Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 15, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MAR | |
Entity Registrant Name | MARRIOTT INTERNATIONAL INC /MD/ | |
Entity Central Index Key | 1,048,286 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 254,231,720 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | ||
Base management fees | $ 172 | $ 165 |
Franchise fees | 207 | 204 |
Incentive management fees | 101 | 89 |
Owned, leased, and other revenue | 247 | 257 |
Cost reimbursements | 3,045 | 2,798 |
Revenues | 3,772 | 3,513 |
OPERATING COSTS AND EXPENSES | ||
Owned, leased, and other - direct | 166 | 194 |
Reimbursed costs | 3,045 | 2,798 |
Depreciation, amortization, and other | 31 | 44 |
General, administrative, and other | 163 | 145 |
Costs and Expenses, Total | 3,405 | 3,181 |
OPERATING INCOME | 367 | 332 |
Gains and other income, net | 0 | 0 |
Interest expense | (47) | (36) |
Interest income | 6 | 8 |
Equity in earnings | 0 | 3 |
Income before income taxes | 326 | 307 |
Provision for income taxes | (107) | (100) |
NET INCOME | $ 219 | $ 207 |
EARNINGS PER SHARE | ||
Earnings per share - basic (in USD per share) | $ 0.86 | $ 0.75 |
Earnings per share - diluted (in USD per share) | 0.85 | 0.73 |
CASH DIVIDENDS DECLARED PER SHARE (in USD per share) | $ 0.25 | $ 0.20 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 219 | $ 207 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 22 | (26) |
Derivative instrument adjustments, net of tax | (5) | 9 |
Unrealized gain (loss) on available-for-sale securities, net of tax | 1 | (1) |
Reclassification of losses (gains), net of tax | 1 | (2) |
Total other comprehensive income (loss), net of tax | 19 | (20) |
Comprehensive income | $ 238 | $ 187 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and equivalents | $ 99 | $ 96 |
Accounts and notes receivable, net | 1,143 | 1,103 |
Prepaid expenses | 79 | 77 |
Other | 25 | 30 |
Assets held for sale | 78 | 78 |
Assets, current, total | 1,424 | 1,384 |
Property and equipment, net | 1,042 | 1,029 |
Intangible assets | ||
Contract acquisition costs and other | 1,468 | 1,451 |
Goodwill | 946 | 943 |
Goodwill and intangible assets, net, total | 2,414 | 2,394 |
Equity and cost method investments | 169 | 165 |
Notes receivable, net | 218 | 215 |
Deferred taxes, net | 620 | 672 |
Other noncurrent assets | 234 | 223 |
Total assets | 6,121 | 6,082 |
Current liabilities | ||
Current portion of long-term debt | 300 | 300 |
Accounts payable | 597 | 593 |
Accrued payroll and benefits | 779 | 861 |
Liability for guest loyalty programs | 1,013 | 952 |
Accrued expenses and other | 558 | 527 |
Liabilities, current, total | 3,247 | 3,233 |
Long-term debt | 3,859 | 3,807 |
Liability for guest loyalty programs | 1,641 | 1,622 |
Other noncurrent liabilities | 1,041 | 1,010 |
Shareholders’ deficit | ||
Class A Common Stock | 5 | 5 |
Additional paid-in-capital | 2,751 | 2,821 |
Retained earnings | 5,025 | 4,878 |
Treasury stock, at cost | (11,271) | (11,098) |
Accumulated other comprehensive loss | (177) | (196) |
Stockholders' deficit attributable to parent | (3,667) | (3,590) |
Liabilities and deficit, total | $ 6,121 | $ 6,082 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 219 | $ 207 |
Adjustments to reconcile to cash provided by operating activities: | ||
Depreciation, amortization, and other | 31 | 44 |
Share-based compensation | 28 | 24 |
Income taxes | 58 | 29 |
Liability for guest loyalty programs | 76 | 45 |
Working capital changes | (106) | (131) |
Other | 27 | 44 |
Net cash provided by operating activities | 333 | 262 |
INVESTING ACTIVITIES | ||
Capital expenditures | (42) | (75) |
Dispositions | 4 | 247 |
Loan advances | (16) | (10) |
Loan collections | 2 | 7 |
Contract acquisition costs | (21) | (61) |
Escrow deposit for acquisition of a business | 0 | 136 |
Other | 9 | 6 |
Net cash used in investing activities | (64) | (22) |
FINANCING ACTIVITIES | ||
Commercial paper/Credit Facility, net | 51 | 246 |
Repayment of long-term debt | (2) | (2) |
Issuance of Class A Common Stock | 6 | 17 |
Dividends paid | (64) | (56) |
Purchase of treasury stock | (248) | (429) |
Other | (9) | 0 |
Net cash used in financing activities | (266) | (224) |
INCREASE IN CASH AND EQUIVALENTS | 3 | 16 |
CASH AND EQUIVALENTS, beginning of period | 96 | 104 |
CASH AND EQUIVALENTS, end of period | $ 99 | $ 120 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The condensed consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc. (“Marriott,” and together with its consolidated subsidiaries, “we,” “us,” or “the Company”). In order to make this report easier to read, we also refer throughout to (i) our Condensed Consolidated Financial Statements as our “Financial Statements,” (ii) our Condensed Consolidated Statements of Income as our “Income Statements,” (iii) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (iv) our properties, brands, or markets in the United States (“U.S.”) and Canada as “North America” or “North American,” and (v) our properties, brands, or markets outside of the U.S. and Canada as “International.” References throughout to numbered “Footnotes” refer to the numbered Notes in these Notes to Condensed Consolidated Financial Statements, unless otherwise noted. These Financial Statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements in this report should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“ 2015 Form 10-K”). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2015 Form 10-K. Preparation of financial statements that conform with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. Accordingly, ultimate results could differ from those estimates. The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of March 31, 2016 and December 31, 2015 , the results of our operations for the three months ended March 31, 2016 and March 31, 2015 , and cash flows for the three months ended March 31, 2016 and March 31, 2015 . Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations. We have eliminated all material intercompany transactions and balances between entities consolidated in these Financial Statements. New Accounting Standards Accounting Standards Update No. 2014-09 - “Revenue from Contracts with Customers” (“ASU No. 2014-09”) ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance, and significantly enhances comparability of revenue recognition practices across entities and industries by providing a principles-based, comprehensive framework for addressing revenue recognition issues. In order for a provider of promised goods or services to recognize as revenue the consideration that it expects to receive in exchange for the promised goods or services, the provider should apply the following five steps: (1) identify the contract with a customer(s); (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer and provides enhanced disclosure requirements. The Financial Accounting Standards Board (“FASB”) has deferred ASU No. 2014-09 for one year, and with that deferral, the standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which for us will be our 2018 first quarter. We are permitted to use either the retrospective or the modified retrospective method when adopting ASU No. 2014-09. We are still assessing the potential impact that ASU No. 2014-09 will have on our financial statements and disclosures, but we believe that there could be changes to the revenue recognition of real estate sales, franchise fees, and incentive management fees. Accounting Standards Update No. 2016-02 - “Leases” (“ASU No. 2016-02”) In February 2016, the FASB issued ASU No. 2016-02, which introduces a lessee model that brings substantially all leases onto the balance sheet. Under the new standard, a lessee will recognize on its balance sheet a lease liability and a right-of-use asset for all leases, including operating leases, with a term greater than 12 months. The new standard will also distinguish leases as either finance leases or operating leases. This distinction will affect how leases are measured and presented in the income statement and statement of cash flows. ASU No. 2016-02 is effective for annual and interim periods in fiscal years beginning after December 15, 2018. We are still assessing the potential impact that ASU No. 2016-02 will have on our financial statements and disclosures. Accounting Standards Update No. 2016-09 - “Stock Compensation” (“ASU No. 2016-09”) In March 2016, the FASB issued ASU No. 2016-09, which involves several aspects of the accounting for share-based payments, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance will require all income tax effects of awards to be recorded as income tax expense (or benefit) in the income statement. Currently, excess tax benefits are recorded in additional paid-in-capital in the balance sheet. In the statement of cash flows, the new guidance requires excess tax benefits to be presented as an operating activity rather than as a financing activity. ASU No. 2016-09 is effective for annual and interim periods beginning after December 15, 2016. We are still assessing the potential impact that ASU No. 2016-09 will have on our financial statements and disclosures. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2016 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Planned Acquisition On November 15, 2015, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to combine with Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”). The Merger Agreement provides for the Company to combine with Starwood in a series of transactions after which Starwood will be an indirect wholly owned subsidiary of the Company (the “Starwood Combination”). On March 20, 2016, we entered into Amendment Number 1 (the “Amendment”) to the Merger Agreement. The Amendment modified the merger consideration payable to shareholders of Starwood. If the combination transactions are completed, shareholders of Starwood will receive 0.80 shares of our Class A Common Stock, par value $0.01 per share, and $21.00 in cash, without interest, for each share of Starwood common stock, par value $0.01 per share, that they own immediately before these transactions. On April 8, 2016, shareholders of both Marriott and Starwood approved the combination transactions, and in the 2016 first quarter, we cleared the antitrust and competition reviews in a number of jurisdictions, including the United States and Canada. We expect that the combination will close in mid-2016, after remaining customary conditions are satisfied, including receipt of additional antitrust approvals and the completion of Starwood’s previously announced spin-off of its vacation ownership business, or another spin-off, split-off, analogous disposition, or sale of its vacation ownership business. Planned Dispositions At the end of the 2016 first quarter , we held $78 million of assets classified as “Assets held for sale” and $3 million of liabilities associated with those assets, which we recorded under “Accrued expenses and other” on our Balance Sheet. In the 2016 second quarter, we sold one of these assets, a North American Limited-Service segment plot of land ( $47 million in assets and $1 million in liabilities). We expect to sell the remaining Miami Beach EDITION residences ( $31 million in assets and $2 million in liabilities) in 2016. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The table below presents the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share: Three Months Ended (in millions, except per share amounts) March 31, 2016 March 31, 2015 Computation of Basic Earnings Per Share Net income $ 219 $ 207 Weighted average shares outstanding 254.4 277.7 Basic earnings per share $ 0.86 $ 0.75 Computation of Diluted Earnings Per Share Net income $ 219 $ 207 Weighted average shares outstanding 254.4 277.7 Effect of dilutive securities Employee stock option and appreciation right plans 1.9 2.4 Deferred stock incentive plans 0.6 0.7 Restricted stock units 2.0 2.7 Shares for diluted earnings per share 258.9 283.5 Diluted earnings per share $ 0.85 $ 0.73 We compute the effect of dilutive securities using the treasury stock method and average market prices during the period. We excluded antidilutive stock options and stock appreciation rights of 0.5 million for the 2016 first quarter and 0.2 million for the 2015 first quarter from our calculation of diluted earnings per share because their exercise prices were greater than the average market prices. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Under our Stock and Cash Incentive Plan (the “Stock Plan”), we award: (1) stock options (our “Stock Option Program”) to purchase our Class A Common Stock (“common stock”); (2) stock appreciation rights (“SARs”) for our common stock (our “SAR Program”); (3) restricted stock units (“RSUs”) of our common stock; and (4) deferred stock units. We also issue performance-based RSUs (“PSUs”) to named executive officers and some of their direct reports under the Stock Plan. We grant awards at exercise prices or strike prices that equal the market price of our common stock on the date of grant. We recorded share-based compensation expense for award grants of $28 million for the 2016 first quarter and $24 million for the 2015 first quarter. Deferred compensation costs for unvested awards totaled $234 million at March 31, 2016 and $116 million at December 31, 2015 . RSUs and PSUs We granted 1.6 million RSUs during the 2016 first quarter to certain officers and key employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date. W e granted 0.2 million PSUs during the 2016 first quarter to certain executive officers, subject to continued employment and the satisfaction of certain performance conditions based on achievement of pre-established targets for Adjusted EBITDA, RevPAR Index, room openings, and/or net administrative expense over, or at the end of, a three -year vesting period. We also granted 0.4 million PSUs during the 2016 first quarter to certain senior leaders and members of the Company’s Starwood integration team that, subject to the closing of the Starwood Combination and continued employment, vest based upon achievement of pre-established targets related to the Starwood Combination over, or at the end of, a three -year performance period. RSUs, including PSUs, granted in the 2016 first quarter had a weighted average grant-date fair value of $62 . SARs We granted 0.4 million SARs to officers, key employees, and non-employee directors during the 2016 first quarter . These SARs generally expire ten years after the grant date and both vest and may be exercised in cumulative installments of one quarter at the end of each of the first four years following the grant date. The weighted average grant-date fair value of SARs granted in the 2016 first quarter was $22 and the weighted average exercise price was $67 . We used the following assumptions as part of a binomial lattice-based valuation to determine the fair value of the SARs we granted during the 2016 first quarter : Expected volatility 30.4 % Dividend yield 1.3 % Risk-free rate 1.7 % Expected term (in years) 8 - 9 In making these assumptions, we base expected volatility on the historical movement of the Company’s stock price. We base risk-free rates on the corresponding U.S. Treasury spot rates for the expected duration at the date of grant, which we convert to a continuously compounded rate. The dividend yield assumption takes into consideration both historical levels and expectations of future dividend payout. The weighted average expected terms for SARs are an output of our valuation model which utilizes historical data in estimating the period of time that the SARs are expected to remain unexercised. We calculate the expected terms for SARs for separate groups of retirement eligible and non-retirement eligible employees. Our valuation model also uses historical data to estimate exercise behaviors, which include determining the likelihood that employees will exercise their SARs before expiration at a certain multiple of stock price to exercise price. Other Information As of the end of the 2016 first quarter, we had 23 million remaining shares authorized under the Stock Plan, including 6 million shares under the Stock Option Program and the SAR Program. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective tax rate increased from 32.4% to 32.8% for the three months ended March 31, 2016 , primarily due to additional deferred tax expense resulting from a tax rate change in a foreign jurisdiction, partially offset by the beneficial tax impact of the strengthening U.S. Dollar in relation to foreign currencies. For the 2016 first quarter , our unrecognized tax benefits balance of $25 million increased by $1 million from year-end 2015 for tax positions taken during the current period. The unrecognized tax benefits balance included $16 million of tax positions that, if recognized, would impact our effective tax rate. We file income tax returns, including returns for our subsidiaries, in various jurisdictions around the world. The U.S. Internal Revenue Service (“IRS”) has examined our federal income tax returns, and we have settled all issues for tax years through 2013. We participate in the IRS Compliance Assurance Program, which accelerates IRS examination of key transactions with the goal of resolving any issues before the taxpayer files its return. As a result, our 2014 tax year audit is substantially complete, pending the resolution of one issue. Our 2015 and 2016 tax year audits are currently ongoing. Various foreign, state, and local income tax returns are also under examination by the applicable taxing authorities. We paid cash for income taxes, net of refunds, of $43 million in the 2016 first quarter and $58 million in the 2015 first quarter . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees We issue guarantees to certain lenders and hotel owners, chiefly to obtain long-term management contracts. The guarantees generally have a stated maximum funding amount and a term of four to ten years. The terms of guarantees to lenders generally require us to fund if cash flows from hotel operations are inadequate to cover annual debt service or to repay the loan at maturity. The terms of the guarantees to hotel owners generally require us to fund if the hotels do not attain specified levels of operating profit. Guarantee fundings to lenders and hotel owners are generally recoverable as loans repayable to us out of future hotel cash flows and/or proceeds from the sale of hotels. We also enter into project completion guarantees with certain lenders in conjunction with hotels that we or our joint venture partners are building. We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for guarantees for which we are the primary obligor at March 31, 2016 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 113 $ 21 Operating profit 100 38 Other 9 1 Total guarantees where we are the primary obligor $ 222 $ 60 Our liability at March 31, 2016 , for guarantees for which we are the primary obligor is reflected in our Balance Sheets as $60 million of “Other noncurrent liabilities.” Our guarantees listed in the preceding table include $11 million of debt service guarantees, $44 million of operating profit guarantees, and $1 million of other guarantees that will not be in effect until the underlying properties open and we begin to operate the properties or certain other events occur. The table above does not include a “contingent purchase obligation,” which is not currently in effect, that we entered into in the 2014 first quarter to provide credit support to lenders for a construction loan. We entered into that agreement in conjunction with signing a management agreement for The Times Square EDITION hotel in New York City (currently projected to open in 2017), and the hotel’s ownership group obtaining acquisition financing and entering into agreements concerning future construction financing for the mixed use project (which includes both the hotel and adjacent retail space). Under the agreement, we granted the lenders the right, upon an uncured event of default by the hotel owner under, and an acceleration of, the mortgage loan, to require us to purchase the hotel component of the property for $315 million during the first two years after opening (the “put option”). Because we would acquire the building upon exercise of the put option, we have not included the amount in the table above. The lenders may extend this period for up to three years to complete foreclosure if the loan has been accelerated and certain other conditions are met. We do not currently expect that the lenders will require us to purchase the hotel component. We have no ownership interest in this hotel. The preceding table also does not include the following guarantees: • $57 million of guarantees for Senior Living Services, consisting of lease obligations of $41 million (expiring in 2019 ) and lifecare bonds of $16 million (estimated to expire in 2019 ), for which we are secondarily liable. Sunrise Senior Living, Inc. (“Sunrise”) is the primary obligor on both the leases and $3 million of the lifecare bonds; HCP, Inc., as successor by merger to CNL Retirement Properties, Inc. (“CNL”), is the primary obligor on the remaining $13 million of the lifecare bonds. Before we sold the Senior Living Services business in 2003 , these were our guarantees of obligations of our then consolidated Senior Living Services subsidiaries. Sunrise and CNL have indemnified us for any fundings we may be called upon to make under these guarantees. Our liability for these guarantees had a carrying value of $3 million at March 31, 2016 . In conjunction with our consent of the 2011 extension of certain lease obligations until 2018 , Sunrise provided us with $1 million of cash collateral and an $85 million letter of credit issued by Key Bank to secure our continued exposure under the lease guarantees during the extension term and certain other obligations of Sunrise. The letter of credit balance was $49 million at the end of the 2016 first quarter, which decreased as a result of lease payments made and lifecare bonds redeemed. During the extension term, Sunrise agreed to make an annual payment to us from the cash flow of the continuing lease facilities, subject to a $1 million annual minimum. In the 2013 first quarter, Sunrise merged with Health Care REIT, Inc. (“HCN”), and Sunrise’s management business was acquired by an entity formed by affiliates of Kohlberg Kravis Roberts & Co. LP, Beecken Petty O’Keefe & Co., Coastwood Senior Housing Partners LLC, and HCN. In April of 2014, HCN and Revera Inc., a private provider of senior living services, acquired Sunrise’s management business. • Lease obligations, for which we became secondarily liable when we acquired the Renaissance Hotel Group N.V. in 1997 , consisting of annual rent payments of approximately $4 million and total remaining rent payments through the initial term of approximately $18 million . The majority of these obligations expire by the end of 2020 . CTF Holdings Ltd. (“CTF”) had originally provided €35 million in cash collateral in the event that we are required to fund under such guarantees, approximately $2 million ( €2 million ) of which remained at March 31, 2016 . Our exposure for the remaining rent payments through the initial term will decline to the extent that CTF obtains releases from the landlords or these hotels exit our system. Since the time we assumed these guarantees, we have not funded any amounts, and we do not expect to fund any amounts under these guarantees in the future. • A guarantee relating to the timeshare business, which was outstanding at the time of the 2011 Timeshare spin-off and for which we became secondarily liable as part of the spin-off. The guarantee relates to a Marriott Vacations Worldwide Corporation (“MVW”) payment obligation, for which we had an exposure of $5 million ( 7 million Singapore Dollars) at March 31, 2016 . MVW has indemnified us for this obligation, which we expect will expire in 2022 . We have not funded any amounts under this obligation, and do not expect to do so in the future. Our liability for this obligation had a carrying value of $1 million at March 31, 2016 . • A guarantee for a lease, originally entered into in 2000, for which we became secondarily liable in 2012 as a result of our sale of the ExecuStay corporate housing business to Oakwood Worldwide (“Oakwood”). Oakwood has indemnified us for the obligations under this guarantee. Our total exposure at the end of the 2016 first quarter for this guarantee was $6 million in future rent payments through the end of the lease in 2019. In addition to the guarantees described in the preceding paragraphs, in conjunction with financing obtained for specific projects or properties owned by joint ventures in which we are a party, we may provide industry standard indemnifications to the lender for loss, liability, or damage occurring as a result of the actions of the other joint venture owner or our own actions. Commitments In addition to the guarantees we note in the preceding paragraphs, as of March 31, 2016 , we had the following commitments outstanding, which are not recorded on our Balance Sheets: • A commitment to invest up to $22 million of equity for non-controlling interests in a partnership that plans to purchase or develop limited-service properties in Asia. We expect to fund $3 million of this commitment in 2016. We do not expect to fund the remaining $19 million of this commitment prior to the end of the commitment period in 2016. • We have a right and under certain circumstances an obligation to acquire our joint venture partner’s remaining interests in two joint ventures over the next five years at a price based on the performance of the ventures. In conjunction with this contingent obligation, we advanced $20 million ( €15 million ) in deposits, $13 million ( €11 million ) of which are remaining. The amounts on deposit are refundable to the extent we do not acquire our joint venture partner’s remaining interests. • A commitment to invest up to $10 million of equity into a joint venture in which we have a non-controlling interest in order to fund renovations of guest rooms. We expect to fully fund this commitment, which expires in 2016. • A loan commitment of $36 million related to the construction of a North American Full-Service property. We expect to fund this commitment in 2017. • Various commitments to purchase information technology hardware, software, accounting, finance, and maintenance services in the normal course of business totaling $131 million . We expect to purchase goods and services subject to these commitments as follows: $70 million in 2016 , $49 million in 2017 , $9 million in 2018 , and $3 million thereafter. • Several commitments aggregating $49 million which we do not expect to fund. Letters of Credit At March 31, 2016 , we had $77 million of letters of credit outstanding (all outside the Credit Facility, as defined in Footnote No. 7 , “ Long-Term Debt ”), the majority of which were for our self-insurance programs. Surety bonds issued as of March 31, 2016 , totaled $161 million , the majority of which state governments requested in connection with our self-insurance programs. Legal Proceedings On January 19, 2010, several former Marriott employees (the “plaintiffs”) filed a putative class action complaint against us and the Stock Plan (the “defendants”), alleging that certain equity awards of deferred bonus stock granted to the plaintiffs and other current and former employees for fiscal years 1963 through 1989 are subject to vesting requirements under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that are in certain circumstances more rapid than those set forth in the awards. The action was brought in the United States District Court for the District of Maryland (Greenbelt Division), and Dennis Walter Bond Sr. and Michael P. Steigman were the remaining named plaintiffs. Class certification was denied, and on January 16, 2015, the court granted Marriott’s motion for summary judgment and dismissed the case. Plaintiffs appealed to the U.S. Court of Appeals for the Fourth Circuit, and we cross-appealed on statute of limitation grounds. Oral arguments were held before the Fourth Circuit on October 28, 2015, and on January 29, 2016, the Fourth Circuit unanimously granted Marriott’s motion for summary judgment on the grounds that the action was untimely and affirmed the judgment in Marriott’s favor. The court subsequently denied the plaintiffs’ motion for rehearing en banc , and issued a formal mandate giving effect to its judgment on March 8, 2016. In March 2012, the Korea Fair Trade Commission (“KFTC”) obtained documents from two of our managed hotels in Seoul, Korea in connection with an investigation which we believe is focused on pricing of hotel services within the Seoul region. Since then, the KFTC has conducted additional fact-gathering at those two hotels and also has collected information from another Marriott managed hotel located in Seoul. We understand that the KFTC also has sought documents from numerous other hotels in Seoul and other parts of Korea that we do not operate, own, or franchise. We have not received a complaint or other legal process. We are cooperating with this investigation, which continues to be ongoing. Between November 18, 2015 and December 18, 2015, seven lawsuits challenging the Starwood Combination were filed in the Circuit Court for Baltimore City, Maryland on behalf of purported shareholders of Starwood, naming various combinations of Starwood’s directors, Starwood, Marriott, and others, as defendants. On February 11, 2016 the Court issued an order dismissing, without prejudice, all claims and all counts against Marriott, and on April 4, 2016, the Court issued an order dismissing all claims and counts against Starwood. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT We provide detail on our long-term debt balances in the following table as of the end of the 2016 first quarter and year-end 2015 : At Period End ($ in millions) March 31, December 31, Senior Notes: Series H Notes, interest rate of 6.2%, face amount of $289, maturing June 15, 2016 289 289 Series I Notes, interest rate of 6.4%, face amount of $293, maturing June 15, 2017 293 293 Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 (effective interest rate of 4.4%) 596 595 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 (effective interest rate of 3.4%) 348 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%) 347 347 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 (effective interest rate of 3.4%) 395 395 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 (effective interest rate of 3.1%) 446 446 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 (effective interest rate of 4.0%) 343 343 Commercial paper, average interest rate of 0.8% at March 31, 2016 991 938 $2,000 Credit Facility — — Other 111 113 4,159 4,107 Less: Current portion of long-term debt (300 ) (300 ) $ 3,859 $ 3,807 All of our long-term debt is recourse to us but unsecured. We paid cash for interest, net of amounts capitalized, of $23 million in the 2016 first quarter and $12 million in the 2015 first quarter . We are party to a multicurrency revolving credit agreement (the “Credit Facility”) that provides for $2,000 million of aggregate effective borrowings to support general corporate needs, including working capital, capital expenditures, share repurchases, letters of credit, and acquisitions. The availability of the Credit Facility also supports our commercial paper program. In addition, we may use borrowings under the Credit Facility, or commercial paper supported by the Credit Facility, to finance all or part of the cash component of the consideration to Starwood shareholders in connection with the Starwood Combination and certain fees and expenses incurred in connection with the combination. Borrowings under the Credit Facility generally bear interest at LIBOR (the London Interbank Offered Rate) plus a spread, based on our public debt rating. We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating. While any outstanding commercial paper borrowings and/or borrowings under our Credit Facility generally have short-term maturities, we classify the outstanding borrowings as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis. The Credit Facility expires on July 18, 2018 . Marriott is in the process of amending and restating the Credit Facility to increase the aggregate amount of available borrowings to up to $ 3,750 million and extend its expiration to 2021. We expect to complete the amendment and restatement during the 2016 second quarter. See the “Cash Requirements and Our Credit Facilities” caption later in this report in the “Liquidity and Capital Resources” section for information on our available borrowing capacity at March 31, 2016 . On March 20, 2016, when we entered into the Amendment to the Merger Agreement, we also obtained a commitment letter for a $3,500 million 364-day senior bridge term loan facility (the “Bridge Facility Commitment”). We are pursuing alternative financing to the Bridge Facility Commitment, such as the amendment and restatement of our current Credit Facility discussed above, and expect to finance the cash required to complete the Starwood Combination transaction using a combination of variable and fixed rate debt instruments with varying maturities, although we cannot assure that such financing will be available at all, or on acceptable terms. The following table presents future principal payments that are due for our debt as of the end of the 2016 first quarter: Debt Principal Payments (net of unamortized discounts) ($ in millions) Amount 2016 $ 298 2017 302 2018 1,000 2019 606 2020 358 Thereafter 1,595 Balance at March 31, 2016 $ 4,159 |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Notes Receivable | NOTES RECEIVABLE The following table presents the composition of our notes receivable balances (net of reserves and unamortized discounts) at the end of the 2016 first quarter and year-end 2015 : At Period End ($ in millions) March 31, December 31, Senior, mezzanine, and other loans $ 225 $ 221 Less current portion (7 ) (6 ) $ 218 $ 215 We do not have any past due notes receivable amounts at the end of the 2016 first quarter. The unamortized discounts for our notes receivable were $30 million at the end of the 2016 first quarter and $31 million at year-end 2015 . The following table presents the expected future principal payments (net of reserves and unamortized discounts) as well as interest rates for our notes receivable as of the end of the 2016 first quarter: Notes Receivable Principal Payments (net of reserves and unamortized discounts) and Interest Rates ($ in millions) Amount 2016 $ 5 2017 3 2018 61 2019 5 2020 2 Thereafter 149 Balance at March 31, 2016 $ 225 Weighted average interest rate at March 31, 2016 7.8% Range of stated interest rates at March 31, 2016 0 - 15% At the end of the 2016 first quarter, our recorded investment in impaired “Senior, mezzanine, and other loans” of $72 million was unchanged from year-end 2015 . At both the end of the 2016 first quarter and at year-end 2015 , we had a $55 million allowance for credit losses, leaving $17 million of exposure to our investment in impaired loans. Our average investment in impaired notes receivable totaled $72 million for the 2016 first quarter and $65 million for the 2015 first quarter . |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments, determined under current guidance for disclosures on the fair value of financial instruments, in the following table: March 31, 2016 December 31, 2015 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 218 $ 211 $ 215 $ 209 Marketable securities 40 40 37 37 Total noncurrent financial assets $ 258 $ 251 $ 252 $ 246 Senior notes $ (2,768 ) $ (2,875 ) $ (2,766 ) $ (2,826 ) Commercial paper (991 ) (991 ) (938 ) (938 ) Other long-term debt (97 ) (105 ) (99 ) (108 ) Other noncurrent liabilities (65 ) (65 ) (63 ) (63 ) Total noncurrent financial liabilities $ (3,921 ) $ (4,036 ) $ (3,866 ) $ (3,935 ) We estimate the fair value of our senior, mezzanine, and other loans, including the current portion, by discounting cash flows using risk-adjusted rates, both of which are Level 3 inputs. We carry our marketable securities at fair value. Our marketable securities include debt securities of the U.S. Government, its sponsored agencies and other U.S. corporations invested for our self-insurance programs, as well as shares of publicly traded companies, which we value using directly observable Level 1 inputs. The carrying value of these marketable securities was $40 million at the end of the 2016 first quarter. We estimate the fair value of our other long-term debt, including the current portion and excluding leases, using expected future payments discounted at risk-adjusted rates, which are Level 3 inputs. We determine the fair value of our senior notes using quoted market prices, which are directly observable Level 1 inputs. As noted in Footnote No. 7 , “ Long-Term Debt ,” even though our commercial paper borrowings generally have short-term maturities of 30 days or less, we classify outstanding commercial paper borrowings as long-term based on our ability and intent to refinance them on a long-term basis. As we are a frequent issuer of commercial paper, we use pricing from recent transactions as Level 2 inputs in estimating fair value. At the end of the 2016 first quarter and year-end 2015 , we determined that the carrying value of our commercial paper approximated its fair value due to the short maturity. Our other long-term liabilities largely consist of guarantees. We measure our liability for guarantees at fair value on a nonrecurring basis, that is when we issue or modify a guarantee, using Level 3 internally developed inputs. At the end of the 2016 first quarter and year-end 2015 , we determined that the carrying values of our guarantee liabilities approximated their fair values based on Level 3 inputs. See the “Fair Value Measurements” caption of Footnote No. 2, “Summary of Significant Accounting Policies” of our 2015 Form 10-K for more information on the input levels we use in determining fair value. |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income and Shareholders' (Deficit) Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Other Comprehensive (Loss) Income and Shareholders' (Deficit) Equity | OTHER COMPREHENSIVE INCOME (LOSS) AND SHAREHOLDERS' (DEFICIT) EQUITY The following tables detail the accumulated other comprehensive income (loss) activity for the 2016 first quarter and 2015 first quarter : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ (196 ) Other comprehensive income (loss) before reclassifications (1) 22 (5 ) 1 18 Reclassification of losses from accumulated other comprehensive loss — 1 — 1 Net other comprehensive income (loss) 22 (4 ) 1 19 Balance at March 31, 2016 $ (170 ) $ (12 ) $ 5 $ (177 ) ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2014 $ (72 ) $ (9 ) $ 11 $ (70 ) Other comprehensive (loss) income before reclassifications (1) (26 ) 9 (1 ) (18 ) Reclassification of losses (gains) from accumulated other comprehensive loss 3 (5 ) — (2 ) Net other comprehensive (loss) income (23 ) 4 (1 ) (20 ) Balance at March 31, 2015 $ (95 ) $ (5 ) $ 10 $ (90 ) (1) Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature. These resulted in a loss of $20 million for the 2016 first quarter and a gain of $52 million for the 2015 first quarter . The following table details the changes in common shares outstanding and shareholders’ deficit for the 2016 first 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 256.3 Balance at year-end 2015 $ (3,590 ) $ 5 $ 2,821 $ 4,878 $ (11,098 ) $ (196 ) — Net income 219 — — 219 — — — Other comprehensive income 19 — — — — 19 — Cash dividends ($0.25 per share) (64 ) — — (64 ) — — 1.6 Employee stock plan (26 ) — (70 ) (8 ) 52 — (3.7 ) Purchase of treasury stock (225 ) — — — (225 ) — 254.2 Balance at March 31, 2016 $ (3,667 ) $ 5 $ 2,751 $ 5,025 $ (11,271 ) $ (177 ) |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS We are a diversified global lodging company with operations in the following three reportable business segments: • North American Full-Service , which includes The Ritz-Carlton, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Delta Hotels and Resorts, and Gaylord Hotels located in the United States and Canada; • North American Limited-Service , which includes AC Hotels by Marriott, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn & Suites, TownePlace Suites, and Moxy Hotels properties located in the United States and Canada; and • International , which includes The Ritz-Carlton, Bulgari Hotels & Resorts, EDITION, JW Marriott, Autograph Collection Hotels, Renaissance Hotels, Marriott Hotels, Marriott Executive Apartments, AC Hotels by Marriott, Courtyard, Residence Inn, Fairfield Inn & Suites, Protea Hotels, and Moxy Hotels located outside the United States and Canada. Our North American Full-Service and North American Limited-Service segments meet the applicable accounting criteria to be reportable business segments. The following four operating segments do not meet the criteria for separate disclosure as reportable business segments: Asia Pacific, Caribbean and Latin America, Europe, and Middle East and Africa, and accordingly, we combined these four operating segments into an “all other category” which we refer to as “International.” We evaluate the performance of our operating segments using “segment profits” which is based largely on the results of the segment without allocating corporate expenses, income taxes, or indirect general, administrative, and other expenses. We allocate gains and losses, equity in earnings or losses from our joint ventures, and direct general, administrative, and other expenses to each of our segments. The caption “Other unallocated corporate” in the subsequent discussion represents a portion of our revenues, general, administrative, and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments. It also includes license fees we receive from our credit card programs and license fees from MVW. Our chief operating decision maker monitors assets for the consolidated company but does not use assets by operating segment when assessing performance or making operating segment resource allocations. Segment Revenues Three Months Ended ($ in millions) March 31, 2016 March 31, 2015 North American Full-Service Segment $ 2,321 $ 2,175 North American Limited-Service Segment 833 738 International 556 542 Total segment revenues 3,710 3,455 Other unallocated corporate 62 58 Total consolidated revenues $ 3,772 $ 3,513 Segment Profits Three Months Ended ($ in millions) March 31, 2016 March 31, 2015 North American Full-Service Segment $ 185 $ 146 North American Limited-Service Segment 155 151 International 75 77 Total segment profits 415 374 Other unallocated corporate (48 ) (39 ) Interest expense, net of interest income (41 ) (28 ) Income taxes (107 ) (100 ) Net Income $ 219 $ 207 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Standards | New Accounting Standards Accounting Standards Update No. 2014-09 - “Revenue from Contracts with Customers” (“ASU No. 2014-09”) ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance, and significantly enhances comparability of revenue recognition practices across entities and industries by providing a principles-based, comprehensive framework for addressing revenue recognition issues. In order for a provider of promised goods or services to recognize as revenue the consideration that it expects to receive in exchange for the promised goods or services, the provider should apply the following five steps: (1) identify the contract with a customer(s); (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer and provides enhanced disclosure requirements. The Financial Accounting Standards Board (“FASB”) has deferred ASU No. 2014-09 for one year, and with that deferral, the standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which for us will be our 2018 first quarter. We are permitted to use either the retrospective or the modified retrospective method when adopting ASU No. 2014-09. We are still assessing the potential impact that ASU No. 2014-09 will have on our financial statements and disclosures, but we believe that there could be changes to the revenue recognition of real estate sales, franchise fees, and incentive management fees. Accounting Standards Update No. 2016-02 - “Leases” (“ASU No. 2016-02”) In February 2016, the FASB issued ASU No. 2016-02, which introduces a lessee model that brings substantially all leases onto the balance sheet. Under the new standard, a lessee will recognize on its balance sheet a lease liability and a right-of-use asset for all leases, including operating leases, with a term greater than 12 months. The new standard will also distinguish leases as either finance leases or operating leases. This distinction will affect how leases are measured and presented in the income statement and statement of cash flows. ASU No. 2016-02 is effective for annual and interim periods in fiscal years beginning after December 15, 2018. We are still assessing the potential impact that ASU No. 2016-02 will have on our financial statements and disclosures. Accounting Standards Update No. 2016-09 - “Stock Compensation” (“ASU No. 2016-09”) In March 2016, the FASB issued ASU No. 2016-09, which involves several aspects of the accounting for share-based payments, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance will require all income tax effects of awards to be recorded as income tax expense (or benefit) in the income statement. Currently, excess tax benefits are recorded in additional paid-in-capital in the balance sheet. In the statement of cash flows, the new guidance requires excess tax benefits to be presented as an operating activity rather than as a financing activity. ASU No. 2016-09 is effective for annual and interim periods beginning after December 15, 2016. We are still assessing the potential impact that ASU No. 2016-09 will have on our financial statements and disclosures. |
Earnings Per Share Dilutive Securities | We compute the effect of dilutive securities using the treasury stock method and average market prices during the period. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Earnings (Losses) and Number of Shares Used in Calculations of Basic and Diluted Earnings Per Share | The table below presents the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share: Three Months Ended (in millions, except per share amounts) March 31, 2016 March 31, 2015 Computation of Basic Earnings Per Share Net income $ 219 $ 207 Weighted average shares outstanding 254.4 277.7 Basic earnings per share $ 0.86 $ 0.75 Computation of Diluted Earnings Per Share Net income $ 219 $ 207 Weighted average shares outstanding 254.4 277.7 Effect of dilutive securities Employee stock option and appreciation right plans 1.9 2.4 Deferred stock incentive plans 0.6 0.7 Restricted stock units 2.0 2.7 Shares for diluted earnings per share 258.9 283.5 Diluted earnings per share $ 0.85 $ 0.73 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions for SARs | We used the following assumptions as part of a binomial lattice-based valuation to determine the fair value of the SARs we granted during the 2016 first quarter : Expected volatility 30.4 % Dividend yield 1.3 % Risk-free rate 1.7 % Expected term (in years) 8 - 9 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum Potential Amount of Future Fundings as the Primary Obligor for Guarantees and the Liability for Expected Future Fundings | We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for guarantees for which we are the primary obligor at March 31, 2016 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 113 $ 21 Operating profit 100 38 Other 9 1 Total guarantees where we are the primary obligor $ 222 $ 60 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | We provide detail on our long-term debt balances in the following table as of the end of the 2016 first quarter and year-end 2015 : At Period End ($ in millions) March 31, December 31, Senior Notes: Series H Notes, interest rate of 6.2%, face amount of $289, maturing June 15, 2016 289 289 Series I Notes, interest rate of 6.4%, face amount of $293, maturing June 15, 2017 293 293 Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 (effective interest rate of 4.4%) 596 595 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 (effective interest rate of 3.4%) 348 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%) 347 347 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 (effective interest rate of 3.4%) 395 395 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 (effective interest rate of 3.1%) 446 446 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 (effective interest rate of 4.0%) 343 343 Commercial paper, average interest rate of 0.8% at March 31, 2016 991 938 $2,000 Credit Facility — — Other 111 113 4,159 4,107 Less: Current portion of long-term debt (300 ) (300 ) $ 3,859 $ 3,807 |
Debt Principal Payments (Net of Unamortized Discounts) | The following table presents future principal payments that are due for our debt as of the end of the 2016 first quarter: Debt Principal Payments (net of unamortized discounts) ($ in millions) Amount 2016 $ 298 2017 302 2018 1,000 2019 606 2020 358 Thereafter 1,595 Balance at March 31, 2016 $ 4,159 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Composition of our Notes Receivable Balances (Net of Reserves and Unamortized Discounts) | The following table presents the composition of our notes receivable balances (net of reserves and unamortized discounts) at the end of the 2016 first quarter and year-end 2015 : At Period End ($ in millions) March 31, December 31, Senior, mezzanine, and other loans $ 225 $ 221 Less current portion (7 ) (6 ) $ 218 $ 215 |
Notes Receivable Principal Payments (Net of Reserves and Unamortized Discounts) and Interest Rates | The following table presents the expected future principal payments (net of reserves and unamortized discounts) as well as interest rates for our notes receivable as of the end of the 2016 first quarter: Notes Receivable Principal Payments (net of reserves and unamortized discounts) and Interest Rates ($ in millions) Amount 2016 $ 5 2017 3 2018 61 2019 5 2020 2 Thereafter 149 Balance at March 31, 2016 $ 225 Weighted average interest rate at March 31, 2016 7.8% Range of stated interest rates at March 31, 2016 0 - 15% |
Fair Value of Financial Instr23
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Carrying Values and Fair Values of Non-Current Financial Assets and Liabilities | We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments, determined under current guidance for disclosures on the fair value of financial instruments, in the following table: March 31, 2016 December 31, 2015 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 218 $ 211 $ 215 $ 209 Marketable securities 40 40 37 37 Total noncurrent financial assets $ 258 $ 251 $ 252 $ 246 Senior notes $ (2,768 ) $ (2,875 ) $ (2,766 ) $ (2,826 ) Commercial paper (991 ) (991 ) (938 ) (938 ) Other long-term debt (97 ) (105 ) (99 ) (108 ) Other noncurrent liabilities (65 ) (65 ) (63 ) (63 ) Total noncurrent financial liabilities $ (3,921 ) $ (4,036 ) $ (3,866 ) $ (3,935 ) |
Other Comprehensive (Loss) In24
Other Comprehensive (Loss) Income and Shareholders' (Deficit) Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) Activity | The following tables detail the accumulated other comprehensive income (loss) activity for the 2016 first quarter and 2015 first quarter : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ (196 ) Other comprehensive income (loss) before reclassifications (1) 22 (5 ) 1 18 Reclassification of losses from accumulated other comprehensive loss — 1 — 1 Net other comprehensive income (loss) 22 (4 ) 1 19 Balance at March 31, 2016 $ (170 ) $ (12 ) $ 5 $ (177 ) ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2014 $ (72 ) $ (9 ) $ 11 $ (70 ) Other comprehensive (loss) income before reclassifications (1) (26 ) 9 (1 ) (18 ) Reclassification of losses (gains) from accumulated other comprehensive loss 3 (5 ) — (2 ) Net other comprehensive (loss) income (23 ) 4 (1 ) (20 ) Balance at March 31, 2015 $ (95 ) $ (5 ) $ 10 $ (90 ) (1) Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature. These resulted in a loss of $20 million for the 2016 first quarter and a gain of $52 million for the 2015 first quarter . |
Changes in Shareholders' Deficit | The following table details the changes in common shares outstanding and shareholders’ deficit for the 2016 first 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 256.3 Balance at year-end 2015 $ (3,590 ) $ 5 $ 2,821 $ 4,878 $ (11,098 ) $ (196 ) — Net income 219 — — 219 — — — Other comprehensive income 19 — — — — 19 — Cash dividends ($0.25 per share) (64 ) — — (64 ) — — 1.6 Employee stock plan (26 ) — (70 ) (8 ) 52 — (3.7 ) Purchase of treasury stock (225 ) — — — (225 ) — 254.2 Balance at March 31, 2016 $ (3,667 ) $ 5 $ 2,751 $ 5,025 $ (11,271 ) $ (177 ) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Revenues | Segment Revenues Three Months Ended ($ in millions) March 31, 2016 March 31, 2015 North American Full-Service Segment $ 2,321 $ 2,175 North American Limited-Service Segment 833 738 International 556 542 Total segment revenues 3,710 3,455 Other unallocated corporate 62 58 Total consolidated revenues $ 3,772 $ 3,513 |
Segment Profits | Segment Profits Three Months Ended ($ in millions) March 31, 2016 March 31, 2015 North American Full-Service Segment $ 185 $ 146 North American Limited-Service Segment 155 151 International 75 77 Total segment profits 415 374 Other unallocated corporate (48 ) (39 ) Interest expense, net of interest income (41 ) (28 ) Income taxes (107 ) (100 ) Net Income $ 219 $ 207 |
Acquisitions and Dispositions-
Acquisitions and Dispositions- Acquisitions (Details) | Mar. 20, 2016$ / sharesshares |
Business Acquisition [Line Items] | |
Common stock, par value (in USD per share) | $ 0.01 |
Starwood Hotels & Resorts Worldwide, Inc. | |
Business Acquisition [Line Items] | |
Proposed payments to acquire businesses (in USD per share) | $ 21 |
Common Stock | Starwood Hotels & Resorts Worldwide, Inc. | |
Business Acquisition [Line Items] | |
Equity interests issuable per share owned by acquiree | shares | 0.80 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Dispositions and Planned Dispositions (Details) $ in Millions | 1 Months Ended | ||
Apr. 28, 2016USD ($)property | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Current assets of dispositions | $ 78 | $ 78 | |
Miami Beach EDITION Hotel | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Current assets of dispositions | 31 | ||
Current liabilities of dispositions | 2 | ||
Assets held for sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Current assets of dispositions | 78 | ||
Accrued expenses and other | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Current liabilities of dispositions | $ 3 | ||
Subsequent Event | North American, plot of land | North American Limited-Service Segment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of properties sold | property | 1 | ||
Current assets of dispositions | $ 47 | ||
Current liabilities of dispositions | $ 1 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of the Earnings (Losses) and Number of Shares Used in Calculations of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Computation of Basic Earnings Per Share | ||
Net income | $ 219 | $ 207 |
Weighted average shares outstanding | 254.4 | 277.7 |
Basic earnings per share (in USD per share) | $ 0.86 | $ 0.75 |
Computation of Diluted Earnings Per Share | ||
Net income | $ 219 | $ 207 |
Weighted average shares outstanding | 254.4 | 277.7 |
Effect of dilutive securities | ||
Shares for diluted earnings per share | 258.9 | 283.5 |
Diluted earnings per share (in USD per share) | $ 0.85 | $ 0.73 |
Employee stock option and appreciation right plans | ||
Effect of dilutive securities | ||
Effect of dilutive securities | 1.9 | 2.4 |
Deferred stock incentive plans | ||
Effect of dilutive securities | ||
Effect of dilutive securities | 0.6 | 0.7 |
Restricted stock units | ||
Effect of dilutive securities | ||
Effect of dilutive securities | 2 | 2.7 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee stock option and appreciation right plans | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities not included in the calculation of diluted earnings per share (in shares) | 0.5 | 0.2 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 28 | $ 24 | |
Deferred compensation costs related to unvested awards | $ 234 | $ 116 | |
Remaining shares authorized | 23 | ||
RSUs and Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, weighted average grant-date fair value (in USD per share) | $ 62 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted to certain officers, key employees and, for SARS, directors (in shares) | 1.6 | ||
Stock awards, vesting period | 4 years | ||
Stock awards, percentage of award vesting and becoming exercisable annually | 25.00% | ||
Stock awards, period of service after grant date | 1 year | ||
Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted to certain officers, key employees and, for SARS, directors (in shares) | 0.4 | ||
Stock awards, vesting period | 4 years | ||
Stock awards, percentage of award vesting and becoming exercisable annually | 25.00% | ||
Stock awards, expiration | 10 years | ||
Stock awards, weighted average grant-date fair value (in USD per share) | $ 22 | ||
Stock awards, weighted average exercise price (in USD per share) | $ 67 | ||
Stock Option Program and the SAR Program | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining shares authorized | 6 | ||
Executive Officers | Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted to certain officers, key employees and, for SARS, directors (in shares) | 0.2 | ||
Stock awards, vesting period | 3 years | ||
Senior Leaders and Members of Starwood Acquisition Team | Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted to certain officers, key employees and, for SARS, directors (in shares) | 0.4 | ||
Stock awards, vesting period | 3 years |
Share Based Compensation - Assu
Share Based Compensation - Assumptions for SARs Granted (Detail) - Stock Appreciation Rights | 3 Months Ended |
Mar. 31, 2016 | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected volatility | 30.40% |
Dividend yield | 1.30% |
Risk-free rate | 1.70% |
Minimum | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected term (in years) | 8 years |
Maximum | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected term (in years) | 9 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 32.80% | 32.40% |
Unrecognized tax benefits | $ 25 | |
Unrecognized tax benefits, increase resulting from current period tax positions | 1 | |
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | 16 | |
Net cash payments for income taxes, net of refunds | $ 43 | $ 58 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) € in Millions, SGD in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016SGD | Dec. 31, 2015 | Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Dec. 30, 2011USD ($) | Sep. 09, 2005EUR (€) | |
Primary Obligor | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | $ 222 | |||||
Recorded Liability for Guarantees | 60 | |||||
Primary Obligor | Debt service | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 113 | |||||
Recorded Liability for Guarantees | 21 | |||||
Primary Obligor | Debt service | New York City EDITION Hotel | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 315 | |||||
Guarantor obligations, term | 2 years | |||||
Guarantor obligations, extended term | 3 years | |||||
Primary Obligor | Operating profit | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 100 | |||||
Recorded Liability for Guarantees | 38 | |||||
Primary Obligor | Other | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 9 | |||||
Recorded Liability for Guarantees | 1 | |||||
Primary Obligor | Not Yet In Effect Condition | Debt service | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 11 | |||||
Primary Obligor | Not Yet In Effect Condition | Operating profit | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 44 | |||||
Primary Obligor | Not Yet In Effect Condition | Other | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 1 | |||||
Secondarily Liable | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 57 | |||||
Secondarily Liable | MVW Spin-off | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 5 | |||||
Guarantee obligations, carrying value | 1 | |||||
Secondarily Liable | MVW Spin-off | Expiration in 2022 | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | SGD | SGD 7 | |||||
Secondarily Liable | Lease Obligations and Debt Securities Payable | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Guarantee obligations, carrying value | 3 | |||||
Secondarily Liable | Property Lease Guarantee | Sunrise Senior Living Inc | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 41 | |||||
Guarantee obligations, cash collateralized | $ 1 | |||||
Collateral for continuing lease obligation contingency, future minimum annual payments due from 2014 until 2018 | 1 | |||||
Secondarily Liable | Property Lease Guarantee | Sunrise Senior Living Inc | Key Bank | Letter of Credit | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Letter of credit provided by Sunrise, amount available | $ 85 | |||||
Letter of credit provided by Sunrise, amount available at period end | 49 | |||||
Secondarily Liable | Property Lease Guarantee | Renaissance Hotel Group N.V. | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Guarantee obligations, cash collateralized | 2 | € 2 | € 35 | |||
Annual rent payments, approximately | 4 | |||||
Remaining rent payments, approximately | 18 | |||||
Secondarily Liable | Debt Securities Payable | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 16 | |||||
Secondarily Liable | Debt Securities Payable | Sunrise Senior Living Inc | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 3 | |||||
Secondarily Liable | Debt Securities Payable | CNL Retirement Properties Inc | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 13 | |||||
Secondarily Liable | Lease is Terminated by End of 2019 | Property Lease Guarantee | ExecuStay | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Maximum Potential Amount of Future Fundings | 6 | |||||
Other noncurrent liabilities | Primary Obligor | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Recorded Liability for Guarantees | $ 60 | |||||
Minimum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Funding guarantees, minimum term | 4 years | |||||
Maximum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Funding guarantees, minimum term | 10 years |
Commitments and Contingencies34
Commitments and Contingencies - Commitments (Detail) € in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)entity | Mar. 31, 2016EUR (€)entity | |
Investment in Other Joint Venture Commitment | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Acquisition interests in joint ventures | entity | 2 | 2 |
Contingent acquisition period | 5 years | |
Deposits in conjunction with contingent obligation to acquire the interest in joint ventures | $ 20 | € 15 |
Deposits in conjunction with contingent obligation to acquire the interest in joint ventures, remaining amount | 13 | € 11 |
Real Estate Investment | Upper Limit | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Investment commitments expected to be funded in current year | 10 | |
North American Full-Service Property | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Construction commitment | 36 | |
Information Technology Hardware, Software, Accounting, Finance, and Maintenance Services | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Purchase commitments | 131 | |
Purchase commitments expected to be funded in 2016 | 70 | |
Purchase commitments expected to be funded in 2017 | 49 | |
Purchase commitments expected to be funded in 2018 | 9 | |
Purchase commitments expected to be funded thereafter | 3 | |
Commitments | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Investment commitments not expected to be funded | 49 | |
Limited Service | Equity Investment for Non Controlling Interest in Partnership Commitment | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Investment commitments expected to be funded in 2016 | 3 | |
Investment commitments not expected to be funded | 19 | |
Limited Service | Equity Investment for Non Controlling Interest in Partnership Commitment | Upper Limit | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Investment commitments | $ 22 |
Commitments and Contingencies35
Commitments and Contingencies - Letters of Credit (Details) $ in Millions | Mar. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
Surety bonds issued | $ 161 |
Outside Effective Credit Facility | |
Commitments and Contingencies Disclosure [Line Items] | |
Letters of credit outstanding | $ 77 |
Commitments and Contingencies36
Commitments and Contingencies - Legal Proceedings (Details) | 1 Months Ended | |
Dec. 18, 2015lawsuit | Mar. 31, 2012hotel | |
Pricing Investigation by Korea Fair Trade Commission | ||
Loss Contingencies [Line Items] | ||
Number of hotels included in pricing investigation, managed by Company | hotel | 2 | |
Challenge to Starwood Combination | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, New Claims Filed, Number | lawsuit | 7 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
$2,000 Credit Facility | $ 0 | $ 0 |
Other | 111,000,000 | 113,000,000 |
Balance at March 31, 2016 | 4,159,000,000 | 4,107,000,000 |
Less: Current portion of long-term debt | (300,000,000) | (300,000,000) |
Long-term debt, noncurrent | 3,859,000,000 | 3,807,000,000 |
Multicurrency revolving credit agreement, aggregate borrowings | 2,000,000,000 | 2,000,000,000 |
Series H, Senior Notes 6.2% Due June 15, 2016 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 289,000,000 | 289,000,000 |
Series I, Senior Notes 6.4% Due June 15, 2017 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 293,000,000 | 293,000,000 |
Series K, Senior Notes 3.0% Due March 1, 2019 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 596,000,000 | 595,000,000 |
Series L, Senior Notes 3.3% Due September 15, 2022 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 348,000,000 | 348,000,000 |
Series M, Senior Notes 3.4% Due October 15, 2020 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 347,000,000 | 347,000,000 |
Series N, Senior Notes 3.1% Due October 15, 2021 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 395,000,000 | 395,000,000 |
Series O, Senior Notes 2.9% Due March 1, 2021 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 446,000,000 | 446,000,000 |
Series P, Senior Notes 3.8% Due October 1, 2025 | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 343,000,000 | $ 343,000,000 |
Senior Notes | Series H, Senior Notes 6.2% Due June 15, 2016 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 6.20% | 6.20% |
Senior Notes, face amount | $ 289,000,000 | $ 289,000,000 |
Senior Notes, effective interest rate | 6.30% | 6.30% |
Senior Notes | Series I, Senior Notes 6.4% Due June 15, 2017 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 6.40% | 6.40% |
Senior Notes, face amount | $ 293,000,000 | $ 293,000,000 |
Senior Notes, effective interest rate | 6.50% | 6.50% |
Senior Notes | Series K, Senior Notes 3.0% Due March 1, 2019 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.00% | 3.00% |
Senior Notes, face amount | $ 600,000,000 | $ 600,000,000 |
Senior Notes, effective interest rate | 4.40% | 4.40% |
Senior Notes | Series L, Senior Notes 3.3% Due September 15, 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.30% | 3.30% |
Senior Notes, face amount | $ 350,000,000 | $ 350,000,000 |
Senior Notes, effective interest rate | 3.40% | 3.40% |
Senior Notes | Series M, Senior Notes 3.4% Due October 15, 2020 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.40% | 3.40% |
Senior Notes, face amount | $ 350,000,000 | $ 350,000,000 |
Senior Notes, effective interest rate | 3.60% | 3.60% |
Senior Notes | Series N, Senior Notes 3.1% Due October 15, 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.10% | 3.10% |
Senior Notes, face amount | $ 400,000,000 | $ 400,000,000 |
Senior Notes, effective interest rate | 3.40% | 3.40% |
Senior Notes | Series O, Senior Notes 2.9% Due March 1, 2021 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 2.875% | 2.875% |
Senior Notes, face amount | $ 450,000,000 | $ 450,000,000 |
Senior Notes, effective interest rate | 3.10% | 3.10% |
Senior Notes | Series P, Senior Notes 3.8% Due October 1, 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated interest rate | 3.80% | 3.80% |
Senior Notes, face amount | $ 350,000,000 | $ 350,000,000 |
Senior Notes, effective interest rate | 4.00% | 4.00% |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Commercial paper, average interest rate of 0.8% at March 31, 2016 | $ 991,000,000 | $ 938,000,000 |
Long-term debt, average interest rate | 0.80% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | Mar. 20, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||||
Cash paid for interest, net of amounts capitalized | $ 23,000,000 | $ 12,000,000 | ||
Multicurrency revolving credit agreement, aggregate borrowings | 2,000,000,000 | $ 2,000,000,000 | ||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, potential amendment, aggregate borrowings | $ 3,750,000,000 | |||
Bridge Loan | Bridge Facility Available for Financing Starwood Combination | ||||
Line of Credit Facility [Line Items] | ||||
Bridge facility commitment | $ 3,500,000,000 | |||
Bridge facility, term | 364 days |
Long-Term Debt - Debt Principal
Long-Term Debt - Debt Principal Payments (Net of Unamortized Discounts) (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,016 | $ 298 | |
2,017 | 302 | |
2,018 | 1,000 | |
2,019 | 606 | |
2,020 | 358 | |
Thereafter | 1,595 | |
Balance at March 31, 2016 | $ 4,159 | $ 4,107 |
Notes Receivable - Composition
Notes Receivable - Composition of our Notes Receivable Balances (Net of Reserves and Unamortized Discounts) (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Senior, mezzanine, and other loans | $ 225 | $ 221 |
Less current portion | (7) | (6) |
Notes receivable, noncurrent | $ 218 | $ 215 |
Notes Receivable - Additional I
Notes Receivable - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Notes receivable, past due | $ 0 | ||
Notes receivable, unamortized discounts, balance | 30,000,000 | $ 31,000,000 | |
Investment in impaired notes receivables | 72,000,000 | ||
Notes receivable reserve representing an allowance for credit losses | 55,000,000 | 55,000,000 | |
Investment in impaired loans with no related allowance for credit losses | 17,000,000 | $ 17,000,000 | |
Average investment in notes receivables | $ 72,000,000 | $ 65,000,000 |
Notes Receivable - Principal Pa
Notes Receivable - Principal Payments (Net of Reserves and Unamortized Discounts) and Interest Rates (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
2,016 | $ 5 | |
2,017 | 3 | |
2,018 | 61 | |
2,019 | 5 | |
2,020 | 2 | |
Thereafter | 149 | |
Senior, mezzanine, and other loans | $ 225 | $ 221 |
Weighted average interest rate at March 31, 2016 | 7.80% | |
Range of stated interest rates at March 31, 2016, minimum | 0.00% | |
Range of stated interest rates at March 31, 2016, maximum | 15.00% |
Fair Value of Financial Instr43
Fair Value of Financial Instruments - Carrying Values and Fair Values of Non-Current Financial Assets and Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | $ 218 | $ 215 |
Other noncurrent liabilities | (1,041) | (1,010) |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 218 | 215 |
Marketable securities | 40 | 37 |
Total noncurrent financial assets | 258 | 252 |
Senior notes | (2,768) | (2,766) |
Commercial paper | (991) | (938) |
Other long-term debt | (97) | (99) |
Other noncurrent liabilities | (65) | (63) |
Total noncurrent financial liabilities | (3,921) | (3,866) |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 211 | 209 |
Marketable securities | 40 | 37 |
Total noncurrent financial assets | 251 | 246 |
Senior notes | (2,875) | (2,826) |
Commercial paper | (991) | (938) |
Other long-term debt | (105) | (108) |
Other noncurrent liabilities | (65) | (63) |
Total noncurrent financial liabilities | $ (4,036) | $ (3,935) |
Fair Value of Financial Instr44
Fair Value of Financial Instruments - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Commercial Paper | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Commercial paper, maturity term (generally 30 days or less) | 30 days |
Fair Value, Inputs, Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Carrying value of our marketable securities | $ 40 |
Other Comprehensive (Loss) In45
Other Comprehensive (Loss) Income and Shareholders' (Deficit) Equity - Accumulated Other Comprehensive (Loss) Income Activity (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ (196) | |
Reclassification of losses from accumulated other comprehensive loss | 1 | $ (2) |
Balance at end of period | (177) | |
Other comprehensive income (loss) before reclassification related to foreign current translation adjustment, gain on intra-equity foreign currency transaction | (20) | 52 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (192) | (72) |
Other comprehensive income (loss) before reclassifications | 22 | (26) |
Reclassification of losses from accumulated other comprehensive loss | 0 | 3 |
Net other comprehensive income (loss) | 22 | (23) |
Balance at end of period | (170) | (95) |
Derivative Instrument Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (8) | (9) |
Other comprehensive income (loss) before reclassifications | (5) | 9 |
Reclassification of losses from accumulated other comprehensive loss | 1 | (5) |
Net other comprehensive income (loss) | (4) | 4 |
Balance at end of period | (12) | (5) |
Available-For-Sale Securities Unrealized Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | 4 | 11 |
Other comprehensive income (loss) before reclassifications | 1 | (1) |
Reclassification of losses from accumulated other comprehensive loss | 0 | 0 |
Net other comprehensive income (loss) | 1 | (1) |
Balance at end of period | 5 | 10 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (196) | (70) |
Other comprehensive income (loss) before reclassifications | 18 | (18) |
Reclassification of losses from accumulated other comprehensive loss | 1 | (2) |
Net other comprehensive income (loss) | 19 | (20) |
Balance at end of period | $ (177) | $ (90) |
Other Comprehensive (Loss) In46
Other Comprehensive (Loss) Income and Shareholders' (Deficit) Equity - Changes in Shareholders' Deficit (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | $ (3,590) | |
Balance at year-end 2015, shares | 256.3 | |
Net income | $ 219 | $ 207 |
Other comprehensive income | 19 | $ (20) |
Cash dividends ($0.25 per share) | (64) | |
Employee stock plan | $ (26) | |
Employee stock plan, shares | 1.6 | |
Purchase of treasury stock | $ (225) | |
Purchase of treasury stock, shares | (3.7) | |
Balance at March 31, 2016 | $ (3,667) | |
Balance at March 31, 2016, shares | 254.2 | |
Cash dividends, per share (in USD per share) | $ 0.25 | |
Additional Paid-in- Capital | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | $ 2,821 | |
Employee stock plan | (70) | |
Balance at March 31, 2016 | 2,751 | |
Retained Earnings | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | 4,878 | |
Net income | 219 | |
Cash dividends ($0.25 per share) | (64) | |
Employee stock plan | (8) | |
Balance at March 31, 2016 | 5,025 | |
Treasury Stock, at Cost | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | (11,098) | |
Employee stock plan | 52 | |
Purchase of treasury stock | (225) | |
Balance at March 31, 2016 | (11,271) | |
Accumulated Other Comprehensive Loss | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | (196) | |
Other comprehensive income | 19 | |
Balance at March 31, 2016 | (177) | |
Class A Common Stock | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at year-end 2015 | 5 | |
Balance at March 31, 2016 | $ 5 |
Business Segments - Additional
Business Segments - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 3 |
Number of operating segments related to reorganization | 4 |
Business Segments - Segment Rev
Business Segments - Segment Revenues (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 3,772 | $ 3,513 |
Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 3,710 | 3,455 |
Other unallocated corporate | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 62 | 58 |
North American Full-Service Segment | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 2,321 | 2,175 |
North American Limited-Service Segment | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | 833 | 738 |
International | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenues | $ 556 | $ 542 |
Business Segments - Segment Pro
Business Segments - Segment Profits (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | $ 367 | $ 332 |
Interest expense, net of interest income | (41) | (28) |
Income taxes | (107) | (100) |
Net income | 219 | 207 |
Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | 415 | 374 |
Other unallocated corporate | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | (48) | (39) |
North American Full-Service Segment | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | 185 | 146 |
North American Limited-Service Segment | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | 155 | 151 |
International | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income (Loss) | $ 75 | $ 77 |