Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 26, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
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 | 378,890,739 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUES | ||
Base management fees | $ 264 | $ 172 |
Franchise fees | 365 | 250 |
Incentive management fees | 153 | 101 |
Management and franchise fees | 782 | 523 |
Owned, leased, and other revenue | 439 | 204 |
Cost reimbursements | 4,340 | 3,045 |
Revenues | 5,561 | 3,772 |
OPERATING COSTS AND EXPENSES | ||
Owned, leased, and other - direct | 358 | 166 |
Reimbursed costs | 4,340 | 3,045 |
Depreciation, amortization, and other | 65 | 31 |
General, administrative, and other | 210 | 155 |
Merger-related costs and charges | 51 | 8 |
Costs and Expenses, Total | 5,024 | 3,405 |
OPERATING INCOME | 537 | 367 |
Gains and other income, net | 0 | 0 |
Interest expense | (70) | (47) |
Interest income | 7 | 6 |
Equity in earnings | 11 | 0 |
INCOME BEFORE INCOME TAXES | 485 | 326 |
Provision for income taxes | (120) | (107) |
NET INCOME | $ 365 | $ 219 |
EARNINGS PER SHARE | ||
Earnings per share - basic (in USD per share) | $ 0.95 | $ 0.86 |
Earnings per share - diluted (in USD per share) | 0.94 | 0.85 |
CASH DIVIDENDS DECLARED PER SHARE (in USD per share) | $ 0.30 | $ 0.25 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 365 | $ 219 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 188 | 22 |
Derivative instrument adjustments, net of tax | (2) | (5) |
Unrealized (loss) gain on available-for-sale securities, net of tax | (1) | 1 |
Reclassification of losses, net of tax | 0 | 1 |
Total other comprehensive income, net of tax | 185 | 19 |
Comprehensive income | $ 550 | $ 238 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and equivalents | $ 738 | $ 858 |
Accounts and notes receivable, net | 1,752 | 1,695 |
Prepaid expenses and other | 231 | 230 |
Assets held for sale | 400 | 588 |
Assets, current, total | 3,121 | 3,371 |
Property and equipment, net | 2,109 | 2,335 |
Intangible assets | ||
Goodwill | 7,802 | 7,598 |
Goodwill and intangible assets, net, total | 17,125 | 16,868 |
Equity and cost method investments | 745 | 728 |
Notes receivable, net | 267 | 245 |
Deferred tax assets | 119 | 116 |
Other noncurrent assets | 439 | 477 |
Total assets | 23,925 | 24,140 |
Current liabilities | ||
Current portion of long-term debt | 309 | 309 |
Accounts payable | 661 | 687 |
Accrued payroll and benefits | 1,034 | 1,174 |
Liability for guest loyalty programs | 1,948 | 1,866 |
Accrued expenses and other | 1,271 | 1,111 |
Liabilities, current, total | 5,223 | 5,147 |
Long-term debt | 8,161 | 8,197 |
Liability for guest loyalty programs | 2,662 | 2,675 |
Deferred tax liabilities | 891 | 1,020 |
Other noncurrent liabilities | 1,820 | 1,744 |
Shareholders’ equity | ||
Class A Common Stock | 5 | 5 |
Additional paid-in-capital | 5,711 | 5,808 |
Retained earnings | 6,750 | 6,501 |
Treasury stock, at cost | (6,986) | (6,460) |
Accumulated other comprehensive loss | (312) | (497) |
Stockholders' equity (deficit) attributable to parent | 5,168 | 5,357 |
Liabilities and equity (deficit), total | 23,925 | 24,140 |
Brands | ||
Intangible assets | ||
Intangible assets | 6,577 | 6,509 |
Contract acquisition costs and other | ||
Intangible assets | ||
Intangible assets | $ 2,746 | $ 2,761 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 365 | $ 219 |
Adjustments to reconcile to cash provided by operating activities: | ||
Depreciation, amortization, and other | 65 | 31 |
Share-based compensation | 48 | 28 |
Income taxes | 82 | 58 |
Liability for guest loyalty programs | 60 | 76 |
Merger-related charges | (36) | 0 |
Working capital changes | (108) | (45) |
Other | 50 | 27 |
Net cash provided by operating activities | 526 | 394 |
INVESTING ACTIVITIES | ||
Capital expenditures | (48) | (42) |
Dispositions | 311 | 4 |
Loan advances | (28) | (16) |
Loan collections | 7 | 2 |
Contract acquisition costs | (54) | (21) |
Other | (4) | 9 |
Net cash provided by (used in) investing activities | 184 | (64) |
FINANCING ACTIVITIES | ||
Commercial paper/Credit facility, net | (33) | 51 |
Issuance of long-term debt | 1 | 0 |
Repayment of long-term debt | (4) | (2) |
Issuance of Class A Common Stock | 2 | 6 |
Dividends paid | (115) | (64) |
Purchase of treasury stock | (582) | (248) |
Other | (99) | (70) |
Net cash used in financing activities | (830) | (327) |
(DECREASE) INCREASE IN CASH AND EQUIVALENTS | (120) | 3 |
CASH AND EQUIVALENTS, beginning of period | 858 | 96 |
CASH AND EQUIVALENTS, end of period | $ 738 | $ 99 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
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. and subsidiaries (referred to in this report as “we,” “us,” “Marriott,” 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 Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (v) our properties, brands, or markets in the United States (“U.S.”) and Canada as “North America” or “North American,” and (vi) our properties, brands, or markets outside of the U.S. and Canada as “International.” In addition, 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, 2016 (“ 2016 Form 10-K”). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2016 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, 2017 and December 31, 2016 and the results of our operations and cash flows for the three months ended March 31, 2017 and March 31, 2016 . 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. We have made certain reclassifications of our prior year amounts to conform to our current presentation of “Merger-related costs and charges” in our Income Statements. Beginning in the 2017 first quarter, we reclassified branding fees for third-party residential sales and credit card licensing to the “Franchise fees” caption from the “Owned, leased, and other” caption on our Income Statements, as we believe branding fees are more akin to franchise royalties than owned and leased hotel profits. Branding fees for the three months ended March 31, 2017 totaled $60 million. We reclassified the prior period amounts, which totaled $43 million for the three months ended March 31, 2016 , to conform to our current presentation. In the 2017 first quarter, our Asia Pacific operating segment met the applicable accounting criteria to be a reportable segment. Our Europe, Middle East and Africa, and Caribbean and Latin America operating segments do not individually meet the criteria for separate disclosure as reportable segments, and accordingly we combined them into an “all other category” which we refer to as “Other International.” We reclassified prior period amounts to conform to our current presentation. See Footnote 11 “ Business Segments .” Acquisition of Starwood Hotels & Resorts Worldwide On September 23, 2016 (the “Merger Date”), we completed the acquisition of Starwood Hotels & Resorts Worldwide, LLC, formerly known as Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), through a series of transactions (the “Starwood Combination”), after which Starwood became an indirect wholly-owned subsidiary of the Company. Accordingly, our Income Statements include Starwood’s results of operations in the three months ended March 31, 2017 , but exclude Starwood’s results of operations in the three months ended March 31, 2016 as that was prior to the Merger Date. We refer to our business associated with brands that were in our portfolio before the Starwood Combination as “Legacy-Marriott” and to the Starwood business and brands that we acquired as “Legacy-Starwood.” See Footnote 2 “ Acquisitions and Dispositions ” for more information on the Starwood Combination. New Accounting Standards Accounting Standards Update No. 2014-09 - “Revenue from Contracts with Customers” (“ASU 2014-09”) ASU 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 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 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 2014-09, and we are evaluating the available adoption methods. We are still assessing the potential impact that ASU 2014-09 will have on our financial statements and disclosures, but we believe that recognition of base management and franchise fees will remain unchanged, but there likely will be changes to our revenue recognition policies related to our loyalty programs and the following: • We expect to recognize franchise application and relicensing fees over the term of the franchise contract rather than at hotel opening. • We expect to present the amortization of contract acquisition costs paid to customers as a reduction of revenue rather than as an amortization expense. • We expect to recognize gains from the sale of real estate assets when control of the asset is transferred to the buyer, generally at the time the sale closes. Under current guidance, we defer gains on sales of real estate assets if we maintain substantial continuing involvement. We do not expect that this change will have a material impact on our Financial Statements, as we typically do not have transactions that require us to defer significant gains. Accounting Standards Update No. 2016-02 - “Leases” (“ASU 2016-02”) In February 2016, the FASB issued ASU 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 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 2016-02 will have on our financial statements and disclosures. Accounting Standards Update No. 2016-09 - “Stock Compensation” (“ASU 2016-09”) We adopted ASU 2016-09 in the 2017 first quarter, which involves several aspects of the accounting for share-based payments. The new guidance had the following impacts on our Financial Statements: • We now record excess tax benefits (or deficiencies) as income tax expense (or benefit) in our Income Statements. Previously, we recorded excess tax benefits (deficiencies) in additional paid-in-capital in our Balance Sheets. As required, we prospectively applied this amendment in our Income Statements, which resulted in a benefit of $43 million to our provision for income taxes, approximately $0.11 per diluted share, for the three months ended March 31, 2017 . • We now classify excess tax benefits (or deficiencies) along with other income taxes in operating activities in our Statements of Cash Flows. ASU 2016-09 allowed for this amendment to be applied either prospectively or retrospectively. For consistency with our application of ASU 2016-09 in our Income Statements, we applied this amendment prospectively in our Statements of Cash Flows. For the three months ended March 31, 2017 , operating activities in our Statements of Cash Flows includes $43 million from excess tax benefits. For the three months ended March 31, 2016, we classified $ 6 million of excess tax benefits as financing inflows. • We now classify cash paid to taxing authorities when we withhold shares for employee tax-withholding purposes as a financing activity. As required, we retrospectively applied this amendment in our Statements of Cash Flows, and accordingly we reclassified $ 61 million of cash outflows from operating activities to financing activities for the three months ended March 31, 2016 . Accounting Standards Update No. 2017-01 - “Clarifying the Definition of a Business” (“ASU 2017-01”) In January 2017, the FASB issued ASU 2017-01, clarifying the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. We prospectively adopted ASU 2017-01 in the 2017 first quarter, and as a result, we determined that our planned hotel disposition arising during the period did not meet the definition of a business, and therefore we did not assign any goodwill of the reporting unit to the carrying value of the asset. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Starwood Combination The following table presents the fair value of each class of consideration that we transferred in the Starwood Combination. (in millions, except per share amounts) Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares 134.4 Marriott common stock price as of Merger Date $ 68.44 Fair value of Marriott common stock issued in exchange for Starwood outstanding shares 9,198 Cash consideration to Starwood shareholders, net of cash acquired of $1,116 2,412 Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards 71 Total consideration transferred, net of cash acquired $ 11,681 Preliminary Fair Values of Assets Acquired and Liabilities Assumed . Our preliminary estimates of fair values of the assets that we acquired and the liabilities that we assumed are based on the information that was available as of the Merger Date, and we are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the Merger Date. During the 2017 first quarter , we refined our valuation models related to certain acquired IT systems, our assumptions for capital expenditure needs of owned and leased hotels, and certain assumptions related to operating lease agreements. The following table presents our preliminary estimates of fair values of the assets that we acquired and the liabilities that we assumed on the Merger Date as previously reported at year-end 2016 and at the end of the 2017 first quarter . ($ in millions) September 23, 2016 December 31, 2016) Adjustments September 23, 2016 March 31, 2017) Working capital $ (180 ) $ (35 ) $ (215 ) Property and equipment, including assets held for sale 1,999 (99 ) 1,900 Identified intangible assets 7,957 (40 ) 7,917 Equity and cost method investments 579 — 579 Other noncurrent assets 224 (29 ) 195 Deferred income taxes, net (1,516 ) 92 (1,424 ) Guest loyalty program (1,631 ) (7 ) (1,638 ) Debt (1,871 ) — (1,871 ) Other noncurrent liabilities (654 ) (32 ) (686 ) Net assets acquired 4,907 (150 ) 4,757 Goodwill (1) 6,774 150 6,924 $ 11,681 $ — $ 11,681 (1) Goodwill primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined operations, and it is not deductible for tax purposes. See Footnote 11 “ Business Segments ” for our preliminary assignment of goodwill by reportable segment. Property and Equipment . We provisionally estimated the value of the acquired land, building, and furniture and equipment using a combination of the income, cost, and market approaches, which are primarily based on significant Level 2 and Level 3 assumptions, such as estimates of future income growth, capitalization rates, discount rates, and capital expenditure needs of the hotels. We are continuing to assess the marketplace assumptions and property conditions, which could result in changes to these provisional values. Identified Intangible Assets . The following table presents our preliminary estimates of the fair values of Starwood’s identified intangible assets and their related estimated useful lives. Estimated Fair Value ($ in millions) Estimated Useful Life (in years) Brands $ 6,452 indefinite Management agreements 672 10-25 Franchise agreements 744 10-80 Loyalty program marketing rights 49 30 $ 7,917 We provisionally estimated the value of Starwood’s brands using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value. We estimated the value of management and franchise agreements using the multi-period excess earnings method, which is a variation of the income approach. This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset. These valuation approaches utilize Level 3 inputs, and we continue to review Starwood’s contracts and historical performance in addition to evaluating the inputs, including the discount rates and growth assumptions, which could result in changes to these provisional values. Equity Method Investments . Our equity method investments consist primarily of entities that own hotel real estate. We provisionally estimated the value of that real estate using the same methods as for property and equipment described above. We continue to review the terms of the partnership and joint venture agreements, assess the conditions of the properties, and evaluate the discount rates, any discounts for lack of marketability and control as appropriate, and growth assumptions used in valuing these investments, which could result in changes to our provisional values. Deferred Income Taxes . We provisionally estimated deferred income taxes based on statutory tax rates in the jurisdictions of the legal entities where the acquired noncurrent assets and liabilities are taxed. We continue to assess the tax rates used, and we will update our estimate of deferred income taxes based on any changes to our provisional valuations of the related assets and liabilities and refinement of the effective tax rates, which could result in changes to these provisional values. Guest Loyalty Program . As of the Merger Date, we assumed the fair value of this liability equals Starwood’s historical book value in establishing a provisional estimate for this liability. We are reviewing assumptions utilized in an actuarial valuation of the future redemption obligations, which could result in changes to the provisional value of the program liability. Debt, Leases, and Other Contractual Obligations or Contingencies . We primarily valued debt using quoted market prices, which are considered Level 1 inputs as they are observable in the market. We identified certain onerous provisions within a few of the acquired management and other agreements. We valued liabilities associated with these provisions using an income approach and Level 3 inputs, including cash flows, discount rates, and growth assumptions. We continue to review and evaluate Starwood’s agreements, historical performance, discount rates, and growth assumptions, which could result in changes to these provisional values. In connection with the Starwood Combination, we are currently assessing various regulatory compliance matters at several foreign Legacy-Starwood locations, including compliance with the U.S. Foreign Corrupt Practices Act. The results of this assessment may give rise to contingencies that could require us to record balance sheet liabilities or accrue expenses. While any such amounts are not currently estimable, we will review our provisional assessment of these contingencies as we gather more information. Dispositions and Planned Dispositions In the 2017 first quarter, we sold a North American Full-Service hotel, which we had acquired in the Starwood Combination and previously classified as “Assets held for sale,” and received $306 million in cash. In conjunction with the sale, we also transferred the associated ground lease, as a result of which our future minimum operating lease obligations decreased by approximately $194 million as follows: $ 3 million in 2017 , $ 4 million in 2018 , $ 4 million in 2019 , $ 4 million in 2020 , $ 4 million in 2021 , and $ 175 million thereafter. At the end of the 2017 first quarter , we held $400 million of assets classified as “Assets held for sale” on our Balance Sheets related to two North American Full-Service hotels and the remaining Miami Beach EDITION residences. |
Merger-Related Costs and Charge
Merger-Related Costs and Charges | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Merger-Related Costs and Charges | MERGER-RELATED COSTS AND CHARGES The following table presents pre-tax merger-related costs and other charges that we incurred in connection with the Starwood Combination. Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 Merger-related costs and charges Transaction costs $ 7 $ 7 Employee termination costs 21 — Integration costs 23 1 51 8 Interest expense — 2 $ 51 $ 10 Transaction costs represent costs related to the planning and execution of the Starwood Combination, primarily for financial advisory, legal, and other professional service fees. Employee termination costs represent employee severance, retention, and other termination related benefits. Integration costs primarily represent integration employee salaries and share-based compensation, change management consultants, and technology-related costs. Merger-related interest expense in the 2016 first quarter reflects costs that we incurred for a bridge term loan facility commitment related to the Starwood Combination. In connection with the Starwood Combination, we initiated a restructuring program to achieve cost synergies from our combined operations. We did not allocate costs associated with our restructuring program to any of our business segments. The following table presents our restructuring reserve activity during the 2017 first quarter : ($ in millions) Employee termination costs Balance at year-end 2016 $ 192 Charges — Cash payments (39 ) Adjustments (1) 9 Balance at March 31, 2017, classified in “Accrued expenses and other” $ 162 (1) Adjustments primarily reflect the reversal of charges for certain employees who accepted other positions at the Company or resigned and the impact of cumulative translation adjustments. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 March 31, 2016 Computation of Basic Earnings Per Share Net income $ 365 $ 219 Shares for basic earnings per share 384.9 254.4 Basic earnings per share $ 0.95 $ 0.86 Computation of Diluted Earnings Per Share Net income $ 365 $ 219 Shares for basic earnings per share 384.9 254.4 Effect of dilutive securities Share-based compensation 5.1 4.5 Shares for diluted earnings per share 390.0 258.9 Diluted earnings per share $ 0.94 $ 0.85 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 0.2 million for the 2017 first quarter and 0.5 million for the 2016 first quarter from our calculation of diluted earnings per share because their exercise prices were greater than the average market prices. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective tax rate decreased to 24.7% for the 2017 first quarter from 32.8% for the 2016 first quarter , primarily due to a tax benefit of $43 million from the adoption of ASU 2016-09. We paid cash for income taxes, net of refunds, of $37 million in the 2017 first quarter and $43 million in the 2016 first quarter . |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION We recorded share-based compensation expense of $48 million in the 2017 first quarter and $28 million in the 2016 first quarter . Deferred compensation costs for unvested awards totaled $301 million at March 31, 2017 and $192 million at December 31, 2016 . RSUs and PSUs We granted 1.6 million RSUs during the 2017 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. We granted 0.2 million PSUs in the 2017 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 performance period. RSUs, including PSUs, granted in the 2017 first quarter had a weighted average grant-date fair value of $83 . SARs We granted 0.3 million SARs to officers and key employees during the 2017 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 2017 first quarter was $30 and the weighted average exercise price was $88 . We used the following assumptions as part of a binomial lattice-based valuation to determine the fair value of the SARs we granted during the 2017 first quarter : Expected volatility 30.9 % Dividend yield 1.3 % Risk-free rate 2.4 % Expected term (in years) 7 - 9 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for guarantees for which we are the primary obligor at March 31, 2017 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 156 $ 23 Operating profit 116 34 Other 8 2 Total guarantees where we are the primary obligor $ 280 $ 59 Legal Proceedings In November 2015, Starwood announced a malware intrusion had affected point of sale systems at various outlets within certain Legacy-Starwood branded hotels. This resulted in the potential compromise of credit card data and associated personal information. The affected credit card companies are evaluating whether and to what extent financial penalties should be imposed. In addition, a putative class action arising from the malware intrusion was filed against Starwood on January 5, 2016 in the United States District Court for the Southern District of California. The named plaintiff, Paul Dugas, does not specify any damages sought. Starwood initially filed a motion to dismiss that was granted in part and denied in part in November 2016. The plaintiff filed an amended complaint in December 2016, and in March 2017, we filed another motion to dismiss. On April 6, 2017, the court issued an Order to Show Cause why the case should not be dismissed for lack of subject matter jurisdiction, to which the parties have responded. A hearing has been scheduled for May 12, 2017. On May 10, 2016, the owners of the Sheraton Grand Chicago and the Westin Times Square, New York, filed suit in the Supreme Court of New York against Starwood and Marriott seeking to enjoin the merger of the two companies. The complaint alleges violations of the territorial restrictions contained in the management agreements for those two hotels arising as a result of the merger of Marriott and Starwood. While the attempt to enjoin the merger ultimately failed, the underlying suit continued as a breach of contract claim, and plaintiffs seek, among other remedies, monetary damages relating to the alleged violations. We are evaluating alternatives for resolving the claims. We do not expect either proceeding to have a significant impact on our consolidated results of operations as they both relate to matters existing as of the Merger Date. Other Contingencies See a description of certain contingencies relating to the Starwood Combination in Footnote 2 “ Acquisitions and Dispositions .” |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table at the end of the 2017 first quarter and year-end 2016 : At Period End ($ in millions) March 31, 2017 December 31, 2016 Senior Notes: 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 597 597 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 348 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 347 347 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 396 396 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 447 446 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 344 344 Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 743 742 Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 742 742 Series S Notes, interest rate of 6.8%, face amount of $324, maturing May 15, 2018 342 346 Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 204 206 Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023 291 291 Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025 339 340 Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 293 293 Commercial paper 2,285 2,311 Credit Facility — — Capital lease obligations 173 173 Other 286 291 8,470 8,506 Less: Current portion of long-term debt (309 ) (309 ) $ 8,161 $ 8,197 We paid cash for interest, net of amounts capitalized, of $49 million in the 2017 first quarter and $23 million in the 2016 first quarter . We are party to a multicurrency revolving credit agreement (the “Credit Facility”) that provides for up to $ 4,000 million of aggregate effective borrowings. See the “Cash Requirements and Our Credit Facilities” caption later in this report in the “Liquidity and Capital Resources” section for further information on our Credit Facility and available borrowing capacity at March 31, 2017 . |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 December 31, 2016 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 267 $ 255 $ 245 $ 231 Total noncurrent financial assets $ 267 $ 255 $ 245 $ 231 Senior Notes $ (5,433 ) $ (5,453 ) $ (5,438 ) $ (5,394 ) Commercial paper (2,285 ) (2,285 ) (2,311 ) (2,311 ) Other long-term debt (275 ) (282 ) (280 ) (284 ) Total noncurrent financial liabilities $ (7,993 ) $ (8,020 ) $ (8,029 ) $ (7,989 ) See the “Fair Value Measurements” caption of Footnote 2 “Summary of Significant Accounting Policies” of our 2016 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' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Other Comprehensive (Loss) Income and Shareholders' Equity | OTHER COMPREHENSIVE (LOSS) INCOME AND SHAREHOLDERS' EQUITY The following tables detail the accumulated other comprehensive (loss) income activity for the 2017 first quarter and 2016 first quarter : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2016 $ (503 ) $ (5 ) $ 6 $ 5 $ (497 ) Other comprehensive income (loss) before reclassifications (1) 188 (2 ) (1 ) — 185 Amounts reclassified from accumulated other comprehensive loss — — — — — Net other comprehensive income (loss) 188 (2 ) (1 ) — 185 Balance at March 31, 2017 $ (315 ) $ (7 ) $ 5 $ 5 $ (312 ) ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ — $ (196 ) Other comprehensive income (loss) before reclassifications (1) 22 (5 ) 1 — 18 Amounts reclassified 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 ) (1) Other comprehensive income before reclassifications for foreign currency translation adjustments includes losses on intra-entity foreign currency transactions that are of a long-term investment nature of $16 million for the 2017 first quarter and $20 million for the 2016 first quarter . The following table details the changes in common shares outstanding and shareholders’ equity for the 2017 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 386.1 Balance at year-end 2016 $ 5,357 $ 5 $ 5,808 $ 6,501 $ (6,460 ) $ (497 ) — Net income 365 — — 365 — — — Other comprehensive income 185 — — — — 185 — Dividends ($0.30 per share) (116 ) — — (116 ) — — 1.6 Employee stock plan (48 ) — (97 ) — 49 — (6.7 ) Purchase of treasury stock (575 ) — — — (575 ) — 381.0 Balance at March 31, 2017 $ 5,168 $ 5 $ 5,711 $ 6,750 $ (6,986 ) $ (312 ) |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS We are a diversified global lodging company with operations in the following reportable business segments: • North American Full-Service , which includes our Luxury and Premium brands located in the United States and Canada; • North American Limited-Service , which includes our Select brands located in the United States and Canada; • Asia Pacific , which includes all brand tiers in our Asia Pacific region; and • Other International , which includes all brand tiers in our Europe, Middle East and Africa, and Caribbean and Latin America regions. Our North American Full-Service, North American Limited-Service, and Asia Pacific segments meet the applicable accounting criteria to be reportable segments. Our Europe, Middle East and Africa, and Caribbean and Latin America operating segments individually do not meet the criteria for separate disclosure as reportable segments, and accordingly we combined them into an “all other category” which we refer to as “Other 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, indirect general, administrative, and other expenses, or merger-related costs and charges. We assign gains and losses, equity in earnings or losses from our joint ventures, and direct general, administrative, and other expenses to each of our segments. “Other unallocated corporate” represents a portion of our revenues, general, administrative, and other expenses, merger-related costs and charges, 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 fees from vacation ownership licensing agreements, which we present in the “Franchise fees” caption of our Income Statements. Our President and Chief Executive Officer, who is 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, 2017 March 31, 2016 North American Full-Service $ 3,576 $ 2,321 North American Limited-Service 924 833 Asia Pacific 312 141 Other International 602 415 Total segment revenues 5,414 3,710 Other unallocated corporate 147 62 Total consolidated revenues $ 5,561 $ 3,772 Segment Profits Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 North American Full-Service $ 289 $ 185 North American Limited-Service 177 155 Asia Pacific 82 27 Other International 86 48 Total segment profits 634 415 Other unallocated corporate (86 ) (48 ) Interest expense, net of interest income (63 ) (41 ) Income taxes (120 ) (107 ) Net income $ 365 $ 219 Goodwill ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Goodwill Year-end 2016 balance: Goodwill $ 2,905 $ 1,558 $ 1,572 $ 1,617 $ 7,652 Accumulated impairment losses — (54 ) — — (54 ) 2,905 1,504 1,572 1,617 7,598 Adjustments (1) $ 51 $ 30 $ 33 $ 36 $ 150 Foreign currency translation 3 (1 ) 29 23 54 March 31, 2017 balance: Goodwill $ 2,959 $ 1,587 $ 1,634 $ 1,676 $ 7,856 Accumulated impairment losses — (54 ) — — (54 ) $ 2,959 $ 1,533 $ 1,634 $ 1,676 $ 7,802 (1) The table reflects adjustments to our preliminary estimate of goodwill from the Starwood Combination. Because we have not yet finalized the fair values of assets acquired and liabilities assumed, the assignment of goodwill to our reporting units may continue to change during the measurement period. See Footnote 2 “ Acquisitions and Dispositions ” for more information. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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 2014-09”) ASU 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 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 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 2014-09, and we are evaluating the available adoption methods. We are still assessing the potential impact that ASU 2014-09 will have on our financial statements and disclosures, but we believe that recognition of base management and franchise fees will remain unchanged, but there likely will be changes to our revenue recognition policies related to our loyalty programs and the following: • We expect to recognize franchise application and relicensing fees over the term of the franchise contract rather than at hotel opening. • We expect to present the amortization of contract acquisition costs paid to customers as a reduction of revenue rather than as an amortization expense. • We expect to recognize gains from the sale of real estate assets when control of the asset is transferred to the buyer, generally at the time the sale closes. Under current guidance, we defer gains on sales of real estate assets if we maintain substantial continuing involvement. We do not expect that this change will have a material impact on our Financial Statements, as we typically do not have transactions that require us to defer significant gains. Accounting Standards Update No. 2016-02 - “Leases” (“ASU 2016-02”) In February 2016, the FASB issued ASU 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 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 2016-02 will have on our financial statements and disclosures. Accounting Standards Update No. 2016-09 - “Stock Compensation” (“ASU 2016-09”) We adopted ASU 2016-09 in the 2017 first quarter, which involves several aspects of the accounting for share-based payments. The new guidance had the following impacts on our Financial Statements: • We now record excess tax benefits (or deficiencies) as income tax expense (or benefit) in our Income Statements. Previously, we recorded excess tax benefits (deficiencies) in additional paid-in-capital in our Balance Sheets. As required, we prospectively applied this amendment in our Income Statements, which resulted in a benefit of $43 million to our provision for income taxes, approximately $0.11 per diluted share, for the three months ended March 31, 2017 . • We now classify excess tax benefits (or deficiencies) along with other income taxes in operating activities in our Statements of Cash Flows. ASU 2016-09 allowed for this amendment to be applied either prospectively or retrospectively. For consistency with our application of ASU 2016-09 in our Income Statements, we applied this amendment prospectively in our Statements of Cash Flows. For the three months ended March 31, 2017 , operating activities in our Statements of Cash Flows includes $43 million from excess tax benefits. For the three months ended March 31, 2016, we classified $ 6 million of excess tax benefits as financing inflows. • We now classify cash paid to taxing authorities when we withhold shares for employee tax-withholding purposes as a financing activity. As required, we retrospectively applied this amendment in our Statements of Cash Flows, and accordingly we reclassified $ 61 million of cash outflows from operating activities to financing activities for the three months ended March 31, 2016 . Accounting Standards Update No. 2017-01 - “Clarifying the Definition of a Business” (“ASU 2017-01”) In January 2017, the FASB issued ASU 2017-01, clarifying the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. We prospectively adopted ASU 2017-01 in the 2017 first quarter, and as a result, we determined that our planned hotel disposition arising during the period did not meet the definition of a business, and therefore we did not assign any goodwill of the reporting unit to the carrying value of the asset. |
Earnings Per Share Dilutive Securities | We compute the effect of dilutive securities using the treasury stock method and average market prices during the period. |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Consideration Transferred | The following table presents the fair value of each class of consideration that we transferred in the Starwood Combination. (in millions, except per share amounts) Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares 134.4 Marriott common stock price as of Merger Date $ 68.44 Fair value of Marriott common stock issued in exchange for Starwood outstanding shares 9,198 Cash consideration to Starwood shareholders, net of cash acquired of $1,116 2,412 Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards 71 Total consideration transferred, net of cash acquired $ 11,681 The following table presents pre-tax merger-related costs and other charges that we incurred in connection with the Starwood Combination. Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 Merger-related costs and charges Transaction costs $ 7 $ 7 Employee termination costs 21 — Integration costs 23 1 51 8 Interest expense — 2 $ 51 $ 10 |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table presents our preliminary estimates of fair values of the assets that we acquired and the liabilities that we assumed on the Merger Date as previously reported at year-end 2016 and at the end of the 2017 first quarter . ($ in millions) September 23, 2016 December 31, 2016) Adjustments September 23, 2016 March 31, 2017) Working capital $ (180 ) $ (35 ) $ (215 ) Property and equipment, including assets held for sale 1,999 (99 ) 1,900 Identified intangible assets 7,957 (40 ) 7,917 Equity and cost method investments 579 — 579 Other noncurrent assets 224 (29 ) 195 Deferred income taxes, net (1,516 ) 92 (1,424 ) Guest loyalty program (1,631 ) (7 ) (1,638 ) Debt (1,871 ) — (1,871 ) Other noncurrent liabilities (654 ) (32 ) (686 ) Net assets acquired 4,907 (150 ) 4,757 Goodwill (1) 6,774 150 6,924 $ 11,681 $ — $ 11,681 (1) Goodwill primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined operations, and it is not deductible for tax purposes. See Footnote 11 “ Business Segments ” for our preliminary assignment of goodwill by reportable segment. |
Schedule of Fair Values of Identified Intangible Assets | The following table presents our preliminary estimates of the fair values of Starwood’s identified intangible assets and their related estimated useful lives. Estimated Fair Value ($ in millions) Estimated Useful Life (in years) Brands $ 6,452 indefinite Management agreements 672 10-25 Franchise agreements 744 10-80 Loyalty program marketing rights 49 30 $ 7,917 |
Merger-Related Costs and Char19
Merger-Related Costs and Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Type of Merger-Related Costs and Charges | The following table presents the fair value of each class of consideration that we transferred in the Starwood Combination. (in millions, except per share amounts) Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares 134.4 Marriott common stock price as of Merger Date $ 68.44 Fair value of Marriott common stock issued in exchange for Starwood outstanding shares 9,198 Cash consideration to Starwood shareholders, net of cash acquired of $1,116 2,412 Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards 71 Total consideration transferred, net of cash acquired $ 11,681 The following table presents pre-tax merger-related costs and other charges that we incurred in connection with the Starwood Combination. Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 Merger-related costs and charges Transaction costs $ 7 $ 7 Employee termination costs 21 — Integration costs 23 1 51 8 Interest expense — 2 $ 51 $ 10 |
Schedule of Restructuring Reserve Activity | The following table presents our restructuring reserve activity during the 2017 first quarter : ($ in millions) Employee termination costs Balance at year-end 2016 $ 192 Charges — Cash payments (39 ) Adjustments (1) 9 Balance at March 31, 2017, classified in “Accrued expenses and other” $ 162 (1) Adjustments primarily reflect the reversal of charges for certain employees who accepted other positions at the Company or resigned and the impact of cumulative translation adjustments. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 March 31, 2016 Computation of Basic Earnings Per Share Net income $ 365 $ 219 Shares for basic earnings per share 384.9 254.4 Basic earnings per share $ 0.95 $ 0.86 Computation of Diluted Earnings Per Share Net income $ 365 $ 219 Shares for basic earnings per share 384.9 254.4 Effect of dilutive securities Share-based compensation 5.1 4.5 Shares for diluted earnings per share 390.0 258.9 Diluted earnings per share $ 0.94 $ 0.85 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 2017 first quarter : Expected volatility 30.9 % Dividend yield 1.3 % Risk-free rate 2.4 % Expected term (in years) 7 - 9 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 156 $ 23 Operating profit 116 34 Other 8 2 Total guarantees where we are the primary obligor $ 280 $ 59 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table at the end of the 2017 first quarter and year-end 2016 : At Period End ($ in millions) March 31, 2017 December 31, 2016 Senior Notes: 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 597 597 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 348 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 347 347 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 396 396 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 447 446 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 344 344 Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 743 742 Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 742 742 Series S Notes, interest rate of 6.8%, face amount of $324, maturing May 15, 2018 342 346 Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 204 206 Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023 291 291 Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025 339 340 Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 293 293 Commercial paper 2,285 2,311 Credit Facility — — Capital lease obligations 173 173 Other 286 291 8,470 8,506 Less: Current portion of long-term debt (309 ) (309 ) $ 8,161 $ 8,197 |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2017 December 31, 2016 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 267 $ 255 $ 245 $ 231 Total noncurrent financial assets $ 267 $ 255 $ 245 $ 231 Senior Notes $ (5,433 ) $ (5,453 ) $ (5,438 ) $ (5,394 ) Commercial paper (2,285 ) (2,285 ) (2,311 ) (2,311 ) Other long-term debt (275 ) (282 ) (280 ) (284 ) Total noncurrent financial liabilities $ (7,993 ) $ (8,020 ) $ (8,029 ) $ (7,989 ) |
Other Comprehensive (Loss) In25
Other Comprehensive (Loss) Income and Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) Activity | The following tables detail the accumulated other comprehensive (loss) income activity for the 2017 first quarter and 2016 first quarter : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2016 $ (503 ) $ (5 ) $ 6 $ 5 $ (497 ) Other comprehensive income (loss) before reclassifications (1) 188 (2 ) (1 ) — 185 Amounts reclassified from accumulated other comprehensive loss — — — — — Net other comprehensive income (loss) 188 (2 ) (1 ) — 185 Balance at March 31, 2017 $ (315 ) $ (7 ) $ 5 $ 5 $ (312 ) ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ — $ (196 ) Other comprehensive income (loss) before reclassifications (1) 22 (5 ) 1 — 18 Amounts reclassified 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 ) (1) Other comprehensive income before reclassifications for foreign currency translation adjustments includes losses on intra-entity foreign currency transactions that are of a long-term investment nature of $16 million for the 2017 first quarter and $20 million for the 2016 first quarter . |
Changes in Shareholders' Equity (Deficit) | The following table details the changes in common shares outstanding and shareholders’ equity for the 2017 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 386.1 Balance at year-end 2016 $ 5,357 $ 5 $ 5,808 $ 6,501 $ (6,460 ) $ (497 ) — Net income 365 — — 365 — — — Other comprehensive income 185 — — — — 185 — Dividends ($0.30 per share) (116 ) — — (116 ) — — 1.6 Employee stock plan (48 ) — (97 ) — 49 — (6.7 ) Purchase of treasury stock (575 ) — — — (575 ) — 381.0 Balance at March 31, 2017 $ 5,168 $ 5 $ 5,711 $ 6,750 $ (6,986 ) $ (312 ) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Revenues | Segment Revenues Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 North American Full-Service $ 3,576 $ 2,321 North American Limited-Service 924 833 Asia Pacific 312 141 Other International 602 415 Total segment revenues 5,414 3,710 Other unallocated corporate 147 62 Total consolidated revenues $ 5,561 $ 3,772 |
Segment Profits | Segment Profits Three Months Ended ($ in millions) March 31, 2017 March 31, 2016 North American Full-Service $ 289 $ 185 North American Limited-Service 177 155 Asia Pacific 82 27 Other International 86 48 Total segment profits 634 415 Other unallocated corporate (86 ) (48 ) Interest expense, net of interest income (63 ) (41 ) Income taxes (120 ) (107 ) Net income $ 365 $ 219 |
Goodwill | Goodwill ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Goodwill Year-end 2016 balance: Goodwill $ 2,905 $ 1,558 $ 1,572 $ 1,617 $ 7,652 Accumulated impairment losses — (54 ) — — (54 ) 2,905 1,504 1,572 1,617 7,598 Adjustments (1) $ 51 $ 30 $ 33 $ 36 $ 150 Foreign currency translation 3 (1 ) 29 23 54 March 31, 2017 balance: Goodwill $ 2,959 $ 1,587 $ 1,634 $ 1,676 $ 7,856 Accumulated impairment losses — (54 ) — — (54 ) $ 2,959 $ 1,533 $ 1,634 $ 1,676 $ 7,802 (1) The table reflects adjustments to our preliminary estimate of goodwill from the Starwood Combination. Because we have not yet finalized the fair values of assets acquired and liabilities assumed, the assignment of goodwill to our reporting units may continue to change during the measurement period. See Footnote 2 “ Acquisitions and Dispositions ” for more information. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Owned, leased, and other revenue | $ 439 | $ 204 |
Franchise fees | 365 | 250 |
Provision for income taxes | $ (120) | $ (107) |
Earnings per share - diluted (in USD per share) | $ 0.94 | $ 0.85 |
Excess tax benefit classified as financing activity | $ 6 | |
Net cash provided by operating activities | $ 526 | 394 |
Net cash provided by (used in) financing activities | (830) | (327) |
Accounting Standards Update 2016-09 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Provision for income taxes | $ 43 | |
Earnings per share - diluted (in USD per share) | $ 0.11 | |
Net cash provided by operating activities | (61) | |
Net cash provided by (used in) financing activities | 61 | |
Reclassification | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Owned, leased, and other revenue | $ (60) | (43) |
Franchise fees | $ 60 | $ 43 |
Acquisitions and Dispositions-
Acquisitions and Dispositions- Starwood Consideration Transferred (Details) - Starwood Hotels & Resorts Worldwide, Inc. $ / shares in Units, shares in Millions, $ in Millions | Sep. 23, 2016USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares (in shares) | shares | 134.4 |
Marriott common stock price as of Merger Date (in USD per share) | $ / shares | $ 68.44 |
Fair value of Marriott common stock issued in exchange for Starwood outstanding shares | $ 9,198 |
Cash consideration to Starwood shareholders, net of cash acquired of $1,116 | 2,412 |
Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards | 71 |
Total consideration transferred, net of cash acquired | 11,681 |
Cash acquired | $ 1,116 |
Acquisitions and Dispositions29
Acquisitions and Dispositions- Starwood Allocation of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 23, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 7,802 | $ 7,598 | |
Starwood Hotels & Resorts Worldwide, Inc. | |||
Business Acquisition [Line Items] | |||
Working capital | $ (215) | ||
Working capital, Adjustments | (35) | ||
Property and equipment, including assets held for sale | 1,900 | ||
Property and equipment, including assets held for sale, Adjustments | (99) | ||
Identified intangible assets | 7,917 | ||
Identified intangible assets, Adjustments | (40) | ||
Equity and cost method investments | 579 | ||
Equity and cost method investments, Adjustments | 0 | ||
Other noncurrent assets | 195 | ||
Other noncurrent assets, Adjustments | (29) | ||
Deferred income taxes, net | (1,424) | ||
Deferred income taxes, net, Adjustments | 92 | ||
Guest loyalty program | (1,638) | ||
Guest loyalty program, Adjustments | (7) | ||
Debt | (1,871) | ||
Debt, Adjustments | 0 | ||
Other noncurrent liabilities | (686) | ||
Other noncurrent liabilities, Adjustments | (32) | ||
Net assets acquired | 4,757 | ||
Net assets acquired, Adjustments | (150) | ||
Goodwill | 6,924 | ||
Goodwill, Adjustments | 150 | ||
Fair value of assets acquired and liabilities assumed, net | 11,681 | ||
Fair value of assets acquired and liabilities assumed, net, Adjustments | 0 | ||
As Previously Reported | Starwood Hotels & Resorts Worldwide, Inc. | |||
Business Acquisition [Line Items] | |||
Working capital | (180) | ||
Property and equipment, including assets held for sale | 1,999 | ||
Identified intangible assets | 7,957 | ||
Equity and cost method investments | 579 | ||
Other noncurrent assets | 224 | ||
Deferred income taxes, net | (1,516) | ||
Guest loyalty program | (1,631) | ||
Debt | (1,871) | ||
Other noncurrent liabilities | (654) | ||
Net assets acquired | 4,907 | ||
Goodwill | 6,774 | ||
Fair value of assets acquired and liabilities assumed, net | $ 11,681 |
Acquisitions and Dispositions30
Acquisitions and Dispositions- Starwood Fair Value and Estimated Useful Lives of Identifiable Intangible Assets (Details) - Starwood Hotels & Resorts Worldwide, Inc. $ in Millions | Sep. 23, 2016USD ($) |
Business Acquisition [Line Items] | |
Identified intangible assets | $ 7,917 |
Management agreements | |
Business Acquisition [Line Items] | |
Estimated fair value, finite-lived intangible assets | 672 |
Franchise agreements | |
Business Acquisition [Line Items] | |
Estimated fair value, finite-lived intangible assets | 744 |
Loyalty program marketing rights | |
Business Acquisition [Line Items] | |
Estimated fair value, finite-lived intangible assets | $ 49 |
Estimated Useful Life (in years) | 30 years |
Brands | |
Business Acquisition [Line Items] | |
Estimated fair value, indefinite-lived intangible assets | $ 6,452 |
Minimum | Management agreements | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 10 years |
Minimum | Franchise agreements | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 10 years |
Maximum | Management agreements | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 25 years |
Maximum | Franchise agreements | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 80 years |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Dispositions and Planned Dispositions (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)hotel | Dec. 31, 2016USD ($) | |
Remaining Future Minimum Operating Lease Obligations Due | ||
Assets held for sale | $ 400 | $ 588 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | North American Full-Service Property | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash received from sale of property | 306 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Remaining Future Minimum Operating Lease Obligations Due | ||
Assets held for sale | 400 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | North American Full-Service Property | ||
Remaining Future Minimum Operating Lease Obligations Due | ||
2017 (remaining) | 3 | |
2,018 | 4 | |
2,019 | 4 | |
2,020 | 4 | |
2,021 | 4 | |
Thereafter | 175 | |
Total | $ 194 | |
Number of hotels held for sale | hotel | 2 |
Merger-Related Costs and Char32
Merger-Related Costs and Charges Merger-Related Costs and Charges- Types of Merger-related Costs and Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Merger-related costs and charges | ||
Transaction and integration costs | $ 51 | $ 8 |
Interest expense | 70 | 47 |
Starwood Hotels & Resorts Worldwide, Inc. | ||
Merger-related costs and charges | ||
Transaction costs | 7 | 7 |
Transaction and integration costs | 51 | 8 |
Interest expense | 0 | 2 |
Transaction, integration, and interest costs | 51 | 10 |
Employee termination costs | Starwood Hotels & Resorts Worldwide, Inc. | ||
Merger-related costs and charges | ||
Integration costs | 21 | 0 |
Integration costs | Starwood Hotels & Resorts Worldwide, Inc. | ||
Merger-related costs and charges | ||
Integration costs | $ 23 | $ 1 |
Merger-Related Costs and Char33
Merger-Related Costs and Charges Merger-Related Costs and Charges - Schedule of Restructuring Reserve Activity (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at year-end 2016 | $ 192 |
Charges | 0 |
Cash payments | (39) |
Adjustments | 9 |
Balance at March 31, 2017, classified in “Accrued expenses and other” | $ 162 |
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, 2017 | Mar. 31, 2016 | |
Computation of Basic Earnings Per Share | ||
Net income | $ 365 | $ 219 |
Shares for basic earnings per share (in shares) | 384.9 | 254.4 |
Basic earnings per share (in USD per share) | $ 0.95 | $ 0.86 |
Computation of Diluted Earnings Per Share | ||
Net income | $ 365 | $ 219 |
Shares for basic earnings per share (in shares) | 384.9 | 254.4 |
Effect of dilutive securities | ||
Effect of dilutive securities (in shares) | 5.1 | 4.5 |
Shares for diluted earnings per share (in shares) | 390 | 258.9 |
Diluted earnings per share (in USD per share) | $ 0.94 | $ 0.85 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Options and Stock Appreciation Rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities not included in the calculation of diluted earnings per share (in shares) | 0.2 | 0.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Valuation Allowance [Line Items] | ||
Effective income tax rate | 24.70% | 32.80% |
Provision for income taxes | $ (120) | $ (107) |
Cash paid for income taxes, net of refunds | 37 | $ 43 |
Accounting Standards Update 2016-09 | ||
Valuation Allowance [Line Items] | ||
Provision for income taxes | $ 43 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 48 | $ 28 | |
Deferred compensation costs related to unvested awards | $ 301 | $ 192 | |
RSUs and PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, weighted average grant-date fair value (in USD per share) | $ 83 | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted (in shares) | 1.6 | ||
Stock awards, vesting period | 4 years | ||
Stock awards, period of service after grant date | 1 year | ||
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted (in shares) | 0.2 | ||
Stock awards, vesting period | 3 years | ||
SARs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, granted (in shares) | 0.3 | ||
Stock awards, vesting period | 4 years | ||
Stock awards, expiration period | 10 years | ||
Stock awards, weighted average grant-date fair value (in USD per share) | $ 30 | ||
Stock awards, weighted average exercise price (in USD per share) | $ 88 |
Share Based Compensation - Assu
Share Based Compensation - Assumptions for SARs Granted (Details) - SARs | 3 Months Ended |
Mar. 31, 2017 | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected volatility | 30.90% |
Dividend yield | 1.30% |
Risk-free rate | 2.40% |
Minimum | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected term (in years) | 7 years |
Maximum | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |
Expected term (in years) | 9 years |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | $ 280 |
Recorded Liability for Guarantees | 59 |
Debt service | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 156 |
Recorded Liability for Guarantees | 23 |
Operating profit | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 116 |
Recorded Liability for Guarantees | 34 |
Other | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 8 |
Recorded Liability for Guarantees | $ 2 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Credit Facility | $ 0 | $ 0 |
Capital lease obligations | 173 | 173 |
Total debt | 8,470 | 8,506 |
Less: Current portion of long-term debt | (309) | (309) |
Long-term debt, noncurrent | 8,161 | 8,197 |
Series I Notes, interest rate of 6.4%, face amount of $293, maturing June 15, 2017 (effective interest rate of 6.5%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 293 | 293 |
Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 (effective interest rate of 4.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 597 | 597 |
Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 (effective interest rate of 3.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 348 | 348 |
Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 347 | 347 |
Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 (effective interest rate of 3.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 396 | 396 |
Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 (effective interest rate of 3.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 447 | 446 |
Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 (effective interest rate of 4.0%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 344 | 344 |
Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 (effective interest rate of 2.5%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 743 | 742 |
Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 (effective interest rate of 3.3%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 742 | 742 |
Series S Notes, interest rate of 6.8%, face amount of $324, maturing May 15, 2018 (effective interest rate of 1.7%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 342 | 346 |
Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 (effective interest rate of 2.3%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 204 | 206 |
Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023 (effective interest rate of 3.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 291 | 291 |
Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025 (effective interest rate of 2.8%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 339 | 340 |
Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 (effective interest rate of 4.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes | 293 | 293 |
Senior Notes | Series I Notes, interest rate of 6.4%, face amount of $293, maturing June 15, 2017 (effective interest rate of 6.5%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 293 | |
Interest rate | 6.40% | |
Effective interest rate | 6.50% | |
Senior Notes | Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 (effective interest rate of 4.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 600 | |
Interest rate | 3.00% | |
Effective interest rate | 4.40% | |
Senior Notes | Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 (effective interest rate of 3.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 350 | |
Interest rate | 3.30% | |
Effective interest rate | 3.40% | |
Senior Notes | Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 350 | |
Interest rate | 3.40% | |
Effective interest rate | 3.60% | |
Senior Notes | Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 (effective interest rate of 3.4%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 400 | |
Interest rate | 3.10% | |
Effective interest rate | 3.40% | |
Senior Notes | Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 (effective interest rate of 3.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 450 | |
Interest rate | 2.90% | |
Effective interest rate | 3.10% | |
Senior Notes | Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 (effective interest rate of 4.0%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 350 | |
Interest rate | 3.80% | |
Effective interest rate | 4.00% | |
Senior Notes | Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 (effective interest rate of 2.5%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 750 | |
Interest rate | 2.30% | |
Effective interest rate | 2.50% | |
Senior Notes | Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 (effective interest rate of 3.3%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 750 | |
Interest rate | 3.10% | |
Effective interest rate | 3.30% | |
Senior Notes | Series S Notes, interest rate of 6.8%, face amount of $324, maturing May 15, 2018 (effective interest rate of 1.7%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 324 | |
Interest rate | 6.80% | |
Effective interest rate | 1.70% | |
Senior Notes | Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 (effective interest rate of 2.3%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 181 | |
Interest rate | 7.20% | |
Effective interest rate | 2.30% | |
Senior Notes | Series U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023 (effective interest rate of 3.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 291 | |
Interest rate | 3.10% | |
Effective interest rate | 3.10% | |
Senior Notes | Series V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025 (effective interest rate of 2.8%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 318 | |
Interest rate | 3.80% | |
Effective interest rate | 2.80% | |
Senior Notes | Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 (effective interest rate of 4.1%) | ||
Debt Instrument [Line Items] | ||
Senior notes, face amount | $ 278 | |
Interest rate | 4.50% | |
Effective interest rate | 4.10% | |
Commercial paper | ||
Debt Instrument [Line Items] | ||
Commercial paper | $ 2,285 | 2,311 |
Other | ||
Debt Instrument [Line Items] | ||
Other | $ 286 | $ 291 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Interest paid, net of amounts capitalized | $ 49,000,000 | $ 23,000,000 |
Maximum borrowing capacity under credit facility | $ 4,000,000,000 |
Fair Value of Financial Instr42
Fair Value of Financial Instruments - Carrying Values and Fair Values of Non-Current Financial Assets and Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | $ 267 | $ 245 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 267 | 245 |
Total noncurrent financial assets | 267 | 245 |
Senior Notes | (5,433) | (5,438) |
Commercial paper | (2,285) | (2,311) |
Other long-term debt | (275) | (280) |
Total noncurrent financial liabilities | (7,993) | (8,029) |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 255 | 231 |
Total noncurrent financial assets | 255 | 231 |
Senior Notes | (5,453) | (5,394) |
Commercial paper | (2,285) | (2,311) |
Other long-term debt | (282) | (284) |
Total noncurrent financial liabilities | $ (8,020) | $ (7,989) |
Other Comprehensive (Loss) In43
Other Comprehensive (Loss) Income and Shareholders' Equity - Accumulated Other Comprehensive (Loss) Income Activity (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 5,357 | |
Other comprehensive income (loss) before reclassifications | 185 | $ 18 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 1 |
Total other comprehensive income, net of tax | 185 | 19 |
Balance at end of period | 5,168 | |
Other comprehensive income (loss) before reclassification related to foreign current translation adjustment, loss on intra-equity foreign currency transaction | 16 | 20 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (503) | (192) |
Other comprehensive income (loss) before reclassifications | 188 | 22 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Total other comprehensive income, net of tax | 188 | 22 |
Balance at end of period | (315) | (170) |
Derivative Instrument Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (5) | (8) |
Other comprehensive income (loss) before reclassifications | (2) | (5) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 1 |
Total other comprehensive income, net of tax | (2) | (4) |
Balance at end of period | (7) | (12) |
Available-For-Sale Securities Unrealized Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | 6 | 4 |
Other comprehensive income (loss) before reclassifications | (1) | 1 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Total other comprehensive income, net of tax | (1) | 1 |
Balance at end of period | 5 | 5 |
Pension and Postretirement Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | 5 | 0 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Total other comprehensive income, net of tax | 0 | 0 |
Balance at end of period | 5 | 0 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at beginning of period | (497) | (196) |
Total other comprehensive income, net of tax | 185 | |
Balance at end of period | $ (312) | $ (177) |
Other Comprehensive (Loss) In44
Other Comprehensive (Loss) Income and Shareholders' Equity - Changes in Shareholders' Equity (Deficit) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | $ 5,357 | |
Balance at beginning of period (in shares) | 386.1 | |
Net income | $ 365 | $ 219 |
Other comprehensive income | 185 | 19 |
Dividends ($0.30 per share) | (116) | |
Employee stock plan | $ (48) | |
Employee stock plan (in shares) | 1.6 | |
Purchase of treasury stock | $ (575) | |
Purchase of treasury stock (in shares) | (6.7) | |
Balance at end of period | $ 5,168 | |
Balance at end of period (in shares) | 381 | |
Cash dividends (in USD per share) | $ 0.30 | |
Class A Common Stock | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | $ 5 | |
Balance at end of period | 5 | |
Additional Paid-in- Capital | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | 5,808 | |
Employee stock plan | (97) | |
Balance at end of period | 5,711 | |
Retained Earnings | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | 6,501 | |
Net income | 365 | |
Dividends ($0.30 per share) | (116) | |
Balance at end of period | 6,750 | |
Treasury Stock, at Cost | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | (6,460) | |
Employee stock plan | 49 | |
Purchase of treasury stock | (575) | |
Balance at end of period | (6,986) | |
Accumulated Other Comprehensive Loss | ||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | ||
Balance at beginning of period | (497) | (196) |
Other comprehensive income | 185 | |
Balance at end of period | $ (312) | $ (177) |
Business Segments - Segment Rev
Business Segments - Segment Revenues (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 5,561 | $ 3,772 |
Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 5,414 | 3,710 |
Other unallocated corporate | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 147 | 62 |
North American Full-Service | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 3,576 | 2,321 |
North American Limited-Service | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 924 | 833 |
Asia Pacific | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 312 | 141 |
Other International | Total segment | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 602 | $ 415 |
Business Segments - Segment Pro
Business Segments - Segment Profits (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | $ 537 | $ 367 |
Interest expense, net of interest income | (63) | (41) |
Income taxes | (120) | (107) |
Net income | 365 | 219 |
Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | 634 | 415 |
Other unallocated corporate | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | (86) | (48) |
North American Full-Service | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | 289 | 185 |
North American Limited-Service | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | 177 | 155 |
Asia Pacific | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | 82 | 27 |
Other International | Total segment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment profits | $ 86 | $ 48 |
Business Segments - Schedule of
Business Segments - Schedule of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Goodwill, gross | $ 7,856 | $ 7,652 | |
Accumulated impairment losses | (54) | (54) | |
Goodwill | $ 7,598 | 7,802 | 7,598 |
Goodwill [Roll Forward] | |||
Goodwill | 7,598 | ||
Adjustments | 150 | ||
Foreign currency translation | 54 | ||
Goodwill | 7,802 | ||
North American Full-Service | |||
Segment Reporting Information [Line Items] | |||
Goodwill, gross | 2,959 | 2,905 | |
Accumulated impairment losses | 0 | 0 | |
Goodwill | 2,905 | 2,959 | 2,905 |
Goodwill [Roll Forward] | |||
Goodwill | 2,905 | ||
Adjustments | 51 | ||
Foreign currency translation | 3 | ||
Goodwill | 2,959 | ||
North American Limited-Service | |||
Segment Reporting Information [Line Items] | |||
Goodwill, gross | 1,587 | 1,558 | |
Accumulated impairment losses | (54) | (54) | |
Goodwill | 1,504 | 1,533 | 1,504 |
Goodwill [Roll Forward] | |||
Goodwill | 1,504 | ||
Adjustments | 30 | ||
Foreign currency translation | (1) | ||
Goodwill | 1,533 | ||
Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Goodwill, gross | 1,634 | 1,572 | |
Accumulated impairment losses | 0 | 0 | |
Goodwill | 1,572 | 1,634 | 1,572 |
Goodwill [Roll Forward] | |||
Goodwill | 1,572 | ||
Adjustments | 33 | ||
Foreign currency translation | 29 | ||
Goodwill | 1,634 | ||
Other International | |||
Segment Reporting Information [Line Items] | |||
Goodwill, gross | 1,676 | 1,617 | |
Accumulated impairment losses | 0 | 0 | |
Goodwill | 1,617 | $ 1,676 | $ 1,617 |
Goodwill [Roll Forward] | |||
Goodwill | 1,617 | ||
Adjustments | 36 | ||
Foreign currency translation | 23 | ||
Goodwill | $ 1,676 |