Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 341,130,300 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||
Revenues | $ 5,049 | $ 5,078 | $ 15,401 | $ 15,201 |
OPERATING COSTS AND EXPENSES | ||||
Depreciation, amortization, and other | 52 | 54 | 164 | 176 |
General, administrative, and other | 221 | 205 | 685 | 651 |
Merger-related costs and charges | 12 | 28 | 64 | 100 |
Costs and expenses | 4,479 | 4,288 | 13,591 | 13,121 |
OPERATING INCOME | 570 | 790 | 1,810 | 2,080 |
Gains and other income, net | 18 | 6 | 191 | 31 |
Interest expense | (86) | (73) | (246) | (216) |
Interest income | 5 | 9 | 16 | 24 |
Equity in earnings | 61 | 6 | 95 | 29 |
INCOME BEFORE INCOME TAXES | 568 | 738 | 1,866 | 1,948 |
Provision for income taxes | (85) | (253) | (375) | (603) |
NET INCOME | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
EARNINGS PER SHARE | ||||
Earnings per share - basic (in USD per share) | $ 1.39 | $ 1.30 | $ 4.23 | $ 3.55 |
Earnings per share - diluted (in USD per share) | 1.38 | 1.29 | 4.18 | 3.51 |
CASH DIVIDENDS DECLARED PER SHARE (in USD per share) | $ 0.41 | $ 0.33 | $ 1.15 | $ 0.96 |
Base management fees | ||||
REVENUES | ||||
Gross revenues | $ 279 | $ 269 | $ 852 | $ 818 |
Franchise fees | ||||
REVENUES | ||||
Gross revenues | 502 | 419 | 1,394 | 1,182 |
Incentive management fees | ||||
REVENUES | ||||
Gross revenues | 151 | 138 | 482 | 433 |
Fee revenues | ||||
REVENUES | ||||
Gross revenues | 932 | 826 | 2,728 | 2,433 |
Contract investment amortization | (13) | (11) | (44) | (34) |
Revenues | 919 | 815 | 2,684 | 2,399 |
Owned, leased, and other | ||||
REVENUES | ||||
Revenues | 397 | 433 | 1,226 | 1,309 |
OPERATING COSTS AND EXPENSES | ||||
Operating costs | 315 | 351 | 985 | 1,057 |
Reimbursements | ||||
REVENUES | ||||
Revenues | 3,733 | 3,830 | 11,491 | 11,493 |
OPERATING COSTS AND EXPENSES | ||||
Operating costs | $ 3,879 | $ 3,650 | $ 11,693 | $ 11,137 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (66) | 107 | (313) | 457 |
Derivative instrument adjustments, net of tax | (1) | (5) | 7 | (13) |
Unrealized gain (loss) on available-for-sale securities, net of tax | 0 | 1 | 0 | (1) |
Pension and postretirement adjustments, net of tax | 0 | 0 | 0 | 0 |
Reclassification of losses, net of tax | 2 | 4 | 18 | 5 |
Net other comprehensive (loss) income | (65) | 107 | (288) | 448 |
Comprehensive income | $ 418 | $ 592 | $ 1,203 | $ 1,793 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 373 | $ 383 |
Accounts and notes receivable, net | 2,175 | 1,973 |
Prepaid expenses and other | 242 | 235 |
Assets held for sale | 13 | 149 |
Assets, current, total | 2,803 | 2,740 |
Property and equipment, net | 1,967 | 1,793 |
Intangible assets | ||
Goodwill | 9,067 | 9,207 |
Goodwill and intangible assets, net, total | 17,470 | 17,751 |
Equity method investments | 689 | 734 |
Notes receivable, net | 122 | 142 |
Deferred tax assets | 171 | 93 |
Other noncurrent assets | 611 | 593 |
Total assets | 23,833 | 23,846 |
Current liabilities | ||
Current portion of long-term debt | 617 | 398 |
Accounts payable | 759 | 783 |
Accrued payroll and benefits | 1,253 | 1,214 |
Accrued expenses and other | 1,117 | 1,291 |
Liabilities, current, total | 6,051 | 5,807 |
Long-term debt | 8,710 | 7,840 |
Deferred tax liabilities | 551 | 605 |
Other noncurrent liabilities | 2,248 | 2,610 |
Shareholders’ equity | ||
Class A Common Stock | 5 | 5 |
Additional paid-in-capital | 5,773 | 5,770 |
Retained earnings | 8,705 | 7,242 |
Treasury stock, at cost | (11,850) | (9,418) |
Accumulated other comprehensive loss | (309) | (17) |
Stockholders' equity (deficit) attributable to parent | 2,324 | 3,582 |
Liabilities and equity (deficit), total | 23,833 | 23,846 |
Brands | ||
Intangible assets | ||
Intangible assets | 5,809 | 5,922 |
Contract acquisition costs and other | ||
Intangible assets | ||
Intangible assets | 2,594 | 2,622 |
Liability for guest loyalty program | ||
Current liabilities | ||
Liability for guest loyalty program | 2,305 | 2,121 |
Contract with customer | 3,317 | 2,819 |
Deferred revenue | ||
Current liabilities | ||
Contract with customer | $ 632 | $ 583 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net income | $ 1,491 | $ 1,345 |
Adjustments to reconcile to cash provided by operating activities: | ||
Depreciation, amortization, and other | 208 | 210 |
Share-based compensation | 140 | 139 |
Income taxes | (192) | 190 |
Contract acquisition costs | (110) | (126) |
Merger-related charges | (37) | (117) |
Working capital changes | (233) | (124) |
Gain on asset dispositions | (191) | (30) |
Other | 67 | 108 |
Net cash provided by (used in) operating activities | 1,824 | 1,751 |
INVESTING ACTIVITIES | ||
Capital expenditures | (462) | (155) |
Dispositions | 460 | 482 |
Loan advances | (13) | (85) |
Loan collections | 47 | 91 |
Other | 49 | (6) |
Net cash provided by investing activities | 81 | 327 |
FINANCING ACTIVITIES | ||
Commercial paper/Credit Facility, net | 1,045 | 480 |
Issuance of long-term debt | 443 | 1 |
Repayment of long-term debt | (391) | (305) |
Issuance of Class A Common Stock | 4 | 4 |
Dividends paid | (404) | (362) |
Purchase of treasury stock | (2,513) | (2,105) |
Share-based compensation withholding taxes | (105) | (144) |
Net cash provided by (used in) financing activities | (1,921) | (2,431) |
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (16) | (353) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 429 | 887 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | 413 | 534 |
Liability for guest loyalty program | ||
Adjustments to reconcile to cash provided by operating activities: | ||
Liability for guest loyalty program | $ 681 | $ 156 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Cash Flows [Abstract] | ||
Restricted Cash | $ 40 | $ 46 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 in our Caribbean and Latin America, Europe, and Middle East and Africa regions as “Other International,” and together with those in our Asia Pacific segment, 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, 2017 (“ 2017 Form 10-K”). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2017 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 September 30, 2018 and December 31, 2017 , the results of our operations for the three and nine months ended September 30, 2018 and September 30, 2017 , and cash flows for the nine months ended September 30, 2018 and September 30, 2017 . 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. The accompanying Financial Statements also reflect our adoption of several new accounting standards. See the “New Accounting Standards Adopted” caption below for additional information. New Accounting Standards Not Yet Adopted Accounting Standards Update (“ASU”) 2016-02 “Leases” (Topic 842). ASU 2016-02 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 most leases, including operating leases. 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. We will adopt the standard using the modified retrospective transition method as of January 1, 2019, and we will not apply the standard to the comparative periods presented in the year of adoption. We are still assessing the potential impact that ASU 2016-02 will have on our financial statements and disclosures, but we expect that we will recognize right-of-use lease assets and related lease liabilities for operating leases in the range of $ 1.0 billion to $ 1.2 billion , with no impact to our Income Statements or Statements of Cash Flows. Our estimate represents the net present value of lease payments from leases that we had entered into as of September 30, 2018, and that are scheduled to commence by January 1, 2019. The actual impact may differ from our estimate depending on our lease portfolio and discount rates on the adoption date. We do not expect any changes related to our current capital lease portfolio, which will be titled “finance leases” under ASU 2016-02. New Accounting Standards Adopted ASU 2016-18 “Restricted Cash” (Topic 230). ASU 2016-18 requires companies to include restricted cash with cash and cash equivalents when reconciling beginning and ending amounts shown on the statement of cash flows. We adopted ASU 2016-18 in the 2018 first quarter using the retrospective transition method, and accordingly, we revised prior period amounts, as shown in the “ Statements of Cash Flows ” table below. ASU 2016-16 “Accounting for Income Taxes: Intra-Entity Transfers of Assets Other than Inventory” (Topic 740). ASU 2016-16 requires companies to recognize the income tax effects of intercompany sales of assets other than inventory when the transfer occurs. We adopted ASU 2016-16 in the 2018 first quarter using the modified retrospective transition method and recorded an adjustment of $372 million for the cumulative effect to retained earnings at January 1, 2018. ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments” (Topic 230). ASU 2016-15 specifies how certain cash receipts and payments are to be classified in the statement of cash flows and primarily impacts our presentation of cash outflows for commercial paper. Under ASU 2016-15, we are required to attribute a portion of the payments to accreted interest and classify that portion as cash outflows for operating activities. We adopted ASU 2016-15 in the 2018 first quarter using the retrospective transition method, and accordingly, we revised prior period amounts, as shown in the “ Statements of Cash Flows ” table below. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (Topic 825). ASU 2016-01 eliminates the available-for-sale classification for equity investments and requires companies to measure equity investments at fair value and recognize any changes in the fair value in net income. We adopted ASU 2016-01 in the 2018 first quarter using the modified retrospective transition method and recorded a cumulative-effect adjustment of $4 million to retained earnings at January 1, 2018. ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606). ASU 2014-09 and several related ASUs (collectively referred to as “ASU 2014-09”) supersede the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance, and provide a principles-based, comprehensive framework in Topic 606, Revenue Recognition. ASU 2014-09 also specifies the accounting for certain costs to obtain or fulfill a contract with a customer and provides enhanced disclosure requirements. We adopted ASU 2014-09 in the 2018 first quarter using the full retrospective transition method. See Footnote 2. Revenues for disclosures required by ASU 2014-09, including our revenue recognition accounting policies. When we adopted ASU 2014-09, we applied the following expedients and exemptions, which are allowed by the standard, to our prior period Financial Statements and disclosures: • We used the transaction price at the date of contract completion for our contracts that had variable consideration and were completed before January 1, 2018. • We considered the aggregate effect of all contract modifications that occurred before January 1, 2016 when: (1) identifying satisfied and unsatisfied performance obligations; (2) determining the transaction price; and (3) allocating the transaction price to the satisfied and unsatisfied performance obligations. • We did not: (1) disclose the amount of the transaction price that we allocated to remaining performance obligations; or (2) include an explanation of when we expect to recognize the revenue allocated to remaining performance obligations. The cumulative effect of adopting ASU 2014-09 was a decrease in 2016 retained earnings of $264 million . The following tables present the effect of the adoption of ASUs 2014-09, 2016-15, and 2016-18 on our 2017 Financial Statements. Throughout this report, our 2017 financial results reflect the “As Adjusted” amounts shown in the tables below. Income Statements Three Months Ended Nine Months Ended ($ in millions, except per share amounts) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) REVENUES Base management fees $ 269 $ — $ 269 $ 818 $ — $ 818 Franchise fees 426 (7 ) 419 1,207 (25 ) 1,182 Incentive management fees 136 2 138 437 (4 ) 433 Gross fee revenues 831 (5 ) 826 2,462 (29 ) 2,433 Contract investment amortization — (11 ) (11 ) — (34 ) (34 ) Net fee revenues 831 (16 ) 815 2,462 (63 ) 2,399 Owned, leased, and other revenue 452 (19 ) 433 1,349 (40 ) 1,309 Cost reimbursement revenue 4,380 (550 ) 3,830 13,208 (1,715 ) 11,493 5,663 (585 ) 5,078 17,019 (1,818 ) 15,201 OPERATING COSTS AND EXPENSES Owned, leased, and other-direct 356 (5 ) 351 1,069 (12 ) 1,057 Depreciation, amortization, and other 68 (14 ) 54 218 (42 ) 176 General, administrative, and other 199 6 205 635 16 651 Merger-related costs and charges 28 — 28 100 — 100 Reimbursed expenses 4,380 (730 ) 3,650 13,208 (2,071 ) 11,137 5,031 (743 ) 4,288 15,230 (2,109 ) 13,121 OPERATING INCOME 632 158 790 1,789 291 2,080 Gains and other income, net 6 — 6 31 — 31 Interest expense (73 ) — (73 ) (216 ) — (216 ) Interest income 9 — 9 24 — 24 Equity in earnings 6 — 6 29 — 29 INCOME BEFORE INCOME TAXES 580 158 738 1,657 291 1,948 Provision for income taxes (188 ) (65 ) (253 ) (486 ) (117 ) (603 ) NET INCOME $ 392 $ 93 $ 485 $ 1,171 $ 174 $ 1,345 EARNINGS PER SHARE Earnings per share - basic $ 1.05 $ 0.25 $ 1.30 $ 3.09 $ 0.46 $ 3.55 Earnings per share - diluted $ 1.04 $ 0.25 $ 1.29 $ 3.06 $ 0.45 $ 3.51 Statements of Comprehensive Income Three Months Ended Nine Months Ended ($ in millions) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) Net income $ 392 $ 93 $ 485 $ 1,171 $ 174 $ 1,345 Other comprehensive income: Foreign currency translation adjustments 107 — 107 457 — 457 Derivative instrument adjustments, net of tax (5 ) — (5 ) (13 ) — (13 ) Unrealized gain (loss) on available-for-sale securities, net of tax 1 — 1 (1 ) — (1 ) Pension and postretirement adjustments, net of tax — — — — — — Reclassification of losses, net of tax 4 — 4 5 — 5 Total other comprehensive income, net of tax 107 — 107 448 — 448 Comprehensive income $ 499 $ 93 $ 592 $ 1,619 $ 174 $ 1,793 Balance Sheets ($ in millions) December 31, 2017 (As Previously Reported) (1) Adoption of ASU 2014-09 December 31, 2017 (As Adjusted) ASSETS Current assets Cash and equivalents $ 383 $ — $ 383 Accounts and notes receivable, net 1,999 (26 ) 1,973 Prepaid expenses and other 216 19 235 Assets held for sale 149 — 149 2,747 (7 ) 2,740 Property and equipment, net 1,793 — 1,793 Intangible assets Brands 5,922 — 5,922 Contract acquisition costs and other 2,884 (262 ) 2,622 Goodwill 9,207 — 9,207 18,013 (262 ) 17,751 Equity method investments 735 (1 ) 734 Notes receivable, net 142 — 142 Deferred tax assets 93 — 93 Other noncurrent assets 426 167 593 $ 23,949 $ (103 ) $ 23,846 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 398 $ — $ 398 Accounts payable 783 — 783 Accrued payroll and benefits 1,214 — 1,214 Liability for guest loyalty program 2,064 57 2,121 Accrued expenses and other 1,541 (250 ) 1,291 6,000 (193 ) 5,807 Long-term debt 7,840 — 7,840 Liability for guest loyalty program 2,876 (57 ) 2,819 Deferred tax liabilities 604 1 605 Deferred revenue 145 438 583 Other noncurrent liabilities 2,753 (143 ) 2,610 Shareholders' equity Class A Common Stock 5 — 5 Additional paid-in-capital 5,770 — 5,770 Retained earnings 7,391 (149 ) 7,242 Treasury stock, at cost (9,418 ) — (9,418 ) Accumulated other comprehensive loss (17 ) — (17 ) 3,731 (149 ) 3,582 $ 23,949 $ (103 ) $ 23,846 (1) Includes reclassifications among various captions, including Deferred revenue and Other noncurrent liabilities, to conform to current period presentation. Statements of Cash Flows Nine Months Ended Nine Months Ended ($ in millions) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 Adoption of ASUs 2016-18 and 2016-15 September 30, 2017 (As Adjusted) OPERATING ACTIVITIES Net income $ 1,171 $ 174 $ — $ 1,345 Adjustments to reconcile to cash provided by operating activities: Depreciation, amortization, and other 218 (8 ) — 210 Share-based compensation 139 — — 139 Income taxes 73 117 — 190 Liability for guest loyalty program 236 (80 ) — 156 Contract acquisition costs — (126 ) — (126 ) Merger-related charges (117 ) — — (117 ) Working capital changes 98 (219 ) (3 ) (124 ) Gain on asset dispositions (30 ) — — (30 ) Other 128 5 (25 ) 108 Net cash provided by (used in) operating activities 1,916 (137 ) (28 ) 1,751 INVESTING ACTIVITIES Capital expenditures (155 ) — — (155 ) Dispositions 482 — — 482 Loan advances (85 ) — — (85 ) Loan collections 91 — — 91 Contract acquisition costs (129 ) 129 — — Other (14 ) 8 — (6 ) Net cash provided by investing activities 190 137 — 327 FINANCING ACTIVITIES Commercial paper/Credit Facility, net 455 — 25 480 Issuance of long-term debt 1 — — 1 Repayment of long-term debt (305 ) — — (305 ) Issuance of Class A Common Stock 4 — — 4 Dividends paid (362 ) — — (362 ) Purchase of treasury stock (2,105 ) — — (2,105 ) Share-based compensation withholding taxes (144 ) — — (144 ) Net cash (used in) provided by financing activities (2,456 ) — 25 (2,431 ) (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (350 ) — (3 ) (353 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 858 — 29 887 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 508 $ — $ 26 $ 534 See Footnote 10. Accumulated Other Comprehensive Loss and Shareholders’ Equity for the impact of the adoption of new accounting standards on our shareholders’ equity. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | REVENUES Disaggregation of Revenues The following tables present our revenues disaggregated by major revenue stream for the three and nine months ended September 30, 2018 and September 30, 2017 . Three Months Ended September 30, 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 305 $ 246 $ 119 $ 135 $ 805 Contract investment amortization (7 ) (3 ) — (3 ) (13 ) Net fee revenues 298 243 119 132 792 Owned, leased, and other revenue 137 34 46 165 382 Cost reimbursement revenue 2,688 598 110 264 3,660 Total segment revenue $ 3,123 $ 875 $ 275 $ 561 $ 4,834 Unallocated corporate 215 Total revenue $ 5,049 Three Months Ended September 30, 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 285 $ 232 $ 106 $ 118 $ 741 Contract investment amortization (7 ) (2 ) — (2 ) (11 ) Net fee revenues 278 230 106 116 730 Owned, leased, and other revenue 157 37 48 179 421 Cost reimbursement revenue 2,661 596 109 296 3,662 Total segment revenue $ 3,096 $ 863 $ 263 $ 591 $ 4,813 Unallocated corporate 265 Total revenue $ 5,078 Nine Months Ended September 30, 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 949 $ 692 $ 346 $ 385 $ 2,372 Contract investment amortization (25 ) (9 ) (1 ) (9 ) (44 ) Net fee revenues 924 683 345 376 2,328 Owned, leased, and other revenue 432 104 141 501 1,178 Cost reimbursement revenue 8,422 1,737 332 818 11,309 Total segment revenue $ 9,778 $ 2,524 $ 818 $ 1,695 $ 14,815 Unallocated corporate 586 Total revenue $ 15,401 Nine Months Ended September 30, 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 891 $ 643 $ 301 $ 349 $ 2,184 Contract investment amortization (19 ) (8 ) (1 ) (6 ) (34 ) Net fee revenues 872 635 300 343 2,150 Owned, leased, and other revenue 535 100 138 503 1,276 Cost reimbursement revenue 8,206 1,705 318 845 11,074 Total segment revenue $ 9,613 $ 2,440 $ 756 $ 1,691 $ 14,500 Unallocated corporate 701 Total revenue $ 15,201 Performance Obligations For our managed hotels, we have performance obligations to provide hotel management services and a license to our hotel system intellectual property for the use of our brand names. As compensation for such services, we are generally entitled to receive base fees, which are a percentage of the revenues of hotels, and incentives fees, which are generally based on a measure of hotel profitability. Both the base and incentive management fees are variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract. We recognize base management fees on a monthly basis over the term of the agreement as those amounts become payable. We recognize incentive management fees on a monthly basis over the term of the agreement based on each property's financial results, as long as we do not expect a significant reversal due to projected future hotel performance or cash flows in future periods. For our franchised hotels, we have a performance obligation to provide franchisees and operators a license to our hotel system intellectual property for use of certain of our brand names. As compensation for such services, we are typically entitled to initial application fees and ongoing royalty fees. Our ongoing royalty fees represent variable consideration, as the transaction price is based on a percentage of certain revenues of the hotels, as defined in each contract. We recognize royalty fees on a monthly basis over the term of the agreement as those amounts become payable. Initial application and relicensing fees are fixed consideration payable upon submission of a franchise application or renewal and are recognized on a straight-line basis over the initial or renewal term of the franchise agreements. Under our management and franchise agreements, we are entitled to be reimbursed for certain costs we incur on behalf of the managed, franchised, and licensed properties, with no added mark-up. These costs primarily consist of payroll and related expenses at managed properties where we are the employer of the employees at the properties, and include certain operational and administrative costs as provided for in our contracts with the owners. We are entitled to reimbursement in the period we incur the related reimbursable costs, which we recognize within the “ Cost reimbursement revenue ” caption of our Income Statements. Under our management and franchise agreements, hotel owners and franchisees participate in certain centralized programs and services, such as marketing, sales, reservations, and insurance programs. We operate these programs and services for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. The amounts we charge for these programs and services are generally based on sales or other variable metrics and are payable on a monthly basis. We recognize revenue within the “ Cost reimbursement revenue ” caption of our Income Statements when the amounts may be billed to hotel owners, and we recognize expenses within the “Reimbursed expenses” caption as they are incurred. This pattern of recognition results in temporary timing differences between the costs incurred for centralized programs and services and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. In addition, proceeds from the sale of our interest in Avendra that we expend for the benefit of our hotel owners are included in “Reimbursed expenses.” We provide hotel design and construction review quality assurance (“Global Design”) services to our managed and franchised hotel owners, generally during the period prior to a hotel’s opening or during the period a hotel is converting to a Marriott brand (the “pre-opening period”). As compensation for such services, we may be entitled to receive a one-time fixed fee that is payable during the pre-opening period of the hotel. As these services are not a distinct performance obligation, we recognize the fees on a straight-line basis over the initial term of the management or franchise agreement within the “ Owned, leased, and other revenue ” caption of our Income Statements. At our owned and leased hotels, we have performance obligations to provide accommodations and other ancillary services to hotel guests. As compensation for such goods and services, we are typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased. These fees are generally payable at the time the hotel guest checks out of the hotel. We generally satisfy the performance obligations over time, and we recognize the revenue from room sales and from other ancillary guest services on a daily basis, as the rooms are occupied and we have rendered the services. Under our Loyalty Program , we have a performance obligation to provide or arrange for the provision of goods or services for free or at a discount to Loyalty Program members in exchange for the redemption of points earned from past activities. We operate our Loyalty Program as a cross-brand marketing program to participating properties. Our management and franchise agreements require that properties reimburse us for a portion of the costs of operating the Loyalty Program , including costs for marketing, promotion, communication with, and performing member services for Loyalty Program members, with no added mark-up. We receive contributions on a monthly basis from managed, franchised, owned, and leased hotels based on a portion of qualified spend by Loyalty Program members. We recognize these contributions into revenue as the points are redeemed and we provide the related service. The amount of revenue we recognize upon point redemption is impacted by our estimate of the “breakage” for points that members will never redeem. We estimate such amounts based on our historical experience and expectations of future member behavior. We recognize revenue net of the redemption cost within our “ Cost reimbursement revenue ” caption of our Income Statements, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the managed or franchised property or program partner. We recognize all other Loyalty Program costs as incurred in our “Reimbursed expenses” caption. We have multi-year agreements for our co-brand credit cards associated with our Loyalty Program . Under these agreements, we have performance obligations to provide a license to the intellectual property associated with our brands and marketing lists (“Licensed IP”) to the financial institutions that issue the credit cards, to arrange for the redemption of Loyalty Program points as discussed in the preceding paragraph, and to provide free night certificates to cardholders. We receive fees from these agreements, including fixed amounts that are primarily payable at contract inception, and variable amounts that are paid to us monthly over the term of the agreements, based on: (1) the number of free night certificates issued and redeemed; (2) the number of Loyalty Program points purchased; and (3) the volume of cardholder spend. We allocate those fees among the performance obligations, including the Licensed IP, our Loyalty Program points, and free night certificates provided to cardholders based on their estimated standalone selling prices. The estimation of the standalone selling prices requires significant judgments based upon generally accepted valuation methodologies regarding the value of our Licensed IP, the amount of funding we will receive, and the number of Loyalty Program points and free night certificates we will issue over the term of the agreements. We base our estimates of these amounts on our historical experience and expectation of future cardholder behavior. We recognize the portion of the Licensed IP revenue that meets the sales-based royalty criteria as the credit cards are used and the remaining portion of the Licensed IP revenue on a straight-line basis over the contract term. In our Income Statements, we primarily recognize Licensed IP revenue in the “Franchise fees” caption, and we recognize a portion in the “Cost reimbursement revenue” caption. We recognize the revenue related to the Loyalty Program points as discussed in the preceding paragraph. We recognize the revenue related to the free night certificates when the related service is provided. If the free night certificate redemption involves a managed or franchised property, we recognize revenue net of the redemption cost, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the managed or franchised property. Contract Balances We generally receive payments from customers as we satisfy our performance obligations. We record a receivable when we have an unconditional right to receive payment and only the passage of time is required before payment is due. We record deferred revenue when we receive payment, or have the unconditional right to receive payment, in advance of the satisfaction of our performance obligations related to franchise application and relicensing fees, Global Design fees, credit card branding license fees, and our Loyalty Program . Current and noncurrent deferred revenue increased by $81 million , to $766 million at September 30, 2018 from $685 million at December 31, 2017 , primarily as a result of our application and relicensing and co-brand credit card activities described above in the “Performance Obligations” caption. Our current and noncurrent Loyalty Program liability increased by $682 million , to $5,622 million at September 30, 2018 from $4,940 million at December 31, 2017 , primarily reflecting an increase in points earned, partially offset by deferred revenue of $1,315 million that we recognized during the first three quarters of 2018 . Costs incurred to obtain and fulfill contracts with customers We incur certain costs to obtain and fulfill contracts with customers, which we capitalize and amortize on a straight-line basis over the initial, non-cancellable term of the contract. We classify incremental costs of obtaining a contract with a customer in the “ Contract acquisition costs and other ” caption of our Balance Sheets, the related amortization in the “ Contract investment amortization ” caption of our Income Statements, and the cash flow impact in the “ Contract acquisition costs ” caption of our Statements of Cash Flows. We classify certain direct costs to fulfill a contract with a customer in the “ Other noncurrent assets ” caption of our Balance Sheets, and the related amortization in the “ Owned, leased, and other-direct ” caption of our Income Statements. We had capitalized costs to fulfill contracts with customers of $313 million at September 30, 2018 and $295 million at December 31, 2017 . Practical Expedients and Exemptions We do not disclose the amount of variable consideration that we expect to recognize in future periods in the following circumstances: (1) if we recognize the revenue based on the amount invoiced for services performed; (2) for sales-based or usage-based royalty promised in exchange for a license of intellectual property; or (3) if the consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation, and the terms of the consideration relate specifically to our efforts to transfer, or to a specific outcome from transferring the service. We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We do not include these taxes in determining the transaction price. |
Acquisitions and Dipositions
Acquisitions and Dipositions | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Acquisitions and Dipositions | ACQUISITIONS AND DISPOSITIONS Acquisitions In the 2018 second quarter, we purchased the Sheraton Grand Phoenix, a North American Full-Service property that we manage, for $255 million . Dispositions In the 2018 third quarter, an equity method investee sold the JW Marriott Mexico City, and we recorded our share of the gain, $55 million , in the “ Equity in earnings ” caption of our Income Statements. In the 2018 second quarter, we sold two North American Full-Service properties — The Tremont Chicago Hotel at Magnificent Mile and Le Centre Sheraton Montreal Hotel — and two Asia Pacific properties — The Westin Denarau Island Resort and The Sheraton Fiji Resort. We recognized total gains of $79 million in the “Gains and other income, net” caption of our Income Statements in the 2018 first three quarters . In the 2018 second quarter, we sold our interest in three equity method investments, whose assets included a plot of land in Italy, the W Hotel Mexico City, and the Royal Orchid Sheraton Hotel & Towers in Bangkok, and we recognized total gains of $42 million in the “Gains and other income, net” caption of our Income Statements. Also in the 2018 second quarter, an equity method investee sold The Ritz-Carlton Toronto, and we recorded our share of the gain, $10 million , in the “ Equity in earnings ” caption of our Income Statements. In the 2018 first quarter, we sold two Caribbean and Latin America properties — The Sheraton Buenos Aires Hotel & Convention Center and Park Tower, A Luxury Collection Hotel, Buenos Aires. We recognized total gains of $53 million in the “Gains and other income, net” caption of our Income Statements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
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 Nine Months Ended (in millions, except per share amounts) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Computation of Basic Earnings Per Share Net income $ 483 $ 485 $ 1,491 $ 1,345 Shares for basic earnings per share 346.7 372.3 352.8 378.5 Basic earnings per share $ 1.39 $ 1.30 $ 4.23 $ 3.55 Computation of Diluted Earnings Per Share Net income $ 483 $ 485 $ 1,491 $ 1,345 Shares for basic earnings per share 346.7 372.3 352.8 378.5 Effect of dilutive securities Share-based compensation 3.9 4.3 4.3 4.7 Shares for diluted earnings per share 350.6 376.6 357.1 383.2 Diluted earnings per share $ 1.38 $ 1.29 $ 4.18 $ 3.51 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION We recorded share-based compensation expense of $47 million in the 2018 third quarter , $44 million in the 2017 third quarter , $140 million in the 2018 first three quarters , and $139 million in the 2017 first three quarters . Deferred compensation costs for unvested awards totaled $219 million at September 30, 2018 and $168 million at December 31, 2017 . RSUs and PSUs We granted 1.4 million restricted stock units (“RSUs”) during the 2018 first three quarters 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 also granted 0.1 million performance-based RSUs (“PSUs”) in the 2018 first three quarters to certain executive officers, which are earned, subject to continued employment and the satisfaction of certain performance conditions based on achievement of pre-established targets for 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 2018 first three quarters had a weighted average grant-date fair value of $133 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective tax rate decreased to 14.9 percent for the 2018 third quarter from 34.3 percent for the 2017 third quarter , primarily due to the reduction of the U.S. federal tax rate under the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), increased earnings in jurisdictions with lower tax rates, tax benefits from dispositions, and adjustments resulting from finalizing prior years’ returns. The decrease was partially offset by the current period’s provisional estimate of tax for global intangible low-taxed income (“GILTI”) under the 2017 Tax Act. Our effective tax rate decreased to 20.1 percent for the 2018 first three quarters from 31.0 percent for the 2017 first three quarters , primarily due to the reduction of the U.S. federal tax rate under the 2017 Tax Act, increased earnings in jurisdictions with lower tax rates, and the release of tax reserves due to the completion of certain examinations. The decrease was partially offset by tax expense incurred for uncertain tax positions relating to legacy-Starwood operations, the current period’s provisional estimate of tax for GILTI under the 2017 Tax Act, increased state income tax due to a change in our position regarding the future remittance of a portion of the accumulated earnings of non-U.S. subsidiaries, the 2017 release of a tax reserve due to the favorable settlement of a tax position, and net tax expense on dispositions. We paid cash for income taxes, net of refunds, of $567 million in the 2018 first three quarters and $413 million in the 2017 first three quarters , an increase of $154 million primarily due to taxes paid for the 2017 gain on sale of our interest in Avendra. Tax Cuts and Jobs Act of 2017 Although we have not completed our accounting for the effects of the 2017 Tax Act, we have where possible made reasonable estimates of the 2017 Tax Act’s effects on our existing deferred tax balances and the Transition Tax, as described below. In cases where we have not been able to make reasonable estimates of the impact of the 2017 Tax Act, as described below, we continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately before enactment of the 2017 Tax Act. In all cases, we will continue to refine our calculations as we complete additional analyses on the application of the law. As we complete our analysis, collect and prepare necessary data, and interpret any additional regulatory guidance, we may adjust the provisional amounts that we have recorded during a measurement period of up to one year from the enactment of the 2017 Tax Act that could materially impact our provision for income taxes, which could in turn materially affect our tax obligations and effective tax rate, in the periods in which we make such adjustments. Reduction of U.S. federal corporate tax rate . The 2017 Tax Act reduced the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. In 2017, we made a reasonable estimate of the net impact of the corporate tax rate reduction on our deferred tax assets and liabilities, which did not materially change in the 2018 first three quarters . However, our estimate could change as we complete our analyses of all impacts of the 2017 Tax Act, including, but not limited to, the state tax effect of adjustments made to federal temporary differences. Deemed Repatriation Transition Tax . The Transition Tax is a new one-time tax on previously untaxed earnings and profits (“E&P”) of certain of our foreign subsidiaries accumulated post-1986 through year-end 2017. In addition to U.S. federal income taxes, the deemed repatriation of such E&P may result in additional state income taxes in some of the U.S. states in which we operate. In the 2018 first three quarters , we reduced our Transition Tax provisional estimate and recorded a benefit of $5 million , resulting in a net provisional estimated federal and state Transition Tax of $740 million . This adjustment resulted from changes to E&P as a result of completing an IRS audit. Our total Transition Tax estimate could continue to change as we finalize our analysis of untaxed post-1986 E&P, amounts held in cash or other specified assets, and as audits of federal income taxes are completed. The 2017 Tax Act does not provide for additional income taxes for any remaining undistributed foreign earnings not subject to the Transition Tax, or for any additional outside basis differences inherent in foreign entities, as these amounts continue to be indefinitely reinvested in those foreign operations. Substantially all our unremitted foreign earnings that have not been previously taxed have now been subjected to U.S. taxation under the Transition Tax. In the 2018 first three quarters , we recorded a state tax expense of $27 million relating to our plan to remit a portion of the accumulated earnings of non-U.S. subsidiaries in the future. This estimate could change as we complete additional analyses of the impacts of the 2017 Tax Act. State net operating losses and valuation allowances . We must assess whether our state net operating loss valuation allowances are affected by various aspects of the 2017 Tax Act. As discussed above, we have recorded provisional amounts related to state income taxes for certain portions of the 2017 Tax Act, but we have not completed our analysis for the states where we have net operating loss carryovers and valuation allowances. Because we have not yet completed our determination of the need for, or any change in, any valuation allowance, we have not yet recorded any change to valuation allowances. Other provisions . The 2017 Tax Act also included a new provision designed to tax GILTI. Under GAAP, we are required to make an accounting policy election to either (1) treat any taxes on GILTI inclusions as a current-period expense when incurred (the “period cost method”) or (2) factor such amounts into our measurement of our deferred taxes (the “deferred method”). We adopted the period cost method and recorded a current provision for GILTI tax related to current-year operations in our estimated annual effective tax rate. This estimate could change as we complete additional analysis of the impacts of the 2017 Tax Act. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at September 30, 2018 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 129 $ 18 Operating profit 219 109 Other 9 2 $ 357 $ 129 Contingent Purchase Obligation Sheraton Grand Chicago . We granted the owner a one-time right, exercisable in 2022, to require us to purchase the leasehold interest in the land and the hotel for $300 million in cash (the “put option”). If the owner exercises the put option, we have the option to purchase, at the same time the put transaction closes, the underlying fee simple interest in the land for an additional $200 million in cash. We accounted for the put option as a guarantee, and our recorded liability at September 30, 2018 was $57 million . |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table at the end of the 2018 third quarter and year-end 2017 : At Period End ($ in millions) September 30, December 31, Senior Notes: Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 $ 599 $ 598 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 349 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 348 348 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 397 397 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 448 447 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 345 345 Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 745 744 Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 743 743 Series S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018 — 330 Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 190 197 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 335 337 Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 292 292 Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) 443 — Commercial paper 3,419 2,371 Credit Facility — — Capital lease obligations 167 171 Other 216 279 $ 9,327 $ 8,238 Less: Current portion of long-term debt (617 ) (398 ) $ 8,710 $ 7,840 We paid cash for interest, net of amounts capitalized, of $204 million in the 2018 first three quarters and $171 million in the 2017 first three quarters . We are party to a multicurrency revolving credit agreement (the “Credit Facility”) that provides for up to $4 billion of aggregate effective borrowings to support our commercial paper program and general corporate needs, including working capital, capital expenditures, share repurchases, letters of credit, and acquisitions. Borrowings under the Credit Facility generally bear interest at LIBOR (the London Interbank Offered Rate) plus a spread, based on our public debt rating. We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating. While any outstanding commercial paper borrowings and/or borrowings under our Credit Facility generally have short-term maturities, we classify the outstanding borrowings as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis. The Credit Facility expires on June 10, 2021. See the “ Cash Requirements and Our Credit Facility ” caption later in this report in the “Liquidity and Capital Resources” section of Item 2 below for further information on our Credit Facility and available borrowing capacity at September 30, 2018 . In the 2018 second quarter, we issued $450 million aggregate principal amount of 4.000 percent Series X Notes due April 15, 2028 (the “Series X Notes”). We will pay interest on the Series X Notes on April 15 and October 15 of each year, commencing on October 15, 2018. We received net proceeds of approximately $443 million from the offering of the Series X Notes, after deducting the underwriting discount and estimated expenses, which were made available for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases, or repayment of outstanding commercial paper or other borrowings. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments, determined under current guidance for disclosures on the fair value of financial instruments, in the following table: September 30, 2018 December 31, 2017 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 122 $ 112 $ 142 $ 130 Total noncurrent financial assets $ 122 $ 112 $ 142 $ 130 Senior Notes $ (4,926 ) $ (4,814 ) $ (5,087 ) $ (5,126 ) Commercial paper (3,419 ) (3,419 ) (2,371 ) (2,371 ) Other long-term debt (204 ) (204 ) (217 ) (221 ) Other noncurrent liabilities (158 ) (158 ) (178 ) (178 ) Total noncurrent financial liabilities $ (8,707 ) $ (8,595 ) $ (7,853 ) $ (7,896 ) See the “Fair Value Measurements” caption of Footnote 2. Summary of Significant Accounting Policies of our 2017 Form 10-K for more information on the input levels we use in determining fair value. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss and Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss and Shareholders' Equity | ACCUMULATED OTHER COMPREHENSIVE LOSS AND SHAREHOLDERS’ EQUITY The following tables detail the accumulated other comprehensive loss activity for the 2018 first three quarters and 2017 first three quarters : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2017 $ (23 ) $ (10 ) $ 4 $ 12 $ (17 ) Other comprehensive (loss) income before reclassifications (1) (313 ) 7 — — (306 ) Amounts reclassified from accumulated other comprehensive loss 10 8 — — 18 Net other comprehensive (loss) income (303 ) 15 — — (288 ) Adoption of ASU 2016-01 — — (4 ) — (4 ) Balance at September 30, 2018 $ (326 ) $ 5 $ — $ 12 $ (309 ) ($ 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) 457 (13 ) (1 ) — 443 Amounts reclassified from accumulated other comprehensive loss — 5 — — 5 Net other comprehensive income (loss) 457 (8 ) (1 ) — 448 Balance at September 30, 2017 $ (46 ) $ (13 ) $ 5 $ 5 $ (49 ) (1) Other comprehensive (loss) income before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in a gain of $27 million for the 2018 first three quarters and loss of $142 million for the 2017 first three quarters . The following table details the changes in common shares outstanding and shareholders’ equity for the 2018 first three quarters : (in millions, except per share amounts) Common Shares Outstanding Total Class A Common Stock Additional Paid-in- Capital Retained Earnings Treasury Stock, at Cost Accumulated Other Comprehensive Loss 359.1 Balance at year-end 2017 (as previously reported) $ 3,731 $ 5 $ 5,770 $ 7,391 $ (9,418 ) $ (17 ) — Adoption of ASU 2014-09 (149 ) — — (149 ) — — 359.1 Balance at year-end 2017 (as adjusted) 3,582 5 5,770 7,242 (9,418 ) (17 ) — Adoption of ASU 2016-01 — — — 4 — (4 ) — Adoption of ASU 2016-16 372 — — 372 — — — Net income 1,491 — — 1,491 — — — Other comprehensive loss (288 ) — — — — (288 ) — Dividends ($1.15 per share) (404 ) — — (404 ) — — 1.4 Share-based compensation plans 44 — 3 — 41 — (18.5 ) Purchase of treasury stock (2,473 ) — — — (2,473 ) — 342.0 Balance at September 30, 2018 $ 2,324 $ 5 $ 5,773 $ 8,705 $ (11,850 ) $ (309 ) |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2018 | |
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 U.S. and Canada; • North American Limited-Service , which includes our Select brands located in the U.S. and Canada; and • Asia Pacific , which includes all brand tiers in our Asia Pacific region. The following operating segments do not meet the applicable accounting criteria for separate disclosure as reportable business segments: Caribbean and Latin America, Europe, and Middle East and Africa. We present these operating segments together as “ Other International ” in the tables below. 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, including license fees we receive from our credit card programs and fees from vacation ownership licensing agreements, 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. Beginning in the 2018 first quarter, “Other unallocated corporate” also includes revenues and expenses for our Loyalty Program , and we reflected this change in the prior period amounts shown in the tables below. 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 Nine Months Ended ($ in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 North American Full-Service $ 3,123 $ 3,096 $ 9,778 $ 9,613 North American Limited-Service 875 863 2,524 2,440 Asia Pacific 275 263 818 756 Other International 561 591 1,695 1,691 Total segment revenues 4,834 4,813 14,815 14,500 Other unallocated corporate 215 265 586 701 Total consolidated revenues $ 5,049 $ 5,078 $ 15,401 $ 15,201 Segment Profits Three Months Ended Nine Months Ended ($ in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 North American Full-Service $ 248 $ 295 $ 919 $ 972 North American Limited-Service 206 255 640 685 Asia Pacific 106 93 358 260 Other International 176 140 495 371 Total segment profits 736 783 2,412 2,288 Other unallocated corporate (87 ) 18 (316 ) (149 ) Interest expense, net of interest income (81 ) (63 ) (230 ) (191 ) Income taxes (85 ) (253 ) (375 ) (603 ) Net income $ 483 $ 485 $ 1,491 $ 1,345 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Standards | New Accounting Standards Not Yet Adopted Accounting Standards Update (“ASU”) 2016-02 “Leases” (Topic 842). ASU 2016-02 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 most leases, including operating leases. 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. We will adopt the standard using the modified retrospective transition method as of January 1, 2019, and we will not apply the standard to the comparative periods presented in the year of adoption. We are still assessing the potential impact that ASU 2016-02 will have on our financial statements and disclosures, but we expect that we will recognize right-of-use lease assets and related lease liabilities for operating leases in the range of $ 1.0 billion to $ 1.2 billion , with no impact to our Income Statements or Statements of Cash Flows. Our estimate represents the net present value of lease payments from leases that we had entered into as of September 30, 2018, and that are scheduled to commence by January 1, 2019. The actual impact may differ from our estimate depending on our lease portfolio and discount rates on the adoption date. We do not expect any changes related to our current capital lease portfolio, which will be titled “finance leases” under ASU 2016-02. New Accounting Standards Adopted ASU 2016-18 “Restricted Cash” (Topic 230). ASU 2016-18 requires companies to include restricted cash with cash and cash equivalents when reconciling beginning and ending amounts shown on the statement of cash flows. We adopted ASU 2016-18 in the 2018 first quarter using the retrospective transition method, and accordingly, we revised prior period amounts, as shown in the “ Statements of Cash Flows ” table below. ASU 2016-16 “Accounting for Income Taxes: Intra-Entity Transfers of Assets Other than Inventory” (Topic 740). ASU 2016-16 requires companies to recognize the income tax effects of intercompany sales of assets other than inventory when the transfer occurs. We adopted ASU 2016-16 in the 2018 first quarter using the modified retrospective transition method and recorded an adjustment of $372 million for the cumulative effect to retained earnings at January 1, 2018. ASU 2016-15 “Classification of Certain Cash Receipts and Cash Payments” (Topic 230). ASU 2016-15 specifies how certain cash receipts and payments are to be classified in the statement of cash flows and primarily impacts our presentation of cash outflows for commercial paper. Under ASU 2016-15, we are required to attribute a portion of the payments to accreted interest and classify that portion as cash outflows for operating activities. We adopted ASU 2016-15 in the 2018 first quarter using the retrospective transition method, and accordingly, we revised prior period amounts, as shown in the “ Statements of Cash Flows ” table below. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (Topic 825). ASU 2016-01 eliminates the available-for-sale classification for equity investments and requires companies to measure equity investments at fair value and recognize any changes in the fair value in net income. We adopted ASU 2016-01 in the 2018 first quarter using the modified retrospective transition method and recorded a cumulative-effect adjustment of $4 million to retained earnings at January 1, 2018. ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606). ASU 2014-09 and several related ASUs (collectively referred to as “ASU 2014-09”) supersede the revenue recognition requirements in Topic 605, Revenue Recognition , as well as most industry-specific guidance, and provide a principles-based, comprehensive framework in Topic 606, Revenue Recognition. ASU 2014-09 also specifies the accounting for certain costs to obtain or fulfill a contract with a customer and provides enhanced disclosure requirements. We adopted ASU 2014-09 in the 2018 first quarter using the full retrospective transition method. See Footnote 2. Revenues for disclosures required by ASU 2014-09, including our revenue recognition accounting policies. When we adopted ASU 2014-09, we applied the following expedients and exemptions, which are allowed by the standard, to our prior period Financial Statements and disclosures: • We used the transaction price at the date of contract completion for our contracts that had variable consideration and were completed before January 1, 2018. • We considered the aggregate effect of all contract modifications that occurred before January 1, 2016 when: (1) identifying satisfied and unsatisfied performance obligations; (2) determining the transaction price; and (3) allocating the transaction price to the satisfied and unsatisfied performance obligations. • We did not: (1) disclose the amount of the transaction price that we allocated to remaining performance obligations; or (2) include an explanation of when we expect to recognize the revenue allocated to remaining performance obligations. |
Performance Obligations | Performance Obligations For our managed hotels, we have performance obligations to provide hotel management services and a license to our hotel system intellectual property for the use of our brand names. As compensation for such services, we are generally entitled to receive base fees, which are a percentage of the revenues of hotels, and incentives fees, which are generally based on a measure of hotel profitability. Both the base and incentive management fees are variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract. We recognize base management fees on a monthly basis over the term of the agreement as those amounts become payable. We recognize incentive management fees on a monthly basis over the term of the agreement based on each property's financial results, as long as we do not expect a significant reversal due to projected future hotel performance or cash flows in future periods. For our franchised hotels, we have a performance obligation to provide franchisees and operators a license to our hotel system intellectual property for use of certain of our brand names. As compensation for such services, we are typically entitled to initial application fees and ongoing royalty fees. Our ongoing royalty fees represent variable consideration, as the transaction price is based on a percentage of certain revenues of the hotels, as defined in each contract. We recognize royalty fees on a monthly basis over the term of the agreement as those amounts become payable. Initial application and relicensing fees are fixed consideration payable upon submission of a franchise application or renewal and are recognized on a straight-line basis over the initial or renewal term of the franchise agreements. Under our management and franchise agreements, we are entitled to be reimbursed for certain costs we incur on behalf of the managed, franchised, and licensed properties, with no added mark-up. These costs primarily consist of payroll and related expenses at managed properties where we are the employer of the employees at the properties, and include certain operational and administrative costs as provided for in our contracts with the owners. We are entitled to reimbursement in the period we incur the related reimbursable costs, which we recognize within the “ Cost reimbursement revenue ” caption of our Income Statements. Under our management and franchise agreements, hotel owners and franchisees participate in certain centralized programs and services, such as marketing, sales, reservations, and insurance programs. We operate these programs and services for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. The amounts we charge for these programs and services are generally based on sales or other variable metrics and are payable on a monthly basis. We recognize revenue within the “ Cost reimbursement revenue ” caption of our Income Statements when the amounts may be billed to hotel owners, and we recognize expenses within the “Reimbursed expenses” caption as they are incurred. This pattern of recognition results in temporary timing differences between the costs incurred for centralized programs and services and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. In addition, proceeds from the sale of our interest in Avendra that we expend for the benefit of our hotel owners are included in “Reimbursed expenses.” We provide hotel design and construction review quality assurance (“Global Design”) services to our managed and franchised hotel owners, generally during the period prior to a hotel’s opening or during the period a hotel is converting to a Marriott brand (the “pre-opening period”). As compensation for such services, we may be entitled to receive a one-time fixed fee that is payable during the pre-opening period of the hotel. As these services are not a distinct performance obligation, we recognize the fees on a straight-line basis over the initial term of the management or franchise agreement within the “ Owned, leased, and other revenue ” caption of our Income Statements. At our owned and leased hotels, we have performance obligations to provide accommodations and other ancillary services to hotel guests. As compensation for such goods and services, we are typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased. These fees are generally payable at the time the hotel guest checks out of the hotel. We generally satisfy the performance obligations over time, and we recognize the revenue from room sales and from other ancillary guest services on a daily basis, as the rooms are occupied and we have rendered the services. Under our Loyalty Program , we have a performance obligation to provide or arrange for the provision of goods or services for free or at a discount to Loyalty Program members in exchange for the redemption of points earned from past activities. We operate our Loyalty Program as a cross-brand marketing program to participating properties. Our management and franchise agreements require that properties reimburse us for a portion of the costs of operating the Loyalty Program , including costs for marketing, promotion, communication with, and performing member services for Loyalty Program members, with no added mark-up. We receive contributions on a monthly basis from managed, franchised, owned, and leased hotels based on a portion of qualified spend by Loyalty Program members. We recognize these contributions into revenue as the points are redeemed and we provide the related service. The amount of revenue we recognize upon point redemption is impacted by our estimate of the “breakage” for points that members will never redeem. We estimate such amounts based on our historical experience and expectations of future member behavior. We recognize revenue net of the redemption cost within our “ Cost reimbursement revenue ” caption of our Income Statements, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the managed or franchised property or program partner. We recognize all other Loyalty Program costs as incurred in our “Reimbursed expenses” caption. We have multi-year agreements for our co-brand credit cards associated with our Loyalty Program . Under these agreements, we have performance obligations to provide a license to the intellectual property associated with our brands and marketing lists (“Licensed IP”) to the financial institutions that issue the credit cards, to arrange for the redemption of Loyalty Program points as discussed in the preceding paragraph, and to provide free night certificates to cardholders. We receive fees from these agreements, including fixed amounts that are primarily payable at contract inception, and variable amounts that are paid to us monthly over the term of the agreements, based on: (1) the number of free night certificates issued and redeemed; (2) the number of Loyalty Program points purchased; and (3) the volume of cardholder spend. We allocate those fees among the performance obligations, including the Licensed IP, our Loyalty Program points, and free night certificates provided to cardholders based on their estimated standalone selling prices. The estimation of the standalone selling prices requires significant judgments based upon generally accepted valuation methodologies regarding the value of our Licensed IP, the amount of funding we will receive, and the number of Loyalty Program points and free night certificates we will issue over the term of the agreements. We base our estimates of these amounts on our historical experience and expectation of future cardholder behavior. We recognize the portion of the Licensed IP revenue that meets the sales-based royalty criteria as the credit cards are used and the remaining portion of the Licensed IP revenue on a straight-line basis over the contract term. In our Income Statements, we primarily recognize Licensed IP revenue in the “Franchise fees” caption, and we recognize a portion in the “Cost reimbursement revenue” caption. We recognize the revenue related to the Loyalty Program points as discussed in the preceding paragraph. We recognize the revenue related to the free night certificates when the related service is provided. If the free night certificate redemption involves a managed or franchised property, we recognize revenue net of the redemption cost, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the managed or franchised property. Contract Balances We generally receive payments from customers as we satisfy our performance obligations. We record a receivable when we have an unconditional right to receive payment and only the passage of time is required before payment is due. We record deferred revenue when we receive payment, or have the unconditional right to receive payment, in advance of the satisfaction of our performance obligations related to franchise application and relicensing fees, Global Design fees, credit card branding license fees, and our Loyalty Program . |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of Effects of Adoption of ASUs on Financial Statements | Income Statements Three Months Ended Nine Months Ended ($ in millions, except per share amounts) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) REVENUES Base management fees $ 269 $ — $ 269 $ 818 $ — $ 818 Franchise fees 426 (7 ) 419 1,207 (25 ) 1,182 Incentive management fees 136 2 138 437 (4 ) 433 Gross fee revenues 831 (5 ) 826 2,462 (29 ) 2,433 Contract investment amortization — (11 ) (11 ) — (34 ) (34 ) Net fee revenues 831 (16 ) 815 2,462 (63 ) 2,399 Owned, leased, and other revenue 452 (19 ) 433 1,349 (40 ) 1,309 Cost reimbursement revenue 4,380 (550 ) 3,830 13,208 (1,715 ) 11,493 5,663 (585 ) 5,078 17,019 (1,818 ) 15,201 OPERATING COSTS AND EXPENSES Owned, leased, and other-direct 356 (5 ) 351 1,069 (12 ) 1,057 Depreciation, amortization, and other 68 (14 ) 54 218 (42 ) 176 General, administrative, and other 199 6 205 635 16 651 Merger-related costs and charges 28 — 28 100 — 100 Reimbursed expenses 4,380 (730 ) 3,650 13,208 (2,071 ) 11,137 5,031 (743 ) 4,288 15,230 (2,109 ) 13,121 OPERATING INCOME 632 158 790 1,789 291 2,080 Gains and other income, net 6 — 6 31 — 31 Interest expense (73 ) — (73 ) (216 ) — (216 ) Interest income 9 — 9 24 — 24 Equity in earnings 6 — 6 29 — 29 INCOME BEFORE INCOME TAXES 580 158 738 1,657 291 1,948 Provision for income taxes (188 ) (65 ) (253 ) (486 ) (117 ) (603 ) NET INCOME $ 392 $ 93 $ 485 $ 1,171 $ 174 $ 1,345 EARNINGS PER SHARE Earnings per share - basic $ 1.05 $ 0.25 $ 1.30 $ 3.09 $ 0.46 $ 3.55 Earnings per share - diluted $ 1.04 $ 0.25 $ 1.29 $ 3.06 $ 0.45 $ 3.51 Statements of Comprehensive Income Three Months Ended Nine Months Ended ($ in millions) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 September 30, 2017 (As Adjusted) Net income $ 392 $ 93 $ 485 $ 1,171 $ 174 $ 1,345 Other comprehensive income: Foreign currency translation adjustments 107 — 107 457 — 457 Derivative instrument adjustments, net of tax (5 ) — (5 ) (13 ) — (13 ) Unrealized gain (loss) on available-for-sale securities, net of tax 1 — 1 (1 ) — (1 ) Pension and postretirement adjustments, net of tax — — — — — — Reclassification of losses, net of tax 4 — 4 5 — 5 Total other comprehensive income, net of tax 107 — 107 448 — 448 Comprehensive income $ 499 $ 93 $ 592 $ 1,619 $ 174 $ 1,793 Balance Sheets ($ in millions) December 31, 2017 (As Previously Reported) (1) Adoption of ASU 2014-09 December 31, 2017 (As Adjusted) ASSETS Current assets Cash and equivalents $ 383 $ — $ 383 Accounts and notes receivable, net 1,999 (26 ) 1,973 Prepaid expenses and other 216 19 235 Assets held for sale 149 — 149 2,747 (7 ) 2,740 Property and equipment, net 1,793 — 1,793 Intangible assets Brands 5,922 — 5,922 Contract acquisition costs and other 2,884 (262 ) 2,622 Goodwill 9,207 — 9,207 18,013 (262 ) 17,751 Equity method investments 735 (1 ) 734 Notes receivable, net 142 — 142 Deferred tax assets 93 — 93 Other noncurrent assets 426 167 593 $ 23,949 $ (103 ) $ 23,846 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 398 $ — $ 398 Accounts payable 783 — 783 Accrued payroll and benefits 1,214 — 1,214 Liability for guest loyalty program 2,064 57 2,121 Accrued expenses and other 1,541 (250 ) 1,291 6,000 (193 ) 5,807 Long-term debt 7,840 — 7,840 Liability for guest loyalty program 2,876 (57 ) 2,819 Deferred tax liabilities 604 1 605 Deferred revenue 145 438 583 Other noncurrent liabilities 2,753 (143 ) 2,610 Shareholders' equity Class A Common Stock 5 — 5 Additional paid-in-capital 5,770 — 5,770 Retained earnings 7,391 (149 ) 7,242 Treasury stock, at cost (9,418 ) — (9,418 ) Accumulated other comprehensive loss (17 ) — (17 ) 3,731 (149 ) 3,582 $ 23,949 $ (103 ) $ 23,846 (1) Includes reclassifications among various captions, including Deferred revenue and Other noncurrent liabilities, to conform to current period presentation. Statements of Cash Flows Nine Months Ended Nine Months Ended ($ in millions) September 30, 2017 (As Previously Reported) Adoption of ASU 2014-09 Adoption of ASUs 2016-18 and 2016-15 September 30, 2017 (As Adjusted) OPERATING ACTIVITIES Net income $ 1,171 $ 174 $ — $ 1,345 Adjustments to reconcile to cash provided by operating activities: Depreciation, amortization, and other 218 (8 ) — 210 Share-based compensation 139 — — 139 Income taxes 73 117 — 190 Liability for guest loyalty program 236 (80 ) — 156 Contract acquisition costs — (126 ) — (126 ) Merger-related charges (117 ) — — (117 ) Working capital changes 98 (219 ) (3 ) (124 ) Gain on asset dispositions (30 ) — — (30 ) Other 128 5 (25 ) 108 Net cash provided by (used in) operating activities 1,916 (137 ) (28 ) 1,751 INVESTING ACTIVITIES Capital expenditures (155 ) — — (155 ) Dispositions 482 — — 482 Loan advances (85 ) — — (85 ) Loan collections 91 — — 91 Contract acquisition costs (129 ) 129 — — Other (14 ) 8 — (6 ) Net cash provided by investing activities 190 137 — 327 FINANCING ACTIVITIES Commercial paper/Credit Facility, net 455 — 25 480 Issuance of long-term debt 1 — — 1 Repayment of long-term debt (305 ) — — (305 ) Issuance of Class A Common Stock 4 — — 4 Dividends paid (362 ) — — (362 ) Purchase of treasury stock (2,105 ) — — (2,105 ) Share-based compensation withholding taxes (144 ) — — (144 ) Net cash (used in) provided by financing activities (2,456 ) — 25 (2,431 ) (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (350 ) — (3 ) (353 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 858 — 29 887 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 508 $ — $ 26 $ 534 | The following tables present the effect of the adoption of ASUs 2014-09, 2016-15, and 2016-18 on our 2017 Financial Statements. Throughout this report, our 2017 financial results reflect the “As Adjusted” amounts shown in the tables below. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present our revenues disaggregated by major revenue stream for the three and nine months ended September 30, 2018 and September 30, 2017 . Three Months Ended September 30, 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 305 $ 246 $ 119 $ 135 $ 805 Contract investment amortization (7 ) (3 ) — (3 ) (13 ) Net fee revenues 298 243 119 132 792 Owned, leased, and other revenue 137 34 46 165 382 Cost reimbursement revenue 2,688 598 110 264 3,660 Total segment revenue $ 3,123 $ 875 $ 275 $ 561 $ 4,834 Unallocated corporate 215 Total revenue $ 5,049 Three Months Ended September 30, 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 285 $ 232 $ 106 $ 118 $ 741 Contract investment amortization (7 ) (2 ) — (2 ) (11 ) Net fee revenues 278 230 106 116 730 Owned, leased, and other revenue 157 37 48 179 421 Cost reimbursement revenue 2,661 596 109 296 3,662 Total segment revenue $ 3,096 $ 863 $ 263 $ 591 $ 4,813 Unallocated corporate 265 Total revenue $ 5,078 Nine Months Ended September 30, 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 949 $ 692 $ 346 $ 385 $ 2,372 Contract investment amortization (25 ) (9 ) (1 ) (9 ) (44 ) Net fee revenues 924 683 345 376 2,328 Owned, leased, and other revenue 432 104 141 501 1,178 Cost reimbursement revenue 8,422 1,737 332 818 11,309 Total segment revenue $ 9,778 $ 2,524 $ 818 $ 1,695 $ 14,815 Unallocated corporate 586 Total revenue $ 15,401 Nine Months Ended September 30, 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 891 $ 643 $ 301 $ 349 $ 2,184 Contract investment amortization (19 ) (8 ) (1 ) (6 ) (34 ) Net fee revenues 872 635 300 343 2,150 Owned, leased, and other revenue 535 100 138 503 1,276 Cost reimbursement revenue 8,206 1,705 318 845 11,074 Total segment revenue $ 9,613 $ 2,440 $ 756 $ 1,691 $ 14,500 Unallocated corporate 701 Total revenue $ 15,201 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Earnings 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 Nine Months Ended (in millions, except per share amounts) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Computation of Basic Earnings Per Share Net income $ 483 $ 485 $ 1,491 $ 1,345 Shares for basic earnings per share 346.7 372.3 352.8 378.5 Basic earnings per share $ 1.39 $ 1.30 $ 4.23 $ 3.55 Computation of Diluted Earnings Per Share Net income $ 483 $ 485 $ 1,491 $ 1,345 Shares for basic earnings per share 346.7 372.3 352.8 378.5 Effect of dilutive securities Share-based compensation 3.9 4.3 4.3 4.7 Shares for diluted earnings per share 350.6 376.6 357.1 383.2 Diluted earnings per share $ 1.38 $ 1.29 $ 4.18 $ 3.51 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at September 30, 2018 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 129 $ 18 Operating profit 219 109 Other 9 2 $ 357 $ 129 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 2018 third quarter and year-end 2017 : At Period End ($ in millions) September 30, December 31, Senior Notes: Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 $ 599 $ 598 Series L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 349 348 Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 348 348 Series N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 397 397 Series O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 448 447 Series P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 345 345 Series Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 745 744 Series R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 743 743 Series S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018 — 330 Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 190 197 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 335 337 Series W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 292 292 Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) 443 — Commercial paper 3,419 2,371 Credit Facility — — Capital lease obligations 167 171 Other 216 279 $ 9,327 $ 8,238 Less: Current portion of long-term debt (617 ) (398 ) $ 8,710 $ 7,840 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: September 30, 2018 December 31, 2017 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 122 $ 112 $ 142 $ 130 Total noncurrent financial assets $ 122 $ 112 $ 142 $ 130 Senior Notes $ (4,926 ) $ (4,814 ) $ (5,087 ) $ (5,126 ) Commercial paper (3,419 ) (3,419 ) (2,371 ) (2,371 ) Other long-term debt (204 ) (204 ) (217 ) (221 ) Other noncurrent liabilities (158 ) (158 ) (178 ) (178 ) Total noncurrent financial liabilities $ (8,707 ) $ (8,595 ) $ (7,853 ) $ (7,896 ) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss and Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) Activity | The following tables detail the accumulated other comprehensive loss activity for the 2018 first three quarters and 2017 first three quarters : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2017 $ (23 ) $ (10 ) $ 4 $ 12 $ (17 ) Other comprehensive (loss) income before reclassifications (1) (313 ) 7 — — (306 ) Amounts reclassified from accumulated other comprehensive loss 10 8 — — 18 Net other comprehensive (loss) income (303 ) 15 — — (288 ) Adoption of ASU 2016-01 — — (4 ) — (4 ) Balance at September 30, 2018 $ (326 ) $ 5 $ — $ 12 $ (309 ) ($ 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) 457 (13 ) (1 ) — 443 Amounts reclassified from accumulated other comprehensive loss — 5 — — 5 Net other comprehensive income (loss) 457 (8 ) (1 ) — 448 Balance at September 30, 2017 $ (46 ) $ (13 ) $ 5 $ 5 $ (49 ) (1) Other comprehensive (loss) income before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in a gain of $27 million for the 2018 first three quarters and loss of $142 million for the 2017 first three quarters . |
Changes in Shareholders' Equity (Deficit) | The following table details the changes in common shares outstanding and shareholders’ equity for the 2018 first three quarters : (in millions, except per share amounts) Common Shares Outstanding Total Class A Common Stock Additional Paid-in- Capital Retained Earnings Treasury Stock, at Cost Accumulated Other Comprehensive Loss 359.1 Balance at year-end 2017 (as previously reported) $ 3,731 $ 5 $ 5,770 $ 7,391 $ (9,418 ) $ (17 ) — Adoption of ASU 2014-09 (149 ) — — (149 ) — — 359.1 Balance at year-end 2017 (as adjusted) 3,582 5 5,770 7,242 (9,418 ) (17 ) — Adoption of ASU 2016-01 — — — 4 — (4 ) — Adoption of ASU 2016-16 372 — — 372 — — — Net income 1,491 — — 1,491 — — — Other comprehensive loss (288 ) — — — — (288 ) — Dividends ($1.15 per share) (404 ) — — (404 ) — — 1.4 Share-based compensation plans 44 — 3 — 41 — (18.5 ) Purchase of treasury stock (2,473 ) — — — (2,473 ) — 342.0 Balance at September 30, 2018 $ 2,324 $ 5 $ 5,773 $ 8,705 $ (11,850 ) $ (309 ) |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Revenues | Segment Revenues Three Months Ended Nine Months Ended ($ in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 North American Full-Service $ 3,123 $ 3,096 $ 9,778 $ 9,613 North American Limited-Service 875 863 2,524 2,440 Asia Pacific 275 263 818 756 Other International 561 591 1,695 1,691 Total segment revenues 4,834 4,813 14,815 14,500 Other unallocated corporate 215 265 586 701 Total consolidated revenues $ 5,049 $ 5,078 $ 15,401 $ 15,201 |
Segment Profits | Segment Profits Three Months Ended Nine Months Ended ($ in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 North American Full-Service $ 248 $ 295 $ 919 $ 972 North American Limited-Service 206 255 640 685 Asia Pacific 106 93 358 260 Other International 176 140 495 371 Total segment profits 736 783 2,412 2,288 Other unallocated corporate (87 ) 18 (316 ) (149 ) Interest expense, net of interest income (81 ) (63 ) (230 ) (191 ) Income taxes (85 ) (253 ) (375 ) (603 ) Net income $ 483 $ 485 $ 1,491 $ 1,345 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2016 |
Adoption of ASU 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | $ 372 | |||
Adoption of ASU 2016-01 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | 0 | |||
Adoption of ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | $ (149) | |||
Retained Earnings | Adoption of ASU 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | 372 | |||
Retained Earnings | Adoption of ASU 2016-01 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | $ 4 | |||
Retained Earnings | Adoption of ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment of accounting principle | $ (149) | $ 264 | ||
Minimum | Scenario, Forecast | Adoption of ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 1,000 | |||
Operating lease liabilities | 1,000 | |||
Maximum | Scenario, Forecast | Adoption of ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | 1,200 | |||
Operating lease liabilities | $ 1,200 |
Basis of Presentation - Effect
Basis of Presentation - Effect of Adoption of ASU 2014-09 on Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||
Revenues | $ 5,049 | $ 5,078 | $ 15,401 | $ 15,201 |
OPERATING COSTS AND EXPENSES | ||||
Depreciation, amortization, and other | 52 | 54 | 164 | 176 |
General, administrative, and other | 221 | 205 | 685 | 651 |
Merger-related costs and charges | 12 | 28 | 64 | 100 |
Costs and expenses | 4,479 | 4,288 | 13,591 | 13,121 |
OPERATING INCOME | 570 | 790 | 1,810 | 2,080 |
Gains and other income, net | 18 | 6 | 191 | 31 |
Interest expense | (86) | (73) | (246) | (216) |
Interest income | 5 | 9 | 16 | 24 |
Equity in earnings | 61 | 6 | 95 | 29 |
INCOME BEFORE INCOME TAXES | 568 | 738 | 1,866 | 1,948 |
Income taxes | (85) | (253) | (375) | (603) |
NET INCOME | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
EARNINGS PER SHARE | ||||
Earnings per share - basic (in USD per share) | $ 1.39 | $ 1.30 | $ 4.23 | $ 3.55 |
Earnings per share - diluted (in USD per share) | $ 1.38 | $ 1.29 | $ 4.18 | $ 3.51 |
Base management fees | ||||
REVENUES | ||||
Gross revenues | $ 279 | $ 269 | $ 852 | $ 818 |
Franchise fees | ||||
REVENUES | ||||
Gross revenues | 502 | 419 | 1,394 | 1,182 |
Incentive management fees | ||||
REVENUES | ||||
Gross revenues | 151 | 138 | 482 | 433 |
Fee revenues | ||||
REVENUES | ||||
Gross revenues | 932 | 826 | 2,728 | 2,433 |
Contract investment amortization | (13) | (11) | (44) | (34) |
Revenues | 919 | 815 | 2,684 | 2,399 |
Owned, leased, and other | ||||
REVENUES | ||||
Revenues | 397 | 433 | 1,226 | 1,309 |
OPERATING COSTS AND EXPENSES | ||||
Operating costs | 315 | 351 | 985 | 1,057 |
Reimbursements | ||||
REVENUES | ||||
Revenues | 3,733 | 3,830 | 11,491 | 11,493 |
OPERATING COSTS AND EXPENSES | ||||
Operating costs | $ 3,879 | 3,650 | $ 11,693 | 11,137 |
As Previously Reported | ||||
REVENUES | ||||
Revenues | 5,663 | 17,019 | ||
OPERATING COSTS AND EXPENSES | ||||
Depreciation, amortization, and other | 68 | 218 | ||
General, administrative, and other | 199 | 635 | ||
Merger-related costs and charges | 28 | 100 | ||
Costs and expenses | 5,031 | 15,230 | ||
OPERATING INCOME | 632 | 1,789 | ||
Gains and other income, net | 6 | 31 | ||
Interest expense | (73) | (216) | ||
Interest income | 9 | 24 | ||
Equity in earnings | 6 | 29 | ||
INCOME BEFORE INCOME TAXES | 580 | 1,657 | ||
Income taxes | (188) | (486) | ||
NET INCOME | $ 392 | $ 1,171 | ||
EARNINGS PER SHARE | ||||
Earnings per share - basic (in USD per share) | $ 1.05 | $ 3.09 | ||
Earnings per share - diluted (in USD per share) | $ 1.04 | $ 3.06 | ||
As Previously Reported | Base management fees | ||||
REVENUES | ||||
Gross revenues | $ 269 | $ 818 | ||
As Previously Reported | Franchise fees | ||||
REVENUES | ||||
Gross revenues | 426 | 1,207 | ||
As Previously Reported | Incentive management fees | ||||
REVENUES | ||||
Gross revenues | 136 | 437 | ||
As Previously Reported | Fee revenues | ||||
REVENUES | ||||
Gross revenues | 831 | 2,462 | ||
Contract investment amortization | 0 | 0 | ||
Revenues | 831 | 2,462 | ||
As Previously Reported | Owned, leased, and other | ||||
REVENUES | ||||
Revenues | 452 | 1,349 | ||
OPERATING COSTS AND EXPENSES | ||||
Operating costs | 356 | 1,069 | ||
As Previously Reported | Reimbursements | ||||
REVENUES | ||||
Revenues | 4,380 | 13,208 | ||
OPERATING COSTS AND EXPENSES | ||||
Operating costs | 4,380 | 13,208 | ||
Adjustment | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Revenues | (585) | (1,818) | ||
OPERATING COSTS AND EXPENSES | ||||
Depreciation, amortization, and other | (14) | (42) | ||
General, administrative, and other | 6 | 16 | ||
Merger-related costs and charges | 0 | 0 | ||
Costs and expenses | (743) | (2,109) | ||
OPERATING INCOME | 158 | 291 | ||
Gains and other income, net | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Interest income | 0 | 0 | ||
Equity in earnings | 0 | 0 | ||
INCOME BEFORE INCOME TAXES | 158 | 291 | ||
Income taxes | (65) | (117) | ||
NET INCOME | $ 93 | $ 174 | ||
EARNINGS PER SHARE | ||||
Earnings per share - basic (in USD per share) | $ 0.25 | $ 0.46 | ||
Earnings per share - diluted (in USD per share) | $ 0.25 | $ 0.45 | ||
Adjustment | Base management fees | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Gross revenues | $ 0 | $ 0 | ||
Adjustment | Franchise fees | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Gross revenues | (7) | (25) | ||
Adjustment | Incentive management fees | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Gross revenues | 2 | (4) | ||
Adjustment | Fee revenues | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Gross revenues | (5) | (29) | ||
Contract investment amortization | (11) | (34) | ||
Revenues | (16) | (63) | ||
Adjustment | Owned, leased, and other | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Revenues | (19) | (40) | ||
OPERATING COSTS AND EXPENSES | ||||
Operating costs | (5) | (12) | ||
Adjustment | Reimbursements | Adoption of ASU 2014-09 | ||||
REVENUES | ||||
Revenues | (550) | (1,715) | ||
OPERATING COSTS AND EXPENSES | ||||
Operating costs | $ (730) | $ (2,071) |
Basis of Presentation - Effec_2
Basis of Presentation - Effect of Adoption of ASU 2014-09 on Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (66) | 107 | (313) | 457 |
Derivative instrument adjustments, net of tax | (1) | (5) | 7 | (13) |
Unrealized gain (loss) on available-for-sale securities, net of tax | 0 | 1 | 0 | (1) |
Pension and postretirement adjustments, net of tax | 0 | 0 | 0 | 0 |
Reclassification of losses, net of tax | 2 | 4 | 18 | 5 |
Net other comprehensive (loss) income | (65) | 107 | (288) | 448 |
Comprehensive income | $ 418 | 592 | $ 1,203 | 1,793 |
As Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | 392 | 1,171 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 107 | 457 | ||
Derivative instrument adjustments, net of tax | (5) | (13) | ||
Unrealized gain (loss) on available-for-sale securities, net of tax | 1 | (1) | ||
Pension and postretirement adjustments, net of tax | 0 | 0 | ||
Reclassification of losses, net of tax | 4 | 5 | ||
Net other comprehensive (loss) income | 107 | 448 | ||
Comprehensive income | 499 | 1,619 | ||
Adjustment | Adoption of ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | 93 | 174 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 0 | 0 | ||
Derivative instrument adjustments, net of tax | 0 | 0 | ||
Unrealized gain (loss) on available-for-sale securities, net of tax | 0 | 0 | ||
Pension and postretirement adjustments, net of tax | 0 | 0 | ||
Reclassification of losses, net of tax | 0 | 0 | ||
Net other comprehensive (loss) income | 0 | 0 | ||
Comprehensive income | $ 93 | $ 174 |
Basis of Presentation - Effec_3
Basis of Presentation - Effect of Adoption of ASU 2014-09 on Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 373 | $ 383 |
Accounts and notes receivable, net | 2,175 | 1,973 |
Prepaid expenses and other | 242 | 235 |
Assets held for sale | 13 | 149 |
Assets, current, total | 2,803 | 2,740 |
Property and equipment, net | 1,967 | 1,793 |
Intangible assets | ||
Goodwill | 9,067 | 9,207 |
Goodwill and intangible assets, net, total | 17,470 | 17,751 |
Equity method investments | 689 | 734 |
Notes receivable, net | 122 | 142 |
Deferred tax assets | 171 | 93 |
Other noncurrent assets | 611 | 593 |
Total assets | 23,833 | 23,846 |
Current liabilities | ||
Current portion of long-term debt | 617 | 398 |
Accounts payable | 759 | 783 |
Accrued payroll and benefits | 1,253 | 1,214 |
Accrued expenses and other | 1,117 | 1,291 |
Liabilities, current, total | 6,051 | 5,807 |
Long-term debt | 8,710 | 7,840 |
Deferred tax liabilities | 551 | 605 |
Other noncurrent liabilities | 2,248 | 2,610 |
Shareholders’ equity | ||
Class A Common Stock | 5 | 5 |
Additional paid-in-capital | 5,773 | 5,770 |
Retained earnings | 8,705 | 7,242 |
Treasury stock, at cost | (11,850) | (9,418) |
Accumulated other comprehensive loss | (309) | (17) |
Stockholders' equity (deficit) attributable to parent | 2,324 | 3,582 |
Liabilities and equity (deficit), total | 23,833 | 23,846 |
Brands | ||
Intangible assets | ||
Intangible assets | 5,809 | 5,922 |
Contract acquisition costs and other | ||
Intangible assets | ||
Intangible assets | 2,594 | 2,622 |
Deferred revenue | ||
Current liabilities | ||
Contract with customer | 632 | 583 |
Liability for guest loyalty program | ||
Current liabilities | ||
Liability for guest loyalty program | 2,305 | 2,121 |
Contract with customer | $ 3,317 | 2,819 |
As Previously Reported | ||
Current assets | ||
Cash and equivalents | 383 | |
Accounts and notes receivable, net | 1,999 | |
Prepaid expenses and other | 216 | |
Assets held for sale | 149 | |
Assets, current, total | 2,747 | |
Property and equipment, net | 1,793 | |
Intangible assets | ||
Goodwill | 9,207 | |
Goodwill and intangible assets, net, total | 18,013 | |
Equity method investments | 735 | |
Notes receivable, net | 142 | |
Deferred tax assets | 93 | |
Other noncurrent assets | 426 | |
Total assets | 23,949 | |
Current liabilities | ||
Current portion of long-term debt | 398 | |
Accounts payable | 783 | |
Accrued payroll and benefits | 1,214 | |
Accrued expenses and other | 1,541 | |
Liabilities, current, total | 6,000 | |
Long-term debt | 7,840 | |
Deferred tax liabilities | 604 | |
Other noncurrent liabilities | 2,753 | |
Shareholders’ equity | ||
Class A Common Stock | 5 | |
Additional paid-in-capital | 5,770 | |
Retained earnings | 7,391 | |
Treasury stock, at cost | (9,418) | |
Accumulated other comprehensive loss | (17) | |
Stockholders' equity (deficit) attributable to parent | 3,731 | |
Liabilities and equity (deficit), total | 23,949 | |
As Previously Reported | Brands | ||
Intangible assets | ||
Intangible assets | 5,922 | |
As Previously Reported | Contract acquisition costs and other | ||
Intangible assets | ||
Intangible assets | 2,884 | |
As Previously Reported | Deferred revenue | ||
Current liabilities | ||
Contract with customer | 145 | |
As Previously Reported | Liability for guest loyalty program | ||
Current liabilities | ||
Liability for guest loyalty program | 2,064 | |
Contract with customer | 2,876 | |
Adjustment | Adoption of ASU 2014-09 | ||
Current assets | ||
Cash and equivalents | 0 | |
Accounts and notes receivable, net | (26) | |
Prepaid expenses and other | 19 | |
Assets held for sale | 0 | |
Assets, current, total | (7) | |
Property and equipment, net | 0 | |
Intangible assets | ||
Goodwill | 0 | |
Goodwill and intangible assets, net, total | (262) | |
Equity method investments | (1) | |
Notes receivable, net | 0 | |
Deferred tax assets | 0 | |
Other noncurrent assets | 167 | |
Total assets | (103) | |
Current liabilities | ||
Current portion of long-term debt | 0 | |
Accounts payable | 0 | |
Accrued payroll and benefits | 0 | |
Accrued expenses and other | (250) | |
Liabilities, current, total | (193) | |
Long-term debt | 0 | |
Deferred tax liabilities | 1 | |
Other noncurrent liabilities | (143) | |
Shareholders’ equity | ||
Class A Common Stock | 0 | |
Additional paid-in-capital | 0 | |
Retained earnings | (149) | |
Treasury stock, at cost | 0 | |
Accumulated other comprehensive loss | 0 | |
Stockholders' equity (deficit) attributable to parent | (149) | |
Liabilities and equity (deficit), total | (103) | |
Adjustment | Adoption of ASU 2014-09 | Brands | ||
Intangible assets | ||
Intangible assets | 0 | |
Adjustment | Adoption of ASU 2014-09 | Contract acquisition costs and other | ||
Intangible assets | ||
Intangible assets | (262) | |
Adjustment | Deferred revenue | Adoption of ASU 2014-09 | ||
Current liabilities | ||
Contract with customer | 438 | |
Adjustment | Liability for guest loyalty program | Adoption of ASU 2014-09 | ||
Current liabilities | ||
Liability for guest loyalty program | 57 | |
Contract with customer | $ (57) |
Basis of Presentation - Effec_4
Basis of Presentation - Effect of Adoption of ASU 2014-09 on Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES | ||||
Net income | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
Adjustments to reconcile to cash provided by operating activities: | ||||
Depreciation, amortization, and other | 208 | 210 | ||
Share-based compensation | 140 | 139 | ||
Income taxes | (192) | 190 | ||
Contract acquisition costs | (110) | (126) | ||
Merger-related charges | (37) | (117) | ||
Working capital changes | (233) | (124) | ||
Gain on asset dispositions | (191) | (30) | ||
Other | 67 | 108 | ||
Net cash provided by (used in) operating activities | 1,824 | 1,751 | ||
INVESTING ACTIVITIES | ||||
Capital expenditures | (462) | (155) | ||
Dispositions | 460 | 482 | ||
Loan advances | (13) | (85) | ||
Loan collections | 47 | 91 | ||
Contract acquisition costs | 0 | |||
Other | 49 | (6) | ||
Net cash provided by investing activities | 81 | 327 | ||
FINANCING ACTIVITIES | ||||
Commercial paper/Credit Facility, net | 1,045 | 480 | ||
Issuance of long-term debt | 443 | 1 | ||
Repayment of long-term debt | (391) | (305) | ||
Issuance of Class A Common Stock | 4 | 4 | ||
Dividends paid | (404) | (362) | ||
Purchase of treasury stock | (2,513) | (2,105) | ||
Share-based compensation withholding taxes | (105) | (144) | ||
Net cash provided by (used in) financing activities | (1,921) | (2,431) | ||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (16) | (353) | ||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 429 | 887 | ||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | $ 413 | 534 | 413 | 534 |
Liability for guest loyalty program | ||||
Adjustments to reconcile to cash provided by operating activities: | ||||
Liability for guest loyalty program | $ 681 | 156 | ||
As Previously Reported | ||||
OPERATING ACTIVITIES | ||||
Net income | 392 | 1,171 | ||
Adjustments to reconcile to cash provided by operating activities: | ||||
Depreciation, amortization, and other | 218 | |||
Share-based compensation | 139 | |||
Income taxes | 73 | |||
Contract acquisition costs | 0 | |||
Merger-related charges | (117) | |||
Working capital changes | 98 | |||
Gain on asset dispositions | (30) | |||
Other | 128 | |||
Net cash provided by (used in) operating activities | 1,916 | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | (155) | |||
Dispositions | 482 | |||
Loan advances | (85) | |||
Loan collections | 91 | |||
Contract acquisition costs | (129) | |||
Other | (14) | |||
Net cash provided by investing activities | 190 | |||
FINANCING ACTIVITIES | ||||
Commercial paper/Credit Facility, net | 455 | |||
Issuance of long-term debt | 1 | |||
Repayment of long-term debt | (305) | |||
Issuance of Class A Common Stock | 4 | |||
Dividends paid | (362) | |||
Purchase of treasury stock | (2,105) | |||
Share-based compensation withholding taxes | (144) | |||
Net cash provided by (used in) financing activities | (2,456) | |||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (350) | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 858 | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | 508 | 508 | ||
As Previously Reported | Liability for guest loyalty program | ||||
Adjustments to reconcile to cash provided by operating activities: | ||||
Liability for guest loyalty program | 236 | |||
Adjustment | Adoption of ASU 2014-09 | ||||
OPERATING ACTIVITIES | ||||
Net income | 93 | 174 | ||
Adjustments to reconcile to cash provided by operating activities: | ||||
Depreciation, amortization, and other | (8) | |||
Share-based compensation | 0 | |||
Income taxes | 117 | |||
Contract acquisition costs | (126) | |||
Merger-related charges | 0 | |||
Working capital changes | (219) | |||
Gain on asset dispositions | 0 | |||
Other | 5 | |||
Net cash provided by (used in) operating activities | (137) | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | |||
Dispositions | 0 | |||
Loan advances | 0 | |||
Loan collections | 0 | |||
Contract acquisition costs | 129 | |||
Other | 8 | |||
Net cash provided by investing activities | 137 | |||
FINANCING ACTIVITIES | ||||
Commercial paper/Credit Facility, net | 0 | |||
Issuance of long-term debt | 0 | |||
Repayment of long-term debt | 0 | |||
Issuance of Class A Common Stock | 0 | |||
Dividends paid | 0 | |||
Purchase of treasury stock | 0 | |||
Share-based compensation withholding taxes | 0 | |||
Net cash provided by (used in) financing activities | 0 | |||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 0 | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 0 | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | 0 | 0 | ||
Adjustment | Adoption of ASUs 2016-18 and 2016-15 | ||||
OPERATING ACTIVITIES | ||||
Net income | 0 | |||
Adjustments to reconcile to cash provided by operating activities: | ||||
Depreciation, amortization, and other | 0 | |||
Share-based compensation | 0 | |||
Income taxes | 0 | |||
Contract acquisition costs | 0 | |||
Merger-related charges | 0 | |||
Working capital changes | (3) | |||
Gain on asset dispositions | 0 | |||
Other | (25) | |||
Net cash provided by (used in) operating activities | (28) | |||
INVESTING ACTIVITIES | ||||
Capital expenditures | 0 | |||
Dispositions | 0 | |||
Loan advances | 0 | |||
Loan collections | 0 | |||
Contract acquisition costs | 0 | |||
Other | 0 | |||
Net cash provided by investing activities | 0 | |||
FINANCING ACTIVITIES | ||||
Commercial paper/Credit Facility, net | 25 | |||
Issuance of long-term debt | 0 | |||
Repayment of long-term debt | 0 | |||
Issuance of Class A Common Stock | 0 | |||
Dividends paid | 0 | |||
Purchase of treasury stock | 0 | |||
Share-based compensation withholding taxes | 0 | |||
Net cash provided by (used in) financing activities | 25 | |||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (3) | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 29 | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | $ 26 | 26 | ||
Adjustment | Liability for guest loyalty program | Adoption of ASU 2014-09 | ||||
Adjustments to reconcile to cash provided by operating activities: | ||||
Liability for guest loyalty program | (80) | |||
Adjustment | Liability for guest loyalty program | Adoption of ASUs 2016-18 and 2016-15 | ||||
Adjustments to reconcile to cash provided by operating activities: | ||||
Liability for guest loyalty program | $ 0 |
Revenues - Disaggregation of R
Revenues - Disaggregation of Revenue Stream (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 5,049 | $ 5,078 | $ 15,401 | $ 15,201 |
Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,834 | 4,813 | 14,815 | 14,500 |
Segments | North American Full-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,123 | 3,096 | 9,778 | 9,613 |
Segments | North American Limited-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 875 | 863 | 2,524 | 2,440 |
Segments | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 275 | 263 | 818 | 756 |
Segments | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 561 | 591 | 1,695 | 1,691 |
Unallocated corporate | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 215 | 265 | 586 | 701 |
Fee revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 932 | 826 | 2,728 | 2,433 |
Contract investment amortization | (13) | (11) | (44) | (34) |
Revenues | 919 | 815 | 2,684 | 2,399 |
Fee revenues | Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 805 | 741 | 2,372 | 2,184 |
Contract investment amortization | (13) | (11) | (44) | (34) |
Revenues | 792 | 730 | 2,328 | 2,150 |
Fee revenues | Segments | North American Full-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 305 | 285 | 949 | 891 |
Contract investment amortization | (7) | (7) | (25) | (19) |
Revenues | 298 | 278 | 924 | 872 |
Fee revenues | Segments | North American Limited-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 246 | 232 | 692 | 643 |
Contract investment amortization | (3) | (2) | (9) | (8) |
Revenues | 243 | 230 | 683 | 635 |
Fee revenues | Segments | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 119 | 106 | 346 | 301 |
Contract investment amortization | 0 | 0 | (1) | (1) |
Revenues | 119 | 106 | 345 | 300 |
Fee revenues | Segments | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Gross revenues | 135 | 118 | 385 | 349 |
Contract investment amortization | (3) | (2) | (9) | (6) |
Revenues | 132 | 116 | 376 | 343 |
Owned, leased, and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 397 | 433 | 1,226 | 1,309 |
Owned, leased, and other | Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 382 | 421 | 1,178 | 1,276 |
Owned, leased, and other | Segments | North American Full-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 137 | 157 | 432 | 535 |
Owned, leased, and other | Segments | North American Limited-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 34 | 37 | 104 | 100 |
Owned, leased, and other | Segments | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 46 | 48 | 141 | 138 |
Owned, leased, and other | Segments | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 165 | 179 | 501 | 503 |
Reimbursements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,733 | 3,830 | 11,491 | 11,493 |
Reimbursements | Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,660 | 3,662 | 11,309 | 11,074 |
Reimbursements | Segments | North American Full-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,688 | 2,661 | 8,422 | 8,206 |
Reimbursements | Segments | North American Limited-Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 598 | 596 | 1,737 | 1,705 |
Reimbursements | Segments | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 110 | 109 | 332 | 318 |
Reimbursements | Segments | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 264 | $ 296 | $ 818 | $ 845 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Capitalized costs | $ 313 | $ 295 |
Contract Balances, Excluding Loyalty Program | ||
Disaggregation of Revenue [Line Items] | ||
Increase (decrease) in contract liabilities | 81 | |
Contract balances | 766 | 685 |
Loyalty Program | ||
Disaggregation of Revenue [Line Items] | ||
Increase (decrease) in contract liabilities | 682 | |
Contract balances | 5,622 | $ 4,940 |
Revenue recognized | $ 1,315 |
Acquisitions and Dipositions -
Acquisitions and Dipositions - Acquisitions (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Sheraton Grand Phoenix | |
Business Acquisition [Line Items] | |
Acquisition price | $ 255 |
Acquisitions and Dipositions _2
Acquisitions and Dipositions - Dispositions, Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of equity method investments | $ 42 | |||
Gain on sale from equity method investee | $ 55 | $ 10 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | The Tremont Chicago Hotel at Magnificent Mile, Le Centre Sheraton Montreal Hotel, Westin Denarau Island Resort, and The Sheraton Fiji Resort | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of property | $ 79 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | The Sheraton Buenos Aires Hotel & Convention Center and Park Tower | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of property | $ 53 |
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Computation of Basic Earnings Per Share | ||||
Net income | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
Shares for basic earnings per share (in shares) | 346.7 | 372.3 | 352.8 | 378.5 |
Basic earnings per share (in USD per share) | $ 1.39 | $ 1.30 | $ 4.23 | $ 3.55 |
Computation of Diluted Earnings Per Share | ||||
Net income | $ 483 | $ 485 | $ 1,491 | $ 1,345 |
Shares for basic earnings per share (in shares) | 346.7 | 372.3 | 352.8 | 378.5 |
Effect of dilutive securities | ||||
Share-based compensation (in shares) | 3.9 | 4.3 | 4.3 | 4.7 |
Shares for diluted earnings per share (in shares) | 350.6 | 376.6 | 357.1 | 383.2 |
Diluted earnings per share (in USD per share) | $ 1.38 | $ 1.29 | $ 4.18 | $ 3.51 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 47 | $ 44 | $ 140 | $ 139 | |
Deferred compensation costs related to unvested awards | $ 219 | $ 219 | $ 168 | ||
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) | $ 133 | ||||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, granted (in shares) | 1.4 | ||||
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) | 0.1 | ||||
Stock awards, vesting period | 3 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 14.90% | 34.30% | 20.10% | 31.00% |
Cash paid for income taxes, net of refunds | $ 567 | $ 413 | ||
Change in cash paid for income taxes, net of refunds | 154 | |||
Provisional estimate of the benefit of the 2017 tax act due to the one-time transition tax | 5 | |||
Provisional estimate of the impact of the 2017 tax act due to deemed repatriation transition tax | 740 | |||
Tax expense relating to remitted accumulated earnings of non-U.S. subsidiaries | $ 27 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantees (Details) $ in Millions | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | $ 357 |
Recorded Liability for Guarantees | 129 |
Debt service | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 129 |
Recorded Liability for Guarantees | 18 |
Operating profit | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 219 |
Recorded Liability for Guarantees | 109 |
Other | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 9 |
Recorded Liability for Guarantees | $ 2 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingent Purchase Obligations (Details) $ in Millions | Sep. 30, 2018USD ($) |
Guarantor Obligations [Line Items] | |
Guarantee | $ 357 |
Guarantee, recorded liability | 129 |
Sheraton Grand Chicago Hotel | |
Guarantor Obligations [Line Items] | |
Guarantee, recorded liability | 57 |
Sheraton Grand Chicago Hotel | Hotel and Leasehold | |
Guarantor Obligations [Line Items] | |
Guarantee | 300 |
Sheraton Grand Chicago Hotel | Land | |
Guarantor Obligations [Line Items] | |
Guarantee | $ 200 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Credit Facility | $ 0 | $ 0 | |
Capital lease obligations | 167 | 171 | |
Total debt | 9,327 | 8,238 | |
Less: Current portion of long-term debt | (617) | (398) | |
Long-term debt, noncurrent | 8,710 | 7,840 | |
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 | 599 | 598 | |
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 | 349 | 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 | 348 | 348 | |
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 | 397 | 397 | |
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 | 448 | 447 | |
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 | 345 | 345 | |
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 | 745 | 744 | |
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 | 743 | 743 | |
Series S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018 (effective interest rate of 1.7%) | |||
Debt Instrument [Line Items] | |||
Senior notes | 0 | 330 | |
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 | 190 | 197 | |
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 | 335 | 337 | |
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 | 292 | 292 | |
Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 443 | 0 | |
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] | |||
Interest rate | 3.00% | ||
Senior notes, face amount | $ 600 | ||
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] | |||
Interest rate | 3.30% | ||
Senior notes, face amount | $ 350 | ||
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] | |||
Interest rate | 3.40% | ||
Senior notes, face amount | $ 350 | ||
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] | |||
Interest rate | 3.10% | ||
Senior notes, face amount | $ 400 | ||
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] | |||
Interest rate | 2.90% | ||
Senior notes, face amount | $ 450 | ||
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] | |||
Interest rate | 3.80% | ||
Senior notes, face amount | $ 350 | ||
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] | |||
Interest rate | 2.30% | ||
Senior notes, face amount | $ 750 | ||
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] | |||
Interest rate | 3.10% | ||
Senior notes, face amount | $ 750 | ||
Effective interest rate | 3.30% | ||
Senior Notes | Series S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018 (effective interest rate of 1.7%) | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.80% | ||
Senior notes, face amount | $ 324 | ||
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] | |||
Interest rate | 7.20% | ||
Senior notes, face amount | $ 181 | ||
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] | |||
Interest rate | 3.10% | ||
Senior notes, face amount | $ 291 | ||
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] | |||
Interest rate | 3.80% | ||
Senior notes, face amount | $ 318 | ||
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] | |||
Interest rate | 4.50% | ||
Senior notes, face amount | $ 278 | ||
Effective interest rate | 4.10% | ||
Senior Notes | Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.00% | 4.00% | |
Senior notes, face amount | $ 450 | $ 450 | |
Effective interest rate | 4.20% | ||
Commercial paper | |||
Debt Instrument [Line Items] | |||
Commercial paper | $ 3,419 | 2,371 | |
Other | |||
Debt Instrument [Line Items] | |||
Other | $ 216 | $ 279 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |||
Interest paid, net of amounts capitalized | $ 204 | $ 171 | |
Maximum borrowing capacity under credit facility | 4,000 | ||
Senior Notes | Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) | |||
Debt Instrument [Line Items] | |||
Senior notes, face amount | $ 450 | $ 450 | |
Interest rate | 4.00% | 4.00% | |
Proceeds from debt offering | $ 443 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Carrying Values and Fair Values of Non-Current Financial Assets and Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | $ 122 | $ 142 |
Other noncurrent liabilities | (2,248) | (2,610) |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 122 | 142 |
Total noncurrent financial assets | 122 | 142 |
Senior Notes | (4,926) | (5,087) |
Commercial paper | (3,419) | (2,371) |
Other long-term debt | (204) | (217) |
Other noncurrent liabilities | (158) | (178) |
Total noncurrent financial liabilities | (8,707) | (7,853) |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior, mezzanine, and other loans | 112 | 130 |
Total noncurrent financial assets | 112 | 130 |
Senior Notes | (4,814) | (5,126) |
Commercial paper | (3,419) | (2,371) |
Other long-term debt | (204) | (221) |
Other noncurrent liabilities | (158) | (178) |
Total noncurrent financial liabilities | $ (8,595) | $ (7,896) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss and Shareholders' Equity - Accumulated Other Comprehensive (Loss) Income Activity (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | $ 3,731 | ||||
Other comprehensive income (loss) before reclassifications | (306) | $ 443 | |||
Amounts reclassified from accumulated other comprehensive loss | 18 | 5 | |||
Net other comprehensive (loss) income | $ (65) | $ 107 | (288) | 448 | |
Balance at end of period | 2,324 | 2,324 | |||
Other comprehensive income (loss) before reclassification related to foreign current translation adjustment, loss on intra-equity foreign currency transaction | 27 | (142) | |||
Foreign Currency Translation Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | (23) | (503) | |||
Other comprehensive income (loss) before reclassifications | (313) | 457 | |||
Amounts reclassified from accumulated other comprehensive loss | 10 | 0 | |||
Net other comprehensive (loss) income | (303) | 457 | |||
Balance at end of period | (326) | (46) | (326) | (46) | |
Derivative Instrument Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | (10) | (5) | |||
Other comprehensive income (loss) before reclassifications | 7 | (13) | |||
Amounts reclassified from accumulated other comprehensive loss | 8 | 5 | |||
Net other comprehensive (loss) income | 15 | (8) | |||
Balance at end of period | 5 | (13) | 5 | (13) | |
Available-For-Sale Securities Unrealized Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | 4 | 6 | |||
Other comprehensive income (loss) before reclassifications | 0 | (1) | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |||
Net other comprehensive (loss) income | 0 | (1) | |||
Balance at end of period | 0 | 5 | 0 | 5 | |
Pension and Postretirement Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | 12 | 5 | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |||
Net other comprehensive (loss) income | 0 | 0 | |||
Balance at end of period | 12 | 5 | 12 | 5 | |
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Balance at beginning of period | (17) | (497) | |||
Net other comprehensive (loss) income | (288) | ||||
Balance at end of period | $ (309) | $ (49) | $ (309) | $ (49) | |
Adoption of ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | $ 0 | ||||
Adoption of ASU 2016-01 | Foreign Currency Translation Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | 0 | ||||
Adoption of ASU 2016-01 | Derivative Instrument Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | 0 | ||||
Adoption of ASU 2016-01 | Available-For-Sale Securities Unrealized Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | (4) | ||||
Adoption of ASU 2016-01 | Pension and Postretirement Adjustments | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | 0 | ||||
Adoption of ASU 2016-01 | Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Cumulative effect adjustment of accounting principle | $ (4) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss and Shareholders' Equity - Changes in Shareholders' Equity (Deficit) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2016 | |
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | $ 3,731 | ||||||
Balance at beginning of period (in shares) | 359.1 | ||||||
Balance at beginning of period (as adjusted) | $ 2,324 | $ 2,324 | $ 3,582 | ||||
Net income | 483 | $ 485 | 1,491 | $ 1,345 | |||
Other comprehensive loss | (65) | 107 | (288) | 448 | |||
Dividends ($1.15 per share) | (404) | ||||||
Share-based compensation plans | $ 44 | ||||||
Share-based compensation plans (in shares) | 1.4 | ||||||
Purchase of treasury stock | $ (2,473) | ||||||
Purchase of treasury stock (in shares) | (18.5) | ||||||
Balance at end of period | $ 2,324 | $ 2,324 | |||||
Balance at end of period (in shares) | 342 | 342 | |||||
Cash dividends (in USD per share) | $ 1.15 | ||||||
Class A Common Stock | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | $ 5 | ||||||
Balance at beginning of period (as adjusted) | 5 | ||||||
Balance at end of period | $ 5 | 5 | |||||
Additional Paid-in- Capital | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | 5,770 | ||||||
Balance at beginning of period (as adjusted) | 5,770 | ||||||
Share-based compensation plans | 3 | ||||||
Balance at end of period | 5,773 | 5,773 | |||||
Retained Earnings | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | 7,391 | ||||||
Balance at beginning of period (as adjusted) | 7,242 | ||||||
Net income | 1,491 | ||||||
Dividends ($1.15 per share) | (404) | ||||||
Balance at end of period | 8,705 | 8,705 | |||||
Treasury Stock, at Cost | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | (9,418) | ||||||
Balance at beginning of period (as adjusted) | (9,418) | ||||||
Share-based compensation plans | 41 | ||||||
Purchase of treasury stock | (2,473) | ||||||
Balance at end of period | (11,850) | (11,850) | |||||
Accumulated Other Comprehensive Loss | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Balance at beginning of period | (17) | (497) | |||||
Balance at beginning of period (as adjusted) | (17) | ||||||
Other comprehensive loss | (288) | ||||||
Balance at end of period | $ (309) | $ (49) | $ (309) | $ (49) | |||
Adoption of ASU 2014-09 | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | (149) | ||||||
Adoption of ASU 2014-09 | Retained Earnings | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | (149) | $ 264 | |||||
Adoption of ASU 2014-09 | Accumulated Other Comprehensive Loss | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | $ 0 | ||||||
Adoption of ASU 2016-01 | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | $ 0 | ||||||
Adoption of ASU 2016-01 | Retained Earnings | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | 4 | ||||||
Adoption of ASU 2016-01 | Accumulated Other Comprehensive Loss | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | (4) | ||||||
Adoption of ASU 2016-16 | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | 372 | ||||||
Adoption of ASU 2016-16 | Retained Earnings | |||||||
(Increase) Decrease in Shareholders' Deficit [Roll Forward] | |||||||
Adoption of ASU | $ 372 |
Business Segments - Segment Rev
Business Segments - Segment Revenues (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 5,049 | $ 5,078 | $ 15,401 | $ 15,201 |
Total segment | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 4,834 | 4,813 | 14,815 | 14,500 |
Other unallocated corporate | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 215 | 265 | 586 | 701 |
North American Full-Service | Total segment | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 3,123 | 3,096 | 9,778 | 9,613 |
North American Limited-Service | Total segment | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 875 | 863 | 2,524 | 2,440 |
Asia Pacific | Total segment | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 275 | 263 | 818 | 756 |
Other International | Total segment | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 561 | $ 591 | $ 1,695 | $ 1,691 |
Business Segments - Segment Pro
Business Segments - Segment Profits (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | $ 570 | $ 790 | $ 1,810 | $ 2,080 |
Interest expense, net of interest income | (81) | (63) | (230) | (191) |
Income taxes | (85) | (253) | (375) | (603) |
NET INCOME | 483 | 485 | 1,491 | 1,345 |
Total segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | 736 | 783 | 2,412 | 2,288 |
Other unallocated corporate | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | (87) | 18 | (316) | (149) |
North American Full-Service | Total segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | 248 | 295 | 919 | 972 |
North American Limited-Service | Total segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | 206 | 255 | 640 | 685 |
Asia Pacific | Total segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | 106 | 93 | 358 | 260 |
Other International | Total segment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment profits | $ 176 | $ 140 | $ 495 | $ 371 |