|
|
355.9
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||||
Share-based compensation
|
2.6
|
|
|
3.9
|
|
|
2.9
|
|
|
4.4
|
|
||||
Shares for diluted earnings per share
|
336.4
|
|
|
357.3
|
|
|
339.6
|
|
|
360.3
|
|
||||
Diluted earnings per share
|
$
|
0.69
|
|
|
$
|
1.87
|
|
|
$
|
1.79
|
|
|
$
|
3.02
|
|
($ in millions)
Guarantee Type
|
|
Maximum Potential Amount of Future Fundings
|
|
Recorded Liability for Guarantees
|
||||
Debt service
|
|
$
|
109
|
|
|
$
|
11
|
|
Operating profit
|
|
198
|
|
|
92
|
|
||
Other
|
|
8
|
|
|
1
|
|
||
|
|
$
|
315
|
|
|
$
|
104
|
|
|
|
June 30, 2019
|
||||||
($ in millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
Operating lease cost
|
|
$
|
46
|
|
|
$
|
91
|
|
Variable lease cost
|
|
31
|
|
|
58
|
|
($ in millions)
|
Operating Leases
|
|
Finance Leases
|
||||
2019, remaining
|
$
|
90
|
|
|
$
|
6
|
|
2020
|
164
|
|
|
13
|
|
||
2021
|
148
|
|
|
13
|
|
||
2022
|
142
|
|
|
13
|
|
||
2023
|
114
|
|
|
13
|
|
||
Thereafter
|
680
|
|
|
165
|
|
||
Total minimum lease payments
|
$
|
1,338
|
|
|
$
|
223
|
|
Less: Amount representing interest
|
(318
|
)
|
|
(63
|
)
|
||
Present value of minimum lease payments
|
$
|
1,020
|
|
|
$
|
160
|
|
|
June 30, 2019
|
|
Weighted Average Remaining Lease Term (in years)
|
|
|
Operating leases
|
11
|
|
Finance leases
|
15
|
|
Weighted Average Discount Rate
|
|
|
Operating leases
|
5.0
|
%
|
Finance leases
|
4.4
|
%
|
($ in millions)
|
Caption
|
|
June 30, 2019
|
||
Operating lease liabilities
|
|
|
|
||
Current
|
Accrued expenses and other
|
|
$
|
127
|
|
Noncurrent
|
Operating lease liabilities
|
|
893
|
|
|
|
|
|
$
|
1,020
|
|
Finance lease liabilities
|
|
|
|
||
Current
|
Current portion of long-term debt
|
|
$
|
6
|
|
Noncurrent
|
Long-term debt
|
|
154
|
|
|
|
|
|
$
|
160
|
|
|
Six Months Ended
|
||
($ in millions)
|
June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash outflows for operating leases
|
$
|
89
|
|
Operating cash outflows for finance leases
|
4
|
|
|
Financing cash outflows for finance leases
|
3
|
|
|
At Period End
|
||||||
($ in millions)
|
June 30,
2019 |
|
December 31,
2018 |
||||
Senior Notes:
|
|
|
|
||||
Series K Notes, interest rate of 3.0%, face amount of $600, matured March 1, 2019
(effective interest rate of 4.4%) |
$
|
—
|
|
|
$
|
600
|
|
Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022
(effective interest rate of 3.4%) |
349
|
|
|
349
|
|
||
Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020
(effective interest rate of 3.6%) |
349
|
|
|
349
|
|
||
Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021
(effective interest rate of 3.4%) |
398
|
|
|
397
|
|
||
Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021
(effective interest rate of 3.1%) |
449
|
|
|
448
|
|
||
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%) |
746
|
|
|
745
|
|
||
Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026
(effective interest rate of 3.3%) |
744
|
|
|
743
|
|
||
Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019
(effective interest rate of 2.3%) |
184
|
|
|
188
|
|
||
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%) |
334
|
|
|
335
|
|
||
Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034
(effective interest rate of 4.1%) |
291
|
|
|
292
|
|
||
Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028
(effective interest rate of 4.2%)
|
444
|
|
|
443
|
|
||
Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020
(effective interest rate of 3.1% at June 30, 2019)
|
548
|
|
|
547
|
|
||
Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023
(effective interest rate of 4.4%)
|
347
|
|
|
347
|
|
||
Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028
(effective interest rate of 4.8%)
|
297
|
|
|
297
|
|
||
Series BB Notes, floating rate, face amount of $300, maturing March 8, 2021
(effective interest rate of 3.1% at June 30, 2019)
|
299
|
|
|
—
|
|
||
Series CC Notes, interest rate of 3.6%, face amount of $550, maturing April 15, 2024
(effective interest rate of 3.9%)
|
564
|
|
|
—
|
|
||
|
|
|
|
||||
Commercial paper
|
3,069
|
|
|
2,245
|
|
||
Credit Facility
|
—
|
|
|
—
|
|
||
Finance lease obligations
|
160
|
|
|
163
|
|
||
Other
|
206
|
|
|
223
|
|
||
|
$
|
10,414
|
|
|
$
|
9,347
|
|
Less: Current portion of long-term debt
|
(229
|
)
|
|
(833
|
)
|
||
|
$
|
10,185
|
|
|
$
|
8,514
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
($ in millions)
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
Senior, mezzanine, and other loans
|
$
|
97
|
|
|
$
|
94
|
|
|
$
|
125
|
|
|
$
|
116
|
|
Total noncurrent financial assets
|
$
|
97
|
|
|
$
|
94
|
|
|
$
|
125
|
|
|
$
|
116
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes
|
$
|
(6,795
|
)
|
|
$
|
(6,994
|
)
|
|
$
|
(5,928
|
)
|
|
$
|
(5,794
|
)
|
Commercial paper
|
(3,069
|
)
|
|
(3,069
|
)
|
|
(2,245
|
)
|
|
(2,245
|
)
|
||||
Other long-term debt
|
(167
|
)
|
|
(175
|
)
|
|
(184
|
)
|
|
(182
|
)
|
||||
Other noncurrent liabilities
|
(143
|
)
|
|
(143
|
)
|
|
(153
|
)
|
|
(153
|
)
|
||||
Total noncurrent financial liabilities
|
$
|
(10,174
|
)
|
|
$
|
(10,381
|
)
|
|
$
|
(8,510
|
)
|
|
$
|
(8,374
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument and Other Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||
Balance at year-end 2018
|
$
|
(403
|
)
|
|
$
|
12
|
|
|
$
|
(391
|
)
|
Other comprehensive income (loss) before reclassifications (1)
|
71
|
|
|
(2
|
)
|
|
69
|
|
|||
Reclassification of income
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Net other comprehensive income (loss)
|
71
|
|
|
(6
|
)
|
|
65
|
|
|||
Balance at June 30, 2019
|
$
|
(332
|
)
|
|
$
|
6
|
|
|
$
|
(326
|
)
|
($ in millions)
|
Foreign Currency Translation Adjustments
|
|
Derivative Instrument and Other Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||
Balance at year-end 2017
|
$
|
(23
|
)
|
|
$
|
6
|
|
|
$
|
(17
|
)
|
Other comprehensive income (loss) before reclassifications (1)
|
(247
|
)
|
|
8
|
|
|
(239
|
)
|
|||
Reclassification of losses
|
8
|
|
|
8
|
|
|
16
|
|
|||
Net other comprehensive income
|
(239
|
)
|
|
16
|
|
|
(223
|
)
|
|||
Adoption of ASU 2016-01
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Balance at June 30, 2018
|
$
|
(262
|
)
|
|
$
|
18
|
|
|
$
|
(244
|
)
|
(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 gains of $2 million for the 2019 first half and $38 million for the 2018 first half.
|
(1)
|
At the end of the 2019 second quarter, we made purchases of shares of our common stock totaling $100 million, which settled in cash in the 2019 third quarter.
|
(in millions, except per share amounts)
|
|
|
||||||||||||||||||||||||
Common
Shares
Outstanding
|
|
|
Total
|
|
Class A
Common
Stock
|
|
Additional
Paid-in-
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock,
at Cost
|
|
Accumulated
Other
Comprehensive
Loss
|
|||||||||||||
359.1
|
|
|
Balance at year-end 2017 (as previously reported)
|
$
|
3,731
|
|
|
$
|
5
|
|
|
$
|
5,770
|
|
|
$
|
7,391
|
|
|
$
|
(9,418
|
)
|
|
$
|
(17
|
)
|
—
|
|
|
Adoption of ASU 2014-09
|
(149
|
)
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
—
|
|
|
—
|
|
||||||
359.1
|
|
|
Balance at year-end 2017 (as adjusted)
|
3,582
|
|
|
5
|
|
|
5,770
|
|
|
7,242
|
|
|
(9,418
|
)
|
|
(17
|
)
|
||||||
—
|
|
|
Adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
||||||
—
|
|
|
Adoption of ASU 2016-16
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|
—
|
|
|
—
|
|
||||||
—
|
|
|
Net income
|
420
|
|
|
—
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
—
|
|
||||||
—
|
|
|
Other comprehensive income
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
||||||
—
|
|
|
Dividends ($0.33 per share)
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
||||||
1.3
|
|
|
Share-based compensation plans
|
(48
|
)
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
37
|
|
|
—
|
|
||||||
(5.6
|
)
|
|
Purchase of treasury stock
|
(782
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(782
|
)
|
|
—
|
|
||||||
354.8
|
|
|
Balance at March 31, 2018
|
3,588
|
|
|
5
|
|
|
5,685
|
|
|
7,920
|
|
|
(10,163
|
)
|
|
141
|
|
||||||
—
|
|
|
Net income
|
667
|
|
|
—
|
|
|
—
|
|
|
667
|
|
|
—
|
|
|
—
|
|
||||||
—
|
|
|
Other comprehensive income
|
(385
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(385
|
)
|
||||||
—
|
|
|
Dividends ($0.41 per share)
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
||||||
0.1
|
|
|
Share-based compensation plans
|
45
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
(6.2
|
)
|
|
Purchase of treasury stock
|
(850
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(850
|
)
|
|
—
|
|
||||||
348.7
|
|
|
Balance at June 30, 2018
|
$
|
2,920
|
|
|
$
|
5
|
|
|
$
|
5,728
|
|
|
$
|
8,442
|
|
|
$
|
(11,011
|
)
|
|
$
|
(244
|
)
|
•
|
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 June 30, 2019
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
349
|
|
|
$
|
264
|
|
|
$
|
112
|
|
|
$
|
142
|
|
|
$
|
867
|
|
Contract investment amortization
|
(8
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|||||
Net fee revenues
|
341
|
|
|
261
|
|
|
111
|
|
|
139
|
|
|
852
|
|
|||||
Owned, leased, and other revenue
|
147
|
|
|
38
|
|
|
50
|
|
|
168
|
|
|
403
|
|
|||||
Cost reimbursement revenue
|
2,915
|
|
|
602
|
|
|
149
|
|
|
306
|
|
|
3,972
|
|
|||||
Total segment revenue
|
$
|
3,403
|
|
|
$
|
901
|
|
|
$
|
310
|
|
|
$
|
613
|
|
|
$
|
5,227
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
78
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
5,305
|
|
|
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
|
|
|
576
|
|
|
111
|
|
|
303
|
|
|
3,868
|
|
|||||
Total segment revenue
|
$
|
3,356
|
|
|
$
|
860
|
|
|
$
|
268
|
|
|
$
|
607
|
|
|
$
|
5,091
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
318
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
5,409
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
($ in millions)
|
North American Full-Service
|
|
North American Limited-Service
|
|
Asia Pacific
|
|
Other International
|
|
Total
|
||||||||||
Gross fee revenues
|
$
|
665
|
|
|
$
|
476
|
|
|
$
|
230
|
|
|
$
|
271
|
|
|
$
|
1,642
|
|
Contract investment amortization
|
(16
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
(29
|
)
|
|||||
Net fee revenues
|
649
|
|
|
470
|
|
|
229
|
|
|
265
|
|
|
1,613
|
|
|||||
Owned, leased, and other revenue
|
294
|
|
|
69
|
|
|
91
|
|
|
312
|
|
|
766
|
|
|||||
Cost reimbursement revenue
|
5,765
|
|
|
1,131
|
|
|
260
|
|
|
565
|
|
|
7,721
|
|
|||||
Total segment revenue
|
$
|
6,708
|
|
|
$
|
1,670
|
|
|
$
|
580
|
|
|
$
|
1,142
|
|
|
$
|
10,100
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
217
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
10,317
|
|
|
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
|
|
|
1,090
|
|
|
222
|
|
|
554
|
|
|
7,600
|
|
|||||
Total segment revenue
|
$
|
6,655
|
|
|
$
|
1,600
|
|
|
$
|
543
|
|
|
$
|
1,134
|
|
|
$
|
9,932
|
|
Unallocated corporate
|
|
|
|
|
|
|
|
|
486
|
|
|||||||||
Total revenue
|
|
|
|
|
|
|
|
|
$
|
10,418
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
North American Full-Service
|
$
|
338
|
|
|
$
|
394
|
|
|
$
|
627
|
|
|
$
|
671
|
|
North American Limited-Service
|
253
|
|
|
252
|
|
|
455
|
|
|
434
|
|
||||
Asia Pacific
|
92
|
|
|
140
|
|
|
195
|
|
|
252
|
|
||||
Other International
|
118
|
|
|
160
|
|
|
213
|
|
|
319
|
|
||||
Unallocated corporate
|
(391
|
)
|
|
7
|
|
|
(557
|
)
|
|
(121
|
)
|
||||
Interest expense, net of interest income
|
(96
|
)
|
|
(79
|
)
|
|
(187
|
)
|
|
(149
|
)
|
||||
Income taxes
|
(82
|
)
|
|
(207
|
)
|
|
(139
|
)
|
|
(319
|
)
|
||||
Net Income
|
$
|
232
|
|
|
$
|
667
|
|
|
$
|
607
|
|
|
$
|
1,087
|
|
|
Managed
|
|
Franchised/Licensed
|
|
Owned/Leased
|
|
Total
|
||||||||||||||||
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
|
Properties
|
|
Rooms
|
||||||||
North American Full-Service
|
407
|
|
|
182,784
|
|
|
723
|
|
|
206,573
|
|
|
9
|
|
|
5,275
|
|
|
1,139
|
|
|
394,632
|
|
North American Limited-Service
|
403
|
|
|
63,703
|
|
|
3,599
|
|
|
418,698
|
|
|
20
|
|
|
3,006
|
|
|
4,022
|
|
|
485,407
|
|
Asia Pacific
|
629
|
|
|
183,068
|
|
|
111
|
|
|
29,513
|
|
|
2
|
|
|
410
|
|
|
742
|
|
|
212,991
|
|
Other International
|
597
|
|
|
130,124
|
|
|
479
|
|
|
92,045
|
|
|
32
|
|
|
8,410
|
|
|
1,108
|
|
|
230,579
|
|
Timeshare
|
—
|
|
|
—
|
|
|
89
|
|
|
22,297
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
22,297
|
|
Total
|
2,036
|
|
|
559,679
|
|
|
5,001
|
|
|
769,126
|
|
|
63
|
|
|
17,101
|
|
|
7,100
|
|
|
1,345,906
|
|
Comparable Company-Operated Properties
|
||||||||||||||||||||
|
Three Months Ended June 30, 2019 and Change vs. Three Months Ended June 30, 2018
|
|||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|||||||||
North American Luxury (1)
|
$
|
275.85
|
|
|
1.1
|
%
|
|
79.7
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
346.25
|
|
|
1.4
|
%
|
North American Upper Upscale (2)
|
$
|
166.44
|
|
|
—
|
%
|
|
80.6
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
206.52
|
|
|
0.4
|
%
|
North American Full-Service (3)
|
$
|
185.28
|
|
|
0.3
|
%
|
|
80.4
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
230.35
|
|
|
0.6
|
%
|
North American Limited-Service (4)
|
$
|
119.48
|
|
|
(0.7
|
)%
|
|
78.9
|
%
|
|
(0.9
|
)%
|
pts.
|
|
$
|
151.53
|
|
|
0.5
|
%
|
North American - All (5)
|
$
|
164.36
|
|
|
0.1
|
%
|
|
79.9
|
%
|
|
(0.5
|
)%
|
pts.
|
|
$
|
205.63
|
|
|
0.7
|
%
|
Greater China
|
$
|
86.00
|
|
|
2.5
|
%
|
|
69.7
|
%
|
|
2.0
|
%
|
pts.
|
|
$
|
123.48
|
|
|
(0.4
|
)%
|
Rest of Asia Pacific
|
$
|
116.01
|
|
|
5.5
|
%
|
|
73.3
|
%
|
|
3.1
|
%
|
pts.
|
|
$
|
158.35
|
|
|
1.0
|
%
|
Asia Pacific
|
$
|
98.71
|
|
|
3.9
|
%
|
|
71.2
|
%
|
|
2.4
|
%
|
pts.
|
|
$
|
138.68
|
|
|
0.4
|
%
|
Caribbean & Latin America
|
$
|
125.25
|
|
|
0.6
|
%
|
|
65.0
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
192.59
|
|
|
(0.6
|
)%
|
Europe
|
$
|
164.67
|
|
|
4.3
|
%
|
|
78.7
|
%
|
|
1.2
|
%
|
pts.
|
|
$
|
209.25
|
|
|
2.7
|
%
|
Middle East & Africa
|
$
|
97.58
|
|
|
(0.7
|
)%
|
|
64.0
|
%
|
|
2.8
|
%
|
pts.
|
|
$
|
152.51
|
|
|
(5.1
|
)%
|
International - All (6)
|
$
|
115.69
|
|
|
3.1
|
%
|
|
71.2
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
162.54
|
|
|
—
|
%
|
Worldwide (7)
|
$
|
140.01
|
|
|
1.3
|
%
|
|
75.5
|
%
|
|
0.8
|
%
|
pts.
|
|
$
|
185.32
|
|
|
0.2
|
%
|
Comparable Systemwide Properties
|
||||||||||||||||||||
|
Three Months Ended June 30, 2019 and Change vs. Three Months Ended June 30, 2018
|
|||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|||||||||
North American Luxury (1)
|
$
|
262.53
|
|
|
1.0
|
%
|
|
79.7
|
%
|
|
(0.5
|
)%
|
pts.
|
|
$
|
329.31
|
|
|
1.6
|
%
|
North American Upper Upscale (2)
|
$
|
145.11
|
|
|
1.2
|
%
|
|
77.7
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
186.70
|
|
|
1.6
|
%
|
North American Full-Service (3)
|
$
|
156.53
|
|
|
1.2
|
%
|
|
77.9
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
200.90
|
|
|
1.5
|
%
|
North American Limited-Service (4)
|
$
|
108.32
|
|
|
0.1
|
%
|
|
78.2
|
%
|
|
(0.7
|
)%
|
pts.
|
|
$
|
138.59
|
|
|
1.0
|
%
|
North American - All (5)
|
$
|
128.80
|
|
|
0.7
|
%
|
|
78.1
|
%
|
|
(0.5
|
)%
|
pts.
|
|
$
|
165.01
|
|
|
1.3
|
%
|
Greater China
|
$
|
85.34
|
|
|
2.6
|
%
|
|
69.3
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
123.22
|
|
|
(0.5
|
)%
|
Rest of Asia Pacific
|
$
|
116.27
|
|
|
4.4
|
%
|
|
73.0
|
%
|
|
2.3
|
%
|
pts.
|
|
$
|
159.29
|
|
|
1.1
|
%
|
Asia Pacific
|
$
|
100.36
|
|
|
3.6
|
%
|
|
71.1
|
%
|
|
2.2
|
%
|
pts.
|
|
$
|
141.21
|
|
|
0.4
|
%
|
Caribbean & Latin America
|
$
|
99.13
|
|
|
0.5
|
%
|
|
62.6
|
%
|
|
(0.6
|
)%
|
pts.
|
|
$
|
158.27
|
|
|
1.5
|
%
|
Europe
|
$
|
143.33
|
|
|
3.6
|
%
|
|
77.3
|
%
|
|
0.9
|
%
|
pts.
|
|
$
|
185.38
|
|
|
2.4
|
%
|
Middle East & Africa
|
$
|
92.83
|
|
|
(0.7
|
)%
|
|
63.6
|
%
|
|
2.4
|
%
|
pts.
|
|
$
|
145.86
|
|
|
(4.4
|
)%
|
International - All (6)
|
$
|
112.26
|
|
|
2.8
|
%
|
|
71.0
|
%
|
|
1.5
|
%
|
pts.
|
|
$
|
158.21
|
|
|
0.6
|
%
|
Worldwide (7)
|
$
|
124.16
|
|
|
1.2
|
%
|
|
76.1
|
%
|
|
—
|
%
|
pts.
|
|
$
|
163.23
|
|
|
1.1
|
%
|
(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 North American Luxury and North American Upper Upscale.
|
(4)
|
Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy.
|
(5)
|
Includes North American Full-Service and North American Limited-Service.
|
(6)
|
Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.
|
(7)
|
Includes North American - All and International - All.
|
Comparable Company-Operated Properties
|
||||||||||||||||||||
|
Six Months Ended June 30, 2019 and Change vs. Six Months Ended June 30, 2018
|
|||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|||||||||
North American Luxury (1)
|
$
|
281.07
|
|
|
1.4
|
%
|
|
77.8
|
%
|
|
(1.3
|
)%
|
pts.
|
|
$
|
361.37
|
|
|
3.1
|
%
|
North American Upper Upscale (2)
|
$
|
154.15
|
|
|
0.6
|
%
|
|
76.6
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
201.31
|
|
|
1.0
|
%
|
North American Full-Service (3)
|
$
|
176.00
|
|
|
0.8
|
%
|
|
76.8
|
%
|
|
(0.5
|
)%
|
pts.
|
|
$
|
229.22
|
|
|
1.4
|
%
|
North American Limited-Service (4)
|
$
|
111.06
|
|
|
(1.1
|
)%
|
|
74.2
|
%
|
|
(1.5
|
)%
|
pts.
|
|
$
|
149.64
|
|
|
1.0
|
%
|
North American - All (5)
|
$
|
155.36
|
|
|
0.4
|
%
|
|
76.0
|
%
|
|
(0.8
|
)%
|
pts.
|
|
$
|
204.51
|
|
|
1.4
|
%
|
Greater China
|
$
|
84.60
|
|
|
2.7
|
%
|
|
67.2
|
%
|
|
1.8
|
%
|
pts.
|
|
$
|
125.85
|
|
|
(0.1
|
)%
|
Rest of Asia Pacific
|
$
|
122.86
|
|
|
4.9
|
%
|
|
74.6
|
%
|
|
2.9
|
%
|
pts.
|
|
$
|
164.74
|
|
|
0.7
|
%
|
Asia Pacific
|
$
|
100.80
|
|
|
3.8
|
%
|
|
70.3
|
%
|
|
2.3
|
%
|
pts.
|
|
$
|
143.31
|
|
|
0.4
|
%
|
Caribbean & Latin America
|
$
|
143.12
|
|
|
2.1
|
%
|
|
66.0
|
%
|
|
0.5
|
%
|
pts.
|
|
$
|
216.70
|
|
|
1.3
|
%
|
Europe
|
$
|
139.77
|
|
|
3.1
|
%
|
|
71.9
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
194.40
|
|
|
2.3
|
%
|
Middle East & Africa
|
$
|
107.05
|
|
|
(2.2
|
)%
|
|
67.3
|
%
|
|
2.3
|
%
|
pts.
|
|
$
|
159.15
|
|
|
(5.6
|
)%
|
International - All (6)
|
$
|
114.05
|
|
|
2.4
|
%
|
|
69.8
|
%
|
|
1.8
|
%
|
pts.
|
|
$
|
163.34
|
|
|
(0.2
|
)%
|
Worldwide (7)
|
$
|
134.71
|
|
|
1.2
|
%
|
|
72.9
|
%
|
|
0.5
|
%
|
pts.
|
|
$
|
184.79
|
|
|
0.6
|
%
|
Comparable Systemwide Properties
|
||||||||||||||||||||
|
Six Months Ended June 30, 2019 and Change vs. Six Months Ended June 30, 2018
|
|||||||||||||||||||
|
RevPAR
|
|
Occupancy
|
|
Average Daily Rate
|
|||||||||||||||
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|
2019
|
|
vs. 2018
|
|||||||||
North American Luxury (1)
|
$
|
263.48
|
|
|
1.4
|
%
|
|
77.5
|
%
|
|
(1.3
|
)%
|
pts.
|
|
$
|
340.16
|
|
|
3.0
|
%
|
North American Upper Upscale (2)
|
$
|
135.92
|
|
|
1.5
|
%
|
|
73.7
|
%
|
|
(0.3
|
)%
|
pts.
|
|
$
|
184.33
|
|
|
1.9
|
%
|
North American Full-Service (3)
|
$
|
148.33
|
|
|
1.5
|
%
|
|
74.1
|
%
|
|
(0.4
|
)%
|
pts.
|
|
$
|
200.18
|
|
|
2.0
|
%
|
North American Limited-Service (4)
|
$
|
99.81
|
|
|
(0.1
|
)%
|
|
73.6
|
%
|
|
(0.8
|
)%
|
pts.
|
|
$
|
135.57
|
|
|
1.0
|
%
|
North American - All (5)
|
$
|
120.42
|
|
|
0.8
|
%
|
|
73.8
|
%
|
|
(0.6
|
)%
|
pts.
|
|
$
|
163.12
|
|
|
1.6
|
%
|
Greater China
|
$
|
83.89
|
|
|
2.8
|
%
|
|
66.8
|
%
|
|
2.0
|
%
|
pts.
|
|
$
|
125.59
|
|
|
(0.3
|
)%
|
Rest of Asia Pacific
|
$
|
121.24
|
|
|
4.1
|
%
|
|
73.8
|
%
|
|
2.2
|
%
|
pts.
|
|
$
|
164.30
|
|
|
1.0
|
%
|
Asia Pacific
|
$
|
102.03
|
|
|
3.6
|
%
|
|
70.2
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
145.35
|
|
|
0.5
|
%
|
Caribbean & Latin America
|
$
|
111.16
|
|
|
2.2
|
%
|
|
64.0
|
%
|
|
(0.4
|
)%
|
pts.
|
|
$
|
173.73
|
|
|
2.8
|
%
|
Europe
|
$
|
122.27
|
|
|
3.1
|
%
|
|
70.6
|
%
|
|
0.6
|
%
|
pts.
|
|
$
|
173.24
|
|
|
2.2
|
%
|
Middle East & Africa
|
$
|
101.66
|
|
|
(1.9
|
)%
|
|
66.6
|
%
|
|
2.1
|
%
|
pts.
|
|
$
|
152.62
|
|
|
(5.0
|
)%
|
International - All (6)
|
$
|
109.17
|
|
|
2.5
|
%
|
|
69.1
|
%
|
|
1.3
|
%
|
pts.
|
|
$
|
158.02
|
|
|
0.5
|
%
|
Worldwide (7)
|
$
|
117.27
|
|
|
1.2
|
%
|
|
72.5
|
%
|
|
(0.1
|
)%
|
pts.
|
|
$
|
161.76
|
|
|
1.3
|
%
|
(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 North American Luxury and North American Upper Upscale.
|
(4)
|
Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy.
|
(5)
|
Includes North American Full-Service and North American Limited-Service.
|
(6)
|
Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.
|
(7)
|
Includes North American - All and International - All.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Base management fees
|
$
|
309
|
|
|
$
|
300
|
|
|
$
|
9
|
|
|
3
|
%
|
|
$
|
591
|
|
|
$
|
573
|
|
|
$
|
18
|
|
|
3
|
%
|
Franchise fees
|
525
|
|
|
475
|
|
|
50
|
|
|
11
|
%
|
|
975
|
|
|
892
|
|
|
83
|
|
|
9
|
%
|
||||||
Incentive management fees
|
165
|
|
|
176
|
|
|
(11
|
)
|
|
(6
|
)%
|
|
328
|
|
|
331
|
|
|
(3
|
)
|
|
(1
|
)%
|
||||||
Gross fee revenues
|
999
|
|
|
951
|
|
|
48
|
|
|
5
|
%
|
|
1,894
|
|
|
1,796
|
|
|
98
|
|
|
5
|
%
|
||||||
Contract investment amortization
|
(15
|
)
|
|
(13
|
)
|
|
2
|
|
|
15
|
%
|
|
(29
|
)
|
|
(31
|
)
|
|
(2
|
)
|
|
(6
|
)%
|
||||||
Net fee revenues
|
$
|
984
|
|
|
$
|
938
|
|
|
$
|
46
|
|
|
5
|
%
|
|
$
|
1,865
|
|
|
$
|
1,765
|
|
|
$
|
100
|
|
|
6
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Owned, leased, and other revenue
|
$
|
418
|
|
|
$
|
423
|
|
|
$
|
(5
|
)
|
|
(1
|
)%
|
|
$
|
793
|
|
|
$
|
829
|
|
|
$
|
(36
|
)
|
|
(4
|
)%
|
Owned, leased, and other - direct expenses
|
331
|
|
|
334
|
|
|
(3
|
)
|
|
(1
|
)%
|
|
656
|
|
|
670
|
|
|
(14
|
)
|
|
(2
|
)%
|
||||||
|
$
|
87
|
|
|
$
|
89
|
|
|
$
|
(2
|
)
|
|
(2
|
)%
|
|
$
|
137
|
|
|
$
|
159
|
|
|
$
|
(22
|
)
|
|
(14
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Cost reimbursement revenue
|
$
|
3,903
|
|
|
$
|
4,048
|
|
|
$
|
(145
|
)
|
|
(4
|
)%
|
|
$
|
7,659
|
|
|
$
|
7,824
|
|
|
$
|
(165
|
)
|
|
(2
|
)%
|
Reimbursed expenses
|
4,107
|
|
|
3,964
|
|
|
143
|
|
|
4
|
%
|
|
7,999
|
|
|
7,772
|
|
|
227
|
|
|
3
|
%
|
||||||
|
$
|
(204
|
)
|
|
$
|
84
|
|
|
$
|
(288
|
)
|
|
(343
|
)%
|
|
$
|
(340
|
)
|
|
$
|
52
|
|
|
$
|
(392
|
)
|
|
(754
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Depreciation, amortization, and other
|
$
|
56
|
|
|
$
|
58
|
|
|
$
|
(2
|
)
|
|
(3
|
)%
|
|
$
|
110
|
|
|
$
|
112
|
|
|
$
|
(2
|
)
|
|
(2
|
)%
|
General, administrative, and other
|
229
|
|
|
217
|
|
|
12
|
|
|
6
|
%
|
|
451
|
|
|
464
|
|
|
(13
|
)
|
|
(3
|
)%
|
||||||
Merger-related costs and charges
|
173
|
|
|
18
|
|
|
155
|
|
|
861
|
%
|
|
182
|
|
|
52
|
|
|
130
|
|
|
250
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Gains and other income, net
|
$
|
1
|
|
|
$
|
114
|
|
|
$
|
(113
|
)
|
|
(99
|
)%
|
|
$
|
6
|
|
|
$
|
173
|
|
|
$
|
(167
|
)
|
|
(97
|
)%
|
Interest expense
|
(102
|
)
|
|
(85
|
)
|
|
17
|
|
|
20
|
%
|
|
(199
|
)
|
|
(160
|
)
|
|
39
|
|
|
24
|
%
|
||||||
Interest income
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
%
|
|
12
|
|
|
11
|
|
|
1
|
|
|
9
|
%
|
||||||
Equity in earnings
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
(100
|
)%
|
|
8
|
|
|
34
|
|
|
(26
|
)
|
|
(76
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Provision for income taxes
|
$
|
(82
|
)
|
|
$
|
(207
|
)
|
|
$
|
(125
|
)
|
|
(60
|
)%
|
|
$
|
(139
|
)
|
|
$
|
(319
|
)
|
|
$
|
(180
|
)
|
|
(56
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Segment revenues
|
$
|
3,403
|
|
|
$
|
3,356
|
|
|
$
|
47
|
|
|
1
|
%
|
|
$
|
6,708
|
|
|
$
|
6,655
|
|
|
$
|
53
|
|
|
1
|
%
|
Segment profits
|
$
|
338
|
|
|
$
|
394
|
|
|
$
|
(56
|
)
|
|
(14
|
)%
|
|
$
|
627
|
|
|
$
|
671
|
|
|
$
|
(44
|
)
|
|
(7
|
)%
|
•
|
$25 million of lower cost reimbursement revenue, net of reimbursed expenses;
|
•
|
$21 million of lower gains and other income, net, primarily due to the $22 million gain on the sale of two properties in 2018;
|
•
|
$14 million of lower equity in earnings, primarily due to the $10 million gain on an equity method investee’s sale of a property in 2018;
|
•
|
$8 million of lower incentive management fees, primarily driven by lower profits at managed hotels; and
|
•
|
$12 million of higher base management and franchise fees, primarily due to unit and RevPAR growth.
|
•
|
$24 million of lower gains and other income, net, primarily due to the same reasons described in the preceding “Second Quarter” discussion;
|
•
|
$22 million of lower cost reimbursement revenue, net of reimbursed expenses;
|
•
|
$14 million of lower equity in earnings, primarily due to the change described in the preceding “Second Quarter” discussion;
|
•
|
$6 million of lower owned, leased, and other revenue, net of direct expenses, primarily reflecting $18 million of lower termination fees, partially offset by $13 million of profits attributable to the Sheraton Phoenix Downtown, which we purchased in June 2018; and
|
•
|
$23 million of higher base management and franchise fees, primarily reflecting $16 million from unit growth and $8 million from RevPAR growth.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Segment revenues
|
$
|
901
|
|
|
$
|
860
|
|
|
$
|
41
|
|
|
5
|
%
|
|
$
|
1,670
|
|
|
$
|
1,600
|
|
|
$
|
70
|
|
|
4
|
%
|
Segment profits
|
$
|
253
|
|
|
$
|
252
|
|
|
$
|
1
|
|
|
—
|
%
|
|
$
|
455
|
|
|
$
|
434
|
|
|
$
|
21
|
|
|
5
|
%
|
•
|
$19 million of higher base management and franchise fees, primarily reflecting $15 million from unit growth and $5 million from AC Hotels by Marriott properties previously presented in the “Equity in earnings” caption of our Income Statements;
|
•
|
$12 million of lower cost reimbursement revenue, net of reimbursed expenses; and
|
•
|
$5 million of lower incentive management fees, primarily driven by lower fees from a few portfolios of managed hotels.
|
•
|
$33 million of higher base management and franchise fees, primarily reflecting $28 million from unit growth and $8 million from AC Hotels by Marriott properties previously presented in the “Equity in earnings” caption of our Income Statements; and
|
•
|
$6 million of lower cost reimbursement revenue, net of reimbursed expenses.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
($ in millions)
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|
Change 2019 vs. 2018
|
||||||||||||||||||
Segment revenues
|
$
|
310
|
|
|
$
|
268
|
|
|
$
|
42
|
|
|
16
|
%
|
|
$
|
580
|
|
|
$
|
543
|
|
|
$
|
37
|
|
|
7
|
%
|
Segment profits
|
$
|
92
|
|
|
$
|
140
|
|
|
$
|
(48
|
)
|
|
(34
|
)%
|
|
$
|
195
|
|
|
$
|
252
|
|
|
$
|
(57
|
)
|
|
(23
|
)%
|
•
|
$54 million of lower gains and other income, net, primarily due to the $45 million gain on the sale of two properties in 2018 and the $9 million gain on the sale of our interest in an equity method investment in 2018;
|
•
|
$5 million of lower cost reimbursement revenue, net of reimbursed expenses; and
|
•
|
$7 million of higher owned, leased, and other revenue, net of direct expenses, primarily reflecting higher termination fees.
|
•
|
$53 million of lower gains and other income, net, primarily due to the same reasons described in the preceding “Second Quarter” discussion;
|
•
|
$9 million of lower cost reimbursement revenue, net of reimbursed expenses; and
|
•
|
$4 million of higher owned, leased, and other revenue, net of direct expenses, primarily reflecting higher termination fees.
|
(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, 2019 - April 30, 2019
|
|
1.2
|
|
|
$
|
133.60
|
|
|
1.2
|
|
|
27.8
|
|
May 1, 2019 - May 31, 2019
|
|
1.4
|
|
|
$
|
130.10
|
|
|
1.4
|
|
|
26.4
|
|
June 1, 2019 - June 30, 2019
|
|
1.1
|
|
|
$
|
134.05
|
|
|
1.1
|
|
|
25.3
|
|
(1)
|
On November 9, 2017 and February 15, 2019, we announced that our Board of Directors increased our common stock repurchase authorization by 30 million shares and 25 million shares, respectively. As of June 30, 2019, 25.3 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
|
|
Amendment dated May 10, 2019 to the Marriott International, Inc. Stock and Cash Incentive Plan.
|
|
|
|
|
|
|
|
10.2
|
|
U.S. $4,500,000 Fifth Amended and Restated Credit Agreement dated as of June 28, 2019 with Bank of America, N.A. as administrative agent and certain banks.
|
|
|
|
|
|
|
|
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 - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL 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.
|
|
|
|
|
|
104
|
|
The cover page from Marriott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in inline XBRL.
|
|
Submitted electronically with this report.
|
MARRIOTT INTERNATIONAL, INC.
|
6th day of August, 2019
|
|
/s/ Bao Giang Val Bauduin
|
Bao Giang Val Bauduin
|
Controller and Chief Accounting Officer
(Duly Authorized Officer) |
1.
|
Article 2.3 of the Plan is hereby amended to read as follows:
|
2.
|
Article 2.36 of the Plan is hereby amended to read as follows:
|
3.
|
Article 12.1 of the Plan is hereby amended to read as follows:
|
4.
|
Article 12.2 of the Plan is hereby amended to read as follows:
|
5.
|
Articles 12.3(a) and (b) of the Plan are hereby amended to read as follows:
|
6.
|
Article 18.2 of the Plan is hereby amended to read as follows:
|
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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(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
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(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.
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6th day of August, 2019
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/s/ Arne M. Sorenson
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Arne M. Sorenson
President and
Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Marriott International, Inc.;
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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;
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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;
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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
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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.
|
6th day of August, 2019
|
/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, 2019, (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
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(2)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
6th day of August, 2019
|
/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, 2019, (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
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(2)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
6th day of August, 2019
|
/s/ Kathleen K. Oberg
|
|
Kathleen K. Oberg
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|