Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 20, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 339,668,839 | ||
Entity Public Float | $ 36,386,234,246 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
REVENUES | ||||||||||||||
Total revenue | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | |||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Depreciation, amortization, and other | 52 | 58 | 54 | 226 | [1] | 229 | [1] | 119 | [1] | |||||
General, administrative, and other | 221 | 217 | 247 | 927 | [1] | 921 | [1] | 743 | [1] | |||||
Merger-related costs and charges | 12 | 18 | 34 | 155 | 159 | 386 | ||||||||
Costs and Expenses, Total | 4,455 | 4,591 | 4,479 | 18,392 | 17,948 | 13,983 | ||||||||
OPERATING INCOME | 422 | 596 | 818 | 530 | 424 | 790 | 744 | 546 | 2,366 | 2,504 | 1,424 | |||
Gains and other income, net | 18 | 114 | 59 | 194 | [1] | 688 | [1] | 5 | [1] | |||||
Interest expense | (86) | (85) | (75) | (340) | (288) | (234) | ||||||||
Interest income | 5 | 6 | 5 | 22 | [1] | 38 | [1] | 35 | [1] | |||||
Equity in earnings | 61 | 21 | 13 | 103 | [1] | 40 | [1] | 9 | [1] | |||||
INCOME BEFORE INCOME TAXES | 594 | 874 | 532 | 2,345 | 2,982 | 1,239 | ||||||||
Provision for income taxes | (91) | (207) | (112) | (438) | (1,523) | (431) | ||||||||
NET INCOME | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | |||
EARNINGS PER SHARE | ||||||||||||||
Earnings per share - basic (in USD per share) | $ 0.93 | $ 1.45 | $ 1.89 | $ 1.17 | $ 0.31 | $ 1.30 | $ 1.29 | $ 0.96 | $ 5.45 | $ 3.89 | $ 2.78 | |||
Earnings per share - diluted (in USD per share) | $ 0.92 | $ 1.43 | $ 1.87 | $ 1.16 | $ 0.31 | $ 1.29 | $ 1.28 | $ 0.95 | $ 5.38 | $ 3.84 | $ 2.73 | |||
Base management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | $ 279 | $ 300 | $ 273 | $ 1,140 | [1] | $ 1,102 | [1] | $ 806 | [1] | |||||
Franchise fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 502 | 475 | 417 | 1,849 | 1,586 | 1,157 | ||||||||
Incentive management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 649 | [1] | 607 | [1] | 425 | [1] | |||||
Net fee revenues | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,638 | 3,295 | 2,388 | ||||||||
Contract investment amortization | (13) | (13) | (18) | (58) | [1] | (50) | [1] | (40) | [1] | |||||
Total revenue | 919 | 938 | 827 | 3,580 | 3,245 | 2,348 | ||||||||
Owned, leased, and other | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 397 | 423 | 406 | 1,635 | [1] | 1,752 | [1] | 1,125 | [1] | |||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | 315 | 334 | 336 | 1,306 | 1,411 | 901 | ||||||||
Reimbursements | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 3,735 | 4,048 | 3,776 | 15,543 | [1] | 15,455 | [1] | 11,934 | [1] | |||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | $ 3,855 | $ 3,964 | $ 3,808 | $ 15,778 | [1] | $ 15,228 | [1] | $ 11,834 | [1] | |||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 |
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | (391) | 478 | (311) | ||||||||
Derivative instrument adjustments, net of tax | 12 | (14) | 1 | ||||||||
Unrealized (loss) gain on available-for-sale securities, net of tax | 0 | (2) | 2 | ||||||||
Pension and postretirement adjustments, net of tax | (8) | 7 | 5 | ||||||||
Reclassification of losses, net of tax | 17 | 11 | 2 | ||||||||
Total other comprehensive (loss) income, net of tax | (370) | 480 | (301) | ||||||||
Comprehensive income | $ 1,537 | $ 1,939 | $ 507 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets | |||
Cash and equivalents | $ 316 | $ 383 | |
Accounts and notes receivable, net | [1] | 2,133 | 1,973 |
Prepaid expenses and other | [1] | 249 | 235 |
Assets held for sale | 8 | 149 | |
Assets, current, total | 2,706 | 2,740 | |
Property and equipment, net | 1,956 | 1,793 | |
Intangible assets | |||
Intangible assets | 8,380 | 8,544 | |
Goodwill | 9,039 | 9,207 | |
Goodwill and intangible assets, net, total | 17,419 | 17,751 | |
Equity method investments | [1] | 732 | 734 |
Notes receivable, net | 125 | 142 | |
Deferred tax assets | 171 | 93 | |
Other noncurrent assets | [1] | 587 | 593 |
Total assets | 23,696 | 23,846 | |
Current liabilities | |||
Current portion of long-term debt | 833 | 398 | |
Accounts payable | [1] | 767 | 783 |
Accrued payroll and benefits | 1,345 | 1,214 | |
Accrued expenses and other | [1] | 963 | 1,291 |
Liabilities, current, total | 6,437 | 5,807 | |
Long-term debt | 8,514 | 7,840 | |
Deferred tax liabilities | [1] | 485 | 605 |
Other noncurrent liabilities | [1] | 2,372 | 2,610 |
Shareholders’ equity | |||
Class A Common Stock | 5 | 5 | |
Additional paid-in-capital | 5,814 | 5,770 | |
Retained earnings | 8,982 | 7,242 | |
Treasury stock, at cost | (12,185) | (9,418) | |
Accumulated other comprehensive loss | (391) | (17) | |
Shareholder's equity (deficit) | 2,225 | 3,582 | |
Liabilities and deficit, total | 23,696 | 23,846 | |
Brands | |||
Intangible assets | |||
Intangible assets | 5,790 | 5,922 | |
Contract acquisition costs and other | |||
Intangible assets | |||
Intangible assets | [1] | 2,590 | 2,622 |
Guest loyalty program | |||
Current liabilities | |||
Liability for guest loyalty program | 2,529 | 2,121 | |
Contract with customer | 2,932 | 2,819 | |
Deferred revenue | |||
Current liabilities | |||
Contract with customer | $ 731 | $ 583 | |
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
OPERATING ACTIVITIES | ||||
Net income | $ 1,907 | $ 1,459 | ||
Adjustments to reconcile to cash provided by operating activities: | ||||
Depreciation, amortization, and other | 284 | 279 | ||
Share-based compensation | 184 | 181 | ||
Income taxes | (239) | 887 | ||
Contract acquisition costs | (152) | (185) | ||
Merger-related charges | 16 | (124) | ||
Working capital changes | (76) | (30) | ||
(Gain) loss on asset dispositions | (194) | (687) | ||
Other | 107 | 149 | ||
Net cash provided by operating activities | 2,357 | 2,227 | ||
INVESTING ACTIVITIES | ||||
Acquisition of a business, net of cash acquired | 0 | 0 | ||
Capital expenditures | (556) | (240) | ||
Dispositions | 479 | 1,418 | ||
Loan advances | (13) | (93) | ||
Loan collections | 48 | 187 | ||
Other | (10) | (61) | ||
Net cash (used in) provided by investing activities | (52) | 1,211 | ||
FINANCING ACTIVITIES | ||||
Commercial paper/Credit Facility, net | (129) | 60 | ||
Issuance of long-term debt | 1,646 | 0 | ||
Repayment of long-term debt | (397) | (310) | ||
Issuance of Class A Common Stock | 4 | 6 | ||
Dividends paid | (543) | (482) | ||
Purchase of treasury stock | (2,850) | (3,013) | ||
Share-based compensation withholding taxes | (105) | (157) | ||
Other | 0 | 0 | ||
Net cash (used in) provided by financing activities | (2,374) | (3,896) | ||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (69) | (458) | ||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 429 | [1] | 887 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | [1] | 360 | 429 | |
Restricted cash | 44 | 46 | ||
Guest loyalty program | ||||
Adjustments to reconcile to cash provided by operating activities: | ||||
Liability for guest loyalty program | $ 520 | $ 298 | ||
[1] | The 2018 amounts include beginning restricted cash of $46 million at December 31, 2017, and ending restricted cash of $44 million at December 31, 2018, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets. |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Class A Common StockClass A Common Stock | Additional Paid-in- Capital | Retained Earnings | Treasury Stock, at Cost | Accumulated Other Comprehensive Loss | ||
Beginning balance at Dec. 31, 2015 | $ (3,590) | $ 5 | $ 2,821 | $ 4,878 | $ (11,098) | $ (196) | ||
Beginning balance (in shares) at Dec. 31, 2015 | 256,300,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 808 | 808 | ||||||
Total other comprehensive (loss) income, net of tax | (301) | (301) | ||||||
Dividends | (374) | (374) | ||||||
Share-based compensation plans (in shares) | 1,800,000 | |||||||
Share-based compensation plans | 146 | 110 | (21) | 57 | ||||
Purchase of treasury stock | (573) | (573) | ||||||
Purchase of treasury stock (in shares) | (8,000,000) | |||||||
Starwood Combination | [1] | 9,269 | $ 0 | 2,877 | 1,238 | 5,154 | 0 | |
Starwood Combination (in shares) | [1] | 136,000,000 | ||||||
Ending balance at Dec. 31, 2016 | 5,121 | $ 5 | 5,808 | 6,265 | (6,460) | (497) | ||
Ending balance (in shares) at Dec. 31, 2016 | 386,100,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,459 | 1,459 | ||||||
Total other comprehensive (loss) income, net of tax | 480 | 480 | ||||||
Dividends | (482) | (482) | ||||||
Share-based compensation plans (in shares) | 2,200,000 | |||||||
Share-based compensation plans | 29 | (38) | 0 | 67 | ||||
Purchase of treasury stock | (3,025) | (3,025) | ||||||
Purchase of treasury stock (in shares) | (29,200,000) | |||||||
Ending balance at Dec. 31, 2017 | 3,582 | $ 5 | 5,770 | 7,242 | (9,418) | (17) | ||
Ending balance (in shares) at Dec. 31, 2017 | 359,100,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,907 | |||||||
Total other comprehensive (loss) income, net of tax | (370) | (370) | ||||||
Dividends | (543) | (543) | ||||||
Share-based compensation plans (in shares) | 1,500,000 | |||||||
Share-based compensation plans | 86 | 44 | 0 | 42 | ||||
Purchase of treasury stock | (2,809) | (2,809) | ||||||
Purchase of treasury stock (in shares) | (21,500,000) | |||||||
Ending balance at Dec. 31, 2018 | $ 2,225 | $ 5 | $ 5,814 | $ 8,982 | $ (12,185) | $ (391) | ||
Ending balance (in shares) at Dec. 31, 2018 | 339,100,000 | 339,100,000 | [2] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock, authorized (in shares) | 800,000,000 | |||||||
Common stock, par value (in USD per share) | $ 0.01 | |||||||
Preferred stock, authorized (in shares) | 10,000,000 | |||||||
Preferred stock, outstanding (in shares) | 0 | |||||||
[1] | Represents Marriott common stock and equity-based awards issued in the Starwood Combination, which also resulted in the depletion of our accumulated historical losses on reissuances of treasury stock in Retained Earnings. | |||||||
[2] | Our restated certificate of incorporation authorizes 800 million shares of our common stock, with a par value of $.01 per share and 10 million shares of preferred stock, without par value. At year-end 2018, we had 339.1 million of these authorized shares of our common stock and no preferred stock outstanding. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The 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 Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our 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 Consolidated Financial Statements, unless otherwise noted. Preparation of financial statements that conform with U.S. generally accepted accounting principles (“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 at fiscal year-end 2018 and fiscal year-end 2017 and the results of our operations and cash flows for fiscal years 2018 , 2017 , and 2016 . 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, including ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606). See the “New Accounting Standards Adopted” caption in Footnote 2. Summary of Significant Accounting Policies for additional information. In the 2018 fourth quarter, we identified errors related to our Loyalty Program, which resulted in the understatement of cost reimbursement revenue, net of reimbursed expenses in our previously issued financial statements for the 2018 first, second, and third quarters. Correction of the errors resulted in a $99 million increase to net income for the 2018 first three quarters combined. We concluded that the errors were and continue to be immaterial to those financial statements. We adjusted our 2018 first, second, and third quarter information presented in Part II, Item 8 “Supplementary Data” to reflect the correction of the immaterial errors because recording the out of period adjustments would have been material to the 2018 fourth quarter. See Part II, Item 8 “Supplementary Data” for more information. Acquisition of Starwood Hotels & Resorts Worldwide On September 23, 2016 (the “Merger Date”), we completed the acquisition of Starwood Hotels & Resorts Worldwide, LLC, formerly known as Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), through a series of transactions (the “Starwood Combination”), after which Starwood became an indirect wholly-owned subsidiary of Marriott. Accordingly, our Income Statements include Starwood’s results of operations from the Merger Date. See Footnote 3. Dispositions and Acquisitions for more information on the Starwood Combination. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Base Management and Incentive Management Fees : 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. Franchise Fee and Royalty Fee Revenue : 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. Owned and Leased Hotel Revenue : 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. Cost Reimbursements : 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 a combination of fixed fees and variable fees based on sales or other 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.” Other Revenue : Includes Global Design fees, which we describe below, termination fees, and other property and brand revenues. We generally recognize termination fees when collection is probable, and other revenue as services are rendered. Amounts received in advance are deferred as liabilities. 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. 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 or 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 to the applicable governmental agencies on a periodic basis. We do not include these taxes in determining the transaction price. Loyalty Program . Loyalty Program members earn points based on the money they spend at our hotels; purchases of timeshare interval, fractional ownership, and residential products; and through participation in travel experiences and affiliated partners’ programs, such as those offered by credit card, car rental, and airline companies. Members can redeem points, which we track on their behalf, for stays at most of our hotels, airline tickets, airline frequent flyer program miles, rental cars, and a variety of other awards. Points cannot be redeemed for cash. 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 breakage 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 on 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 institution that issues 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 $146 million , to $831 million at December 31, 2018 from $685 million at December 31, 2017 , primarily as a result of our Global Design, co-brand credit card, and application and relicensing activities described in the “ Revenue Recognition ” caption above. Our current and noncurrent Loyalty Program liability increased by $521 million , to $5,461 million at December 31, 2018 from $4,940 million at December 31, 2017 , primarily reflecting an increase in points earned, partially offset by deferred revenue of $1,897 million that we recognized in 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 expenses ” caption of our Income Statements. We had capitalized costs to fulfill contracts with customers of $324 million at December 31, 2018 and $295 million at December 31, 2017 . See Footnote 12. Intangible Assets and Goodwill for information on capitalized costs incurred to obtain contracts with customers. Real Estate Sales We recognize a gain or loss on real estate transactions when control of the asset transfers to the buyer, generally at the time the sale closes. In sales transactions where we retain a management contract, the terms and conditions of the management contract are generally comparable to the terms and conditions of the management contracts obtained directly with third-party owners in competitive processes. Profit Sharing Plan We contribute to tax-qualified retirement plans for the benefit of U.S. employees who meet certain eligibility requirements and choose to participate in the plans. Participating employees specify the percentage or amount of salary they wish to contribute from their compensation, and the Company typically makes discretionary and certain other matching or supplemental contributions. We recognized compensation costs from Company contributions of $224 million in 2018 , $119 million in 2017 , and $91 million in 2016 . Non-U.S. Operations The U.S. dollar is the functional currency of our consolidated and unconsolidated entities operating in the U.S. The functional currency of our consolidated and unconsolidated entities operating outside of the U.S. is generally the principal currency of the economic environment in which the entity primarily generates and expends cash. We translate the financial statements of consolidated entities whose functional currency is not the U.S. dollar into U.S. dollars, and we do the same, as needed, for unconsolidated entities whose functional currency is not the U.S. dollar. We translate assets and liabilities at the exchange rate in effect as of the financial statement date and translate income statement accounts using the weighted average exchange rate for the period. We include translation adjustments from currency exchange and the effect of exchange rate changes on intercompany transactions of a long-term investment nature as a separate component of shareholders’ equity. We report gains and losses from currency exchange rate changes for intercompany receivables and payables that are not of a long-term investment nature, as well as for third-party transactions, currently in operating costs and expenses. Share-Based Compensation Our share-based compensation awards primarily consist of restricted stock units (“RSUs”). We measure compensation costs for our share-based payment transactions at fair value on the grant date, and we recognize those costs in our Financial Statements over the vesting period during which the employee provides service in exchange for the award. Advertising Costs We expense costs to produce advertising as they are incurred and to communicate advertising as the communication occurs and record such amounts in reimbursed expenses to the extent undertaken on behalf of our owners and franchisees. We recognized advertising costs of $660 million in 2018 , $562 million in 2017 , and $409 million in 2016 . Income Taxes We record the amounts of taxes payable or refundable for the current year, as well as deferred tax liabilities and assets for the future tax consequences of events we have recognized in our Financial Statements or tax returns, using judgment in assessing future profitability and the likely future tax consequences of those events. We base our estimates of deferred tax assets and liabilities on current tax laws, rates and interpretations, and, in certain cases, business plans and other expectations about future outcomes. We develop our estimates of future profitability based on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We generally recognize the effect of the tax law changes in the period of enactment. Changes in existing tax laws and rates, their related interpretations, and the uncertainty generated by the current economic environment may affect the amounts of our deferred tax liabilities or the valuations of our deferred tax assets over time. Our accounting for deferred tax consequences represents management’s best estimate of future events that can be appropriately reflected in the accounting estimates. For tax positions we have taken or expect to take in a tax return, we apply a more likely than not threshold, under which we must conclude a tax position is more likely than not to be sustained, assuming that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information, to continue to recognize the benefit. In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold. We recognize accrued interest and penalties for our unrecognized tax benefits as a component of tax expense. See Footnote 6. Income Taxes for further information. Cash and Equivalents We consider all highly liquid investments with an initial maturity of three months or less at date of purchase to be cash equivalents. Accounts Receivable Our accounts receivable primarily consist of amounts due from hotel owners with whom we have management and franchise agreements and include reimbursements of costs we incurred on behalf of managed and franchised properties. We generally collect these receivables within 30 days. We record an accounts receivable reserve when losses are probable, based on an assessment of historical collection activity and current business conditions. Our accounts receivable reserve was $66 million at year-end 2018 and $46 million at year-end 2017 . Assets Held for Sale We consider properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we expect the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and we cease depreciation. Goodwill We test goodwill for potential impairment at least annually in the fourth quarter, or more frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the net assets of the reporting unit. In evaluating goodwill for impairment, we may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. If we bypass the qualitative assessment, or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount. We calculate the estimated fair value of a reporting unit using a weighting of the income and market approaches. For the income approach, we use internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. For the market approach, we use internal analyses based primarily on market comparables. We base these assumptions on our historical data and experience, third-party appraisals, industry projections, micro and macro general economic condition projections, and our expectations. We have had no goodwill impairment charges for the last three fiscal years. Intangibles and Long-Lived Assets We assess indefinite-lived intangible assets for potential impairment and continued indefinite use annually, or more frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. Like goodwill, we may first assess qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible is less than its carrying amount. If the carrying value of the asset exceeds the fair value, we recognize an impairment loss in the amount of that excess. We test definite-lived intangibles and long-lived asset groups for recoverability when changes in circumstances indicate that we may not be able to recover the carrying value; for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. We also test recoverability when management has committed to a plan to sell or otherwise dispose of an asset group and we expect to complete the plan within a year. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect the asset group will generate. If the comparison indicates that we will not be able to recover the carrying value of an asset group, we recognize an impairment loss for the amount by which the carrying value exceeds the estimated fair value. When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life. We calculate the estimated fair value of an intangible asset or asset group using the income approach or the market approach. We utilize the same assumptions and methodology for the income approach that we describe in the “ Goodwill ” caption. For the market approach, we use internal analyses based primarily on market comparables and assumptions about market capitalization rates, growth rates, and inflation. Investments We hold equity interests in ventures established to develop or acquire and own hotel properties or that otherwise support our hospitality operations. We account for these investments as either an equity method investment, a financial asset, or a controlled subsidiary. We apply the equity method of accounting if we have significant influence over the entity, typically when we hold 20 percent of the voting common stock (or equivalent) of an investee but do not have a controlling financial interest. In certain circumstances, such as with investments in limited liability or limited partnerships, we apply the equity method of accounting when we own as little as three to five percent. We account for financial assets at fair value if it is readily determinable, or using the fair value alternative method, whereby investments are measured at cost less impairment, adjusted for observable price changes. We consolidate entities that we control. When we acquire an investment that qualifies for the equity method of accounting, we determine the acquisition date fair value of the identifiable assets and liabilities. If our carrying amount exceeds our proportional share in the equity of the investee, we amortize the difference on a straight-line basis over the underlying assets’ estimated useful lives when calculating equity method earnings attributable to us, excluding the difference attributable to land, which we do not amortize. We evaluate an investment for impairment when circumstances indicate that we may not be able to recover the carrying value. When evaluating our ventures, we consider loan defaults, significant underperformance relative to historical or projected operating performance, or significant negative industry or economic trends. Additionally, a venture’s commitment to a plan to sell some or all of its assets could cause us to evaluate the recoverability of the venture’s individual long-lived assets and possibly the venture itself. We impair investments we account for using the equity method of accounting when we determine that there has been an “other-than-temporary” decline in the venture’s estimated fair value compared to its carrying value. We perform qualitative assessments for investments we account for using the fair value alternative method and we record any associated impairment when the fair value is less than the carrying value. Under the accounting guidance for the consolidation of variable interest entities, we analyze our variable interests, including equity investments, loans, and guarantees, to determine if an entity in which we have a variable interest is a variable interest entity. Our analysis includes both quantitative and qualitative reviews. We base our quantitative analysis on the forecasted cash flows of the entity, and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. We also use our qualitative analysis to determine if we must consolidate a variable interest entity as its primary beneficiary. Fair Value Measurements We have various financial instruments we must measure at fair value on a recurring basis, including certain marketable securities and derivatives. See Footnote 15. Fair Value of Financial Instruments for further information. We also apply the provisions of fair value measurement to various nonrecurring measurements for our financial and nonfinancial assets and liabilities. Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the following three levels of the fair value hierarchy: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 includes unobservable inputs that reflect our assumptions about what factors market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data. Derivative Instruments We record derivatives at fair value. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how we reflect the change in fair value of the derivative instrument in our Financial Statements. A derivative qualifies for hedge accounting if, at inception, we expect the derivative will be highly effective in offsetting the underlying hedged cash flows or fair value and we fulfill the hedge documentation standards at the time we enter into the derivative contract. We designate a hedge as a cash flow hedge, fair value hedge, or a net investment in non-U.S. operations hedge based on the exposure we are hedging. For the effective portion of qualifying cash flow hedges, we record changes in fair value in other comprehensive income (“OCI”). We release the derivative’s gain or loss from OCI to match the timing of the underlying hedged items’ effect on earnings. We review the effectiveness of our hedging instruments quarterly, recognize current period hedge ineffectiveness immediately in earnings, and discontinue hedge accounting for any hedge that we no longer consider to be highly effective. We recognize changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting in current period earnings. Upon termination of cash flow hedges, we release gains and losses from OCI based on the timing of the underlying cash flows or revenue recognized, unless the termination results from the failure of the intended transaction to occur in the expected time frame. Such untimely transactions require us to immediately recognize in earnings the gains and/or losses that we previously recorded in OCI. Changes in interest rates, currency exchange rates, and equity securities expose us to market risk. We manage our exposure to these risks by monitoring available financing alternatives, as well as through development and application of credit granting policies. We also use derivative instruments, including cash flow hedges, net investment in non-U.S. operations hedges, fair value hedges, and other derivative instruments, as part of our overall strategy to manage our exposure to market risks. As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk, and we do not use derivatives for trading or speculative purposes. Loan Loss Reserves We may make senior, mezzanine, and other loans to owners of hotels that we operate or franchise, generally to facilitate the development of a hotel and sometimes to facilitate brand programs or initiatives. We expect the owners to repay the loans in accordance with the loan agreements, or earlier as the hotels mature and capital markets permit. We use metrics such as loan-to-value ratios and debt service coverage, and other information about collateral and from third party rating agencies to assess the credit quality of the loan receivable, both upon entering into the loan agreement and on an ongoing basis as applicable. On a regular basis, we individually assess loans for impairment. We use internally generated cash flow projections to determine if we expect the loans will be repaid under the terms of the loan agreements. If we conclude that it is probable a borrower will not repay a loan in accordance with its terms, we consider the loan impaired and begin recognizing interest income on a cash basis. To measure impairment, we calculate the present value of expected future cash flows discounted at the loan’s original effective interest rate or the estimated fair value of the collateral. If the present value or the estimated collateral is less than the carrying value of the loan receivable, we establish a specific impairment reserve for the difference. If it is likely that a loan will not be collected based on financial or other business indicators, including our historical experience, our policy is to charge off the loan in the quarter in which we deem it uncollectible. Guarantees We measure and record our liability for the fair value of a guarantee on a nonrecurring basis, that is when we issue or modify a guarantee, using Level 3 internally developed inputs, as described above in this footnote under the heading “ Fair Value Measurements .” We base our calculation of the estimated fair value of a guarantee on the income approach or the market approach, depending on the type of guarantee. For the income approach, we use internally developed discounted cash flow and Monte Carlo simulation models that include the following assumptions, among others: projections of revenues and expenses and related cash flows based on assumed growth rates and demand trends; historical volatility of projecte |
DISPOSITIONS AND ACQUISITIONS
DISPOSITIONS AND ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
DISPOSITIONS AND ACQUISITIONS | DISPOSITIONS AND ACQUISITIONS Dispositions In 2018, we sold the following properties and recognized total gains of $132 million in the “Gains and other income, net” caption of our Income Statements: • The Tremont Chicago Hotel at Magnificent Mile and Le Centre Sheraton Montreal Hotel, two North American Full-Service properties; • The Westin Denarau Island Resort and The Sheraton Fiji Resort, two Asia Pacific properties; and • The Sheraton Buenos Aires Hotel & Convention Center and Park Tower, A Luxury Collection Hotel, Buenos Aires, two Caribbean and Latin America properties. In 2018, 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 2018, a Caribbean and Latin America investee sold the JW Marriott Mexico City, and a North American Full-Service investee sold The Ritz-Carlton Toronto, and we recorded our share of the gains of $55 million and $10 million , respectively, in the “Equity in earnings” caption of our Income Statements. In 2017 , we sold the following three North American Full-Service properties: • The Sheraton Centre Toronto Hotel that was owned on a long-term ground lease; • The Westin Maui that was owned on a long-term ground lease; and • The Charlotte Marriott City Center and recognized a $24 million gain in the “ Gains and other income, net ” caption of our Income Statements. In 2017, Aramark purchased Avendra LLC, in which we had a 55 percent ownership interest. We recorded a non-recurring pre-tax gain of $659 million in 2017 and $5 million in 2018, which we reflected in the “ Gains and other income, net ” caption of our Income Statements. After cash paid for income taxes, the gain totaled $425 million . We committed to the owners of the hotels in our system that the benefits derived from Avendra, including any dividends or sale proceeds above our original investment, would be used for the benefit of the hotels in our system. Spending funded by the sale proceeds, which we present in the “Reimbursed expenses” caption of our Income Statements, totaled $115 million ( $85 million after-tax) in 2018. In conjunction with the sale of Avendra to Aramark, we entered into a new five -year procurement services agreement with Avendra for the benefit of our managed and owned properties in North America. In 2016, we sold The St. Regis San Francisco, a North American Full-Service property. Acquisitions In 2018 , we purchased the Sheraton Grand Phoenix, a North American Full-Service property that we manage, for $255 million . 2016 Starwood Combination The following table presents the fair value of each type of consideration that we transferred in the Starwood Combination: (in millions, except per share amounts) Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares 134.4 Marriott common stock price as of Merger Date $ 68.44 Fair value of Marriott common stock issued in exchange for Starwood outstanding shares 9,198 Cash consideration to Starwood shareholders, net of cash acquired of $1,116 2,412 Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards 71 Total consideration transferred, net of cash acquired $ 11,681 Fair Values of Assets Acquired and Liabilities Assumed . The following table presents our fair value estimates of the assets that we acquired and the liabilities that we assumed on the Merger Date: ($ in millions) September 23, 2016 (as finalized) Working capital $ (236 ) Property and equipment, including assets held for sale 1,706 Identified intangible assets 7,238 Equity and cost method investments 537 Other noncurrent assets 200 Deferred income taxes, net (1,464 ) Guest loyalty program (1,638 ) Debt (1,877 ) Other noncurrent liabilities (977 ) Net assets acquired 3,489 Goodwill (1) 8,192 $ 11,681 (1) Goodwill primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined operations, and it is not deductible for tax purposes. We estimated the value of the acquired property and equipment using a combination of the income, cost, and market approaches, which are primarily based on significant Level 2 and Level 3 assumptions, such as estimates of future income growth, capitalization rates, discount rates, and capital expenditure needs of the hotel properties. Our equity method investments consist primarily of partnership and joint venture interests in entities that own hotel real estate. We estimated the value of the underlying real estate using the same methods as for property and equipment described above. We primarily valued debt using quoted market prices, which are considered Level 1 inputs as they are observable in the market. The following table presents our estimates of the fair values of Starwood’s identified intangible assets and their related estimated useful lives. Estimated Fair Value Estimated Useful Life Brands $ 5,664 indefinite Management Agreements and Lease Contract Intangibles 751 10 - 25 Franchise Agreements 746 10 - 80 Loyalty Program Marketing Rights 77 30 $ 7,238 We estimated the value of Starwood’s brands using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value. We estimated the value of management and franchise agreements using the multi-period excess earnings method, which is a variation of the income approach. This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset. We valued the lease contract intangibles using an income approach. These valuation approaches utilize Level 3 inputs. Pro Forma Results of Operations . We prepared unaudited pro forma information in accordance with applicable accounting standards, assuming we completed the Starwood Combination on January 1, 2015, and using our estimates of the fair values of assets and liabilities as of the Merger Date. Pro forma revenues totaled $22,492 million in 2016. Pro forma net income totaled $1,180 million in 2016, and reflected $113 million of integration costs. These unaudited pro forma results do not reflect any synergies from operating efficiencies, and they are not necessarily indicative of what the actual results of operations of the combined company would have been if the Starwood Combination had occurred on January 1, 2015, nor are they indicative of future results of operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The table below illustrates the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share: (in millions, except per share amounts) 2018 2017 2016 Computation of Basic Earnings Per Share Net income $ 1,907 $ 1,459 $ 808 Shares for basic earnings per share 350.1 375.2 290.9 Basic earnings per share $ 5.45 $ 3.89 $ 2.78 Computation of Diluted Earnings Per Share Net income $ 1,907 $ 1,459 $ 808 Shares for basic earnings per share 350.1 375.2 290.9 Effect of dilutive securities Share-based compensation 4.1 4.7 4.8 Shares for diluted earnings per share 354.2 379.9 295.7 Diluted earnings per share $ 5.38 $ 3.84 $ 2.73 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION RSUs and PSUs We granted RSUs in 2018 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. Upon vesting, RSUs convert to shares of our common stock which we distribute from treasury shares. We also granted performance-based RSUs (“PSUs”) in 2018 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. We had deferred compensation costs for RSUs of approximately $167 million at year-end 2018 and $164 million at year-end 2017 . The weighted average remaining term for RSUs outstanding at year-end 2018 was two years. The following table provides additional information on RSUs for the last three fiscal years: 2018 2017 2016 Share-based compensation expense (in millions) $ 170 $ 172 $ 204 Weighted average grant-date fair value (per RSU) $ 132 $ 85 $ 66 Aggregate intrinsic value of distributed RSUs (in millions) $ 294 $ 322 $ 190 The following table presents the changes in our outstanding RSUs, including PSUs, during 2018 and the associated weighted average grant-date fair values: Number of RSUs (in millions) Weighted Average Grant-Date Fair Value (per RSU) Outstanding at year-end 2017 5.6 $ 71 Granted 1.5 132 Distributed (2.1 ) 69 Forfeited (0.2 ) 93 Outstanding at year-end 2018 4.8 $ 90 Other Information At year-end 2018 , we had 31 million remaining shares authorized under the Marriott and Starwood stock plans. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of our earnings before income taxes for the last three fiscal years consisted of: ($ in millions) 2018 2017 2016 U.S. $ 1,311 $ 2,153 $ 888 Non-U.S. 1,034 829 351 $ 2,345 $ 2,982 $ 1,239 Our provision for income taxes for the last three fiscal years consists of: ($ in millions) 2018 2017 2016 Current -U.S. Federal $ (169 ) $ (1,253 ) $ (203 ) -U.S. State (94 ) (152 ) (41 ) -Non-U.S. (284 ) (178 ) (56 ) (547 ) (1,583 ) (300 ) Deferred -U.S. Federal 10 61 (80 ) -U.S. State (6 ) (33 ) (17 ) -Non-U.S. 105 32 (34 ) 109 60 (131 ) $ (438 ) $ (1,523 ) $ (431 ) Our tax provision included an excess tax benefit of $42 million in 2018 and $72 million in 2017 related to the vesting or exercise of share-based awards. Our tax provision did not reflect excess tax benefits of $32 million in 2016 , as this period occurred before our adoption of ASU 2016-09. In our Statements of Cash Flows, we presented excess tax benefits as financing cash flows before our adoption of ASU 2016-09. Unrecognized Tax Benefits The following table reconciles our unrecognized tax benefit balance for each year from the beginning of 2016 to the end of 2018 : ($ in millions) Amount Unrecognized tax benefit at beginning of 2016 $ 24 Additions from Starwood Combination 387 Change attributable to tax positions taken in prior years (3 ) Change attributable to tax positions taken during the current period 16 Decrease attributable to settlements with taxing authorities (2 ) Decrease attributable to lapse of statute of limitations (1 ) Unrecognized tax benefit at year-end 2016 421 Change attributable to tax positions taken in prior years 12 Change attributable to tax positions taken during the current period 87 Decrease attributable to settlements with taxing authorities (28 ) Decrease attributable to lapse of statute of limitations (1 ) Unrecognized tax benefit at year-end 2017 491 Change attributable to tax positions taken in prior years 37 Change attributable to tax positions taken during the current period 148 Decrease attributable to settlements with taxing authorities (53 ) Unrecognized tax benefit at year-end 2018 $ 623 Our unrecognized tax benefit balances included $497 million at year-end 2018 , $385 million at year-end 2017 , and $288 million at year-end 2016 of tax positions that, if recognized, would impact our effective tax rate. It is reasonably possible that we will settle $243 million of unrecognized tax benefits within the next twelve months. This includes $210 million of U.S. federal issues that are currently in appeals and $33 million of state and non-U.S. audits we expect to resolve in 2019 . We recognize accrued interest and penalties for our unrecognized tax benefits as a component of tax expense. Related interest totaled $3 million in 2018 , $24 million in 2017 , and $8 million in 2016 . We file income tax returns, including returns for our subsidiaries, in various jurisdictions around the world. The U.S. Internal Revenue Service (“IRS”) has examined our federal income tax returns, and as of year-end 2018 , we have settled all issues for tax years through 2013 for Marriott and through 2009 for Starwood. Our Marriott 2014 and 2015 tax year audits are substantially complete, and our Marriott 2016 through 2018 tax year audits are currently ongoing. Starwood is currently under audit by the IRS for years 2010 through 2016. Various foreign, state, and local income tax returns are also under examination by the applicable taxing authorities. Deferred Income Taxes Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carry-forwards. We state those balances at the enacted tax rates we expect will be in effect when we pay or recover the taxes. Deferred income tax assets represent amounts available to reduce income taxes we will pay on taxable income in future years. We evaluate our ability to realize these future tax deductions and credits by assessing whether we expect to have sufficient future taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings, and available tax planning strategies to utilize these future deductions and credits. We establish a valuation allowance when we no longer consider it more likely than not that a deferred tax asset will be realized. The following table presents the tax effect of each type of temporary difference and carry-forward that gave rise to significant portions of our deferred tax assets and liabilities as of year-end 2018 and year-end 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Deferred Tax Assets Employee benefits $ 261 $ 264 Net operating loss carry-forwards 494 376 Accrued expenses and other reserves 160 161 Receivables, net 12 21 Tax credits 24 27 Loyalty Program 133 31 Deferred income 56 17 Self-insurance — 12 Other 13 2 Deferred tax assets 1,153 911 Valuation allowance (428 ) (309 ) Deferred tax assets after valuation allowance 725 602 Deferred Tax Liabilities Joint venture interests (59 ) (33 ) Property and equipment (85 ) (62 ) Intangibles (876 ) (1,019 ) Self-insurance (19 ) — Deferred tax liabilities (1,039 ) (1,114 ) Net deferred taxes $ (314 ) $ (512 ) Our valuation allowance is attributable to non-U.S. and U.S. state net operating loss carry forwards. During 2018 , our valuation allowance increased primarily due to net operating losses in Luxembourg. At year-end 2018 , we had approximately $11 million of tax credits that will expire through 2025 and $13 million of tax credits that do not expire. We recorded $10 million of net operating loss benefits in 2018 and $6 million in 2017 . At year-end 2018 , we had approximately $2,595 million of primarily state and foreign net operating losses, of which $1,712 million will expire through 2038 . Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate The following table reconciles the U.S. statutory tax rate to our effective income tax rate for the last three fiscal years: 2018 2017 2016 U.S. statutory tax rate 21.0 % 35.0 % 35.0 % U.S. state income taxes, net of U.S. federal tax benefit 2.5 3.1 3.0 Non-U.S. income (1.0 ) (7.3 ) (6.1 ) Change in valuation allowance 2.6 2.0 0.3 Change in uncertain tax positions 1.0 2.2 1.4 Change in U.S. tax rate (1.7 ) (5.5 ) 0.0 Transition Tax on foreign earnings 0.1 22.8 0.0 Tax on asset dispositions (2.9 ) (0.2 ) 0.0 Excess tax benefits related to equity awards (1.8 ) (2.4 ) 0.0 Other, net (1.1 ) 1.4 1.2 Effective rate 18.7 % 51.1 % 34.8 % The non-U.S. income tax benefit presented in the table above includes tax-exempt income in Hong Kong, a tax rate incentive in Singapore, a deemed interest deduction in Switzerland, and tax-exempt income earned from certain operations in Luxembourg, which collectively represented 3.4% in 2018 , 6.2% in 2017 , and 7.4% in 2016 . We included the impact of these items in the foreign tax rate differential line above because we consider them to be equivalent to a reduction of the statutory tax rates in these jurisdictions. Pre-tax income in Switzerland, Singapore, Hong Kong, and Luxembourg totaled $432 million in 2018 , $576 million in 2017 , and $271 million in 2016 . The non-U.S. income tax benefit also includes 1.4% of U.S. income tax expense on non-U.S. operations. We included the impact of this tax in the non-U.S. income line above because we consider this tax to be an integral part of the foreign taxes. Other Information We paid cash for income taxes, net of refunds of $678 million in 2018 , $636 million in 2017 , and $293 million in 2016 . Tax Cuts and Jobs Act of 2017 The U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was enacted on December 22, 2017. The SEC had provided accounting and reporting guidance that allowed us to report provisional amounts within a measurement period up to one year from the enactment date. Complexities inherent in adopting the changes included additional guidance, interpretations of the law, and further analysis of data and tax positions. In 2018, we completed the accounting associated with the 2017 Tax Act as further described below. 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 recorded a provisional estimated net tax benefit of $153 million for our year-end deferred tax assets and liabilities. In 2018, we completed our analyses of all impacts of the 2017 Tax Act, including, but not limited to, our calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences, and recognized a tax benefit of $44 million . Deemed Repatriation Transition Tax . The Deemed Repatriation Tax (“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 also resulted in additional state income taxes in some of the U.S. states in which we operate. In 2017, we recorded a provisional estimated federal and state Transition Tax expense of $745 million . In 2018, we finalized our preliminary calculation and recorded a charge of $3 million , which includes a benefit of $5 million resulting from changes to E&P as a result of completing an IRS audit. Substantially all of our unremitted foreign earnings that have not been previously taxed have now been subjected to U.S. taxation under the Transition Tax. In 2018, we recorded a charge of $29 million for state tax liability on unremitted accumulated earnings. We have made no additional provision for U.S. income taxes or additional non-U.S. taxes on the remaining unremitted accumulated earnings of our non-U.S. subsidiaries. It is not practical at this time to determine the income tax liability related to any remaining undistributed earnings or additional basis difference not subject to the Transition Tax. Other provisions . The 2017 Tax Act also included a new provision designed to tax GILTI. We adopted the period cost method and recorded a current provision for GILTI tax related to current-year operations in our annual effective tax rate. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Guarantees We issue guarantees to certain lenders and hotel owners, chiefly to obtain long-term management contracts. The guarantees generally have a stated maximum funding amount and a term of three to ten years. The terms of guarantees to lenders generally require us to fund if cash flows from hotel operations are inadequate to cover annual debt service or to repay the loan at maturity. The terms of the guarantees to hotel owners generally require us to fund if the hotels do not attain specified levels of operating profit. Guarantee fundings to lenders and hotel owners are generally recoverable out of future hotel cash flows and/or proceeds from the sale of hotels. We also enter into project completion guarantees with certain lenders in conjunction with hotels that we or our joint venture partners are building. We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at year-end 2018 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 125 $ 17 Operating profit 212 100 Other 9 2 $ 346 $ 119 Our liability at year-end 2018 for guarantees for which we are the primary obligor is reflected in our Balance Sheets as $23 million of “Accrued expenses and other” and $96 million of “Other noncurrent liabilities.” Our guarantees listed in the preceding table include $3 million of debt service guarantees, $32 million of operating profit guarantees, and $2 million of other guarantees that will not be in effect until the underlying properties open and we begin to operate the properties or certain other events occur. In conjunction with financing obtained for specific projects or properties owned by us or joint ventures in which we are a party, we may provide industry standard indemnifications to the lender for loss, liability, or damage occurring as a result of the actions of the other joint venture owner or our own actions. 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 year-end 2018 was $57 million . We concluded that the entity that owns the Sheraton Grand Chicago hotel is a variable interest entity. We did not consolidate the entity because we do not have the power to direct the activities that most significantly impact the entity’s economic performance. Our maximum exposure to loss related to the entity is equal to the difference between the purchase price and the fair value of the hotel at the time that the put option is exercised, plus the maximum funding amount of an operating profit guarantee that we provided for the hotel. Commitments At year-end 2018 , we had the following commitments outstanding, which are not recorded on our Balance Sheets: • We had a right and, under certain circumstances, an obligation to acquire our joint venture partner’s remaining interests in two joint ventures at a price based on the performance of the ventures. In the 2019 first quarter, we accelerated our option to acquire our partner’s interests. We expect to account for the transaction primarily as an acquisition of brand and contract assets. • Investment commitments totaling up to $11 million of equity for non-controlling interests in real estate and travel technology-related entities. We expect to invest up to $3 million in 2019 and $6 million thereafter. We do not expect to fund the remaining commitments. • Various loan commitments totaling $14 million , of which we expect to fund $5 million in 2019 and $5 million thereafter. We do not expect to fund the remaining commitments. • Various commitments to purchase information technology hardware, software, accounting, finance, and maintenance services in the normal course of business, primarily for programs and services for which we are reimbursed by third-party owners, totaling $286 million . We expect to purchase goods and services subject to these commitments as follows: $153 million in 2019 , $78 million in 2020 , $38 million in 2021 , and $17 million thereafter. • Several commitments aggregating $33 million , which we do not expect to fund. Letters of Credit At year-end 2018 , we had $136 million of letters of credit outstanding (all outside the Credit Facility, as defined in Footnote 10. Long-Term Debt ), most of which were for our self-insurance programs. Surety bonds issued as of year-end 2018 totaled $152 million , most of which state governments requested in connection with our self-insurance programs. Data Security Incident Description of Event On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the “Data Security Incident”). Working with leading security experts, we determined that there was unauthorized access to the Starwood network since 2014 and that an unauthorized party had copied information from the Starwood reservations database and taken steps towards removing it. While our forensic review of the incident is now complete, certain data analytics work continues. We have completed the planned phase out of the operation of the Starwood reservations database, effective as of the end of 2018 . Expenses and Insurance Recoveries In 2018, we recorded $28 million of expenses related to the Data Security Incident, partially offset by $25 million of accrued insurance recoveries, which we recorded in either the “Reimbursed expenses” or “ Merger-related costs and charges ” captions of our Income Statements. Expenses primarily included costs to investigate the Data Security Incident and customer care costs. We recognize insurance recoveries when they are probable of receipt and present them in our Income Statements in the same caption as the related loss, up to the amount of loss. Litigation, Claims, and Government Investigations To date, approximately 100 putative class action lawsuits have been filed by consumers and others against us in U.S. federal, U.S. state and Canadian courts related to the Data Security Incident. The plaintiffs in these cases, who purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief and other related relief. On February 6, 2019, the U.S. Judicial Panel on Multidistrict Litigation (MDL) issued an order consolidating the U.S. cases filed to that date and transferring them all to the U.S. District Court for the District of Maryland. A putative class action lawsuit was filed against us and certain of our current officers and directors on December 1, 2018 in the U.S. District Court for the Eastern District of New York alleging violations of the federal securities laws in connection with statements regarding our cybersecurity systems and controls. The complaint seeks certification of a class of affected persons and unspecified monetary damages, costs and attorneys’ fees. This case is also covered by the MDL order. A shareholder derivative complaint was also filed against the Company and each of the members of our Board of Directors on February 26, 2019 in the U.S. District Court for the Southern District of New York alleging, among other claims, breach of fiduciary duty, corporate waste, mismanagement and violations of the federal securities laws. This case has not yet been consolidated as part of the MDL proceeding. We dispute the allegations in the complaints described above and intend to defend vigorously against such claims. In addition, numerous U.S. federal, U.S. state and foreign governmental authorities are investigating, or otherwise seeking information and/or documents related to, the Data Security Incident and related matters, including Attorneys General offices from all 50 states and the District of Columbia, the Federal Trade Commission, the Securities and Exchange Commission, certain committees of the U.S. Senate and House of Representatives, the Information Commissioner’s Office in the United Kingdom (“ICO”) as lead supervisory authority in the European Economic Area, and regulatory authorities in other jurisdictions, including Germany. Following the Data Security Incident, the ICO notified us that it had opened an investigation into the Company’s online privacy policy and related practices. This investigation is separate from the ICO’s investigation related to the Data Security Incident. While we believe it is reasonably possible that we may incur losses associated with the above described proceedings and investigations, it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings and investigations based on the early stage of these proceedings and investigations, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and the lack of resolution of significant factual and legal issues. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
LEASES | LEASES The following table presents our future minimum lease obligations for which we are the primary obligor as of year-end 2018 : ($ in millions) Operating Leases Capital Leases 2019 $ 171 $ 13 2020 170 13 2021 145 13 2022 153 13 2023 139 13 Thereafter 1,295 165 Total minimum lease payments where we are the primary obligor $ 2,073 $ 230 Less: Amount representing interest 67 Present value of minimum lease payments $ 163 Most leases have initial terms of up to 20 years, contain one or more renewals at our option, generally for five - or 10 -year periods, and generally contain fixed and variable components. The variable components of leases of land or building facilities are primarily based on operating performance of the leased property. The following table details the composition of rent expense for operating leases for the last three years: ($ in millions) 2018 2017 2016 Minimum rentals $ 192 $ 194 $ 150 Additional rentals 83 85 67 $ 275 $ 279 $ 217 |
SELF-INSURANCE RESERVE FOR LOSS
SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Self-Insurance Reserve for Losses and Loss Adjustment Expenses Disclosure [Abstract] | |
SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES | SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES The following table summarizes the activity in our self-insurance reserve for losses and loss adjustment expenses as of year-end 2018 and 2017 : ($ in millions) 2018 2017 Balance at beginning of year $ 487 $ 493 Less: Reinsurance recoverable (3 ) (3 ) Net balance at beginning of year 484 490 Incurred related to: Current year 151 160 Prior years (37 ) (59 ) Total incurred 114 101 Paid related to: Current year (32 ) (30 ) Prior years (96 ) (77 ) Total paid (128 ) (107 ) Net balance at end of year 470 484 Add: Reinsurance recoverable 7 3 Balance at end of year $ 477 $ 487 Current portion classified in “Accrued expenses and other” $ 126 $ 112 Noncurrent portion classified in “Other noncurrent liabilities” 351 375 $ 477 $ 487 We decreased our provision for incurred losses for prior years by $37 million in 2018 and by $59 million in 2017 because of changes in estimates from insured events from prior years due to changes in underwriting experience and frequency and severity trends. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Senior Notes: Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 $ 600 $ 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 349 348 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 188 197 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 443 — Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020 547 — Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023 347 — Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028 297 — Commercial paper 2,245 2,371 Credit Facility — — Capital lease obligations 163 171 Other 223 279 $ 9,347 $ 8,238 Less: Current portion of long-term debt (833 ) (398 ) $ 8,514 $ 7,840 All our long-term debt is recourse to us but unsecured. All the Senior Notes shown in the table above are our unsecured and unsubordinated obligations, which rank equally with our other Senior Notes and all other unsecured and unsubordinated indebtedness that we have issued or will issue from time to time, and are governed by the terms of an indenture, dated as of November 16, 1998, between us and The Bank of New York Mellon (formerly The Bank of New York), as trustee. With the exception of the floating rate Series Y Notes, we may redeem some or all of each series of the Senior Notes before maturity under the terms provided in the applicable form of Senior Note. 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 earlier in this report in the “Liquidity and Capital Resources” section of Item 7 above for further information on our Credit Facility and available borrowing capacity at December 31, 2018 . In the 2018 fourth quarter, we issued $550 million aggregate principal amount of three-month LIBOR plus 0.600 percent Series Y Notes due December 1, 2020 (the “Series Y Notes”), $350 million aggregate principal amount of 4.150 percent Series Z Notes due December 1, 2023 (the “Series Z Notes”), and $300 million aggregate principal amount of 4.650 percent Series AA Notes due December 1, 2028 (the “Series AA Notes”). We will pay interest on the Series Y Notes on March 1, June 1, September 1, and December 1 of each year, commencing on March 1, 2019, and will pay interest on the Series Z Notes and the Series AA Notes on June 1 and December 1 of each year, commencing on June 1, 2019. We received net proceeds of approximately $1,190 million from the offering of the Series Y Notes, the Series Z Notes, and the Series AA Notes, after deducting the underwriting discount and estimated expenses. 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 $443 million from the offering of the Series X Notes, after deducting the underwriting discount and estimated expenses. The proceeds from our 2018 senior note issuances were made available for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases, or repayment of outstanding commercial paper or other borrowings. The following table presents future principal payments, net of discounts, premiums, and debt issuance costs, for our debt as of year-end 2018 : Debt Principal Payments ($ in millions) Amount 2019 $ 833 2020 912 2021 3,108 2022 1,114 2023 695 Thereafter 2,685 Balance at year-end 2018 $ 9,347 We paid cash for interest, net of amounts capitalized, of $290 million in 2018 , $234 million in 2017 , and $165 million in 2016 . |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | PENSION AND OTHER POSTRETIREMENT BENEFITS We sponsor numerous funded and unfunded domestic and international defined benefit pension plans. All defined benefit plans covering U.S. employees are frozen, meaning that employees do not accrue additional benefits. Certain plans covering non-U.S. employees remain active. We also sponsor the Starwood Retiree Welfare Program, which provides health care and life insurance benefits for certain eligible retired employees. The following tables show changes in plan assets and accumulated benefit obligations and the funded status of our defined benefit pension and other postretirement benefit plans at year-end 2018 and 2017 : Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits ($ in millions) 2018 2017 2018 2017 2018 2017 Plan Assets Beginning fair value of plan assets $ — $ — $ 294 $ 262 $ — $ — Actual return on plan assets, net of expenses — — (16 ) 29 — — Employer contribution 2 2 — 2 1 1 Participant contributions — — — — 1 — Plan settlement (1) — — (62 ) — — — Effect of foreign exchange rates — — (6 ) 10 — — Benefits paid (2 ) (2 ) (8 ) (9 ) (2 ) (1 ) Ending fair value of plan assets $ — $ — $ 202 $ 294 $ — $ — Accumulated Benefit Obligations Beginning benefit obligations $ 21 $ 21 $ 246 $ 229 $ 14 $ 15 Interest cost 1 1 8 8 1 — Actuarial (gain) loss (1 ) 1 2 10 (2 ) — Participant contributions — — — — 1 — Plan settlement (1) — — (55 ) — — — Effect of foreign exchange rates — — (4 ) 8 — — Benefits paid (2 ) (2 ) (9 ) (9 ) (2 ) (1 ) Ending accumulated benefit obligations $ 19 $ 21 $ 188 $ 246 $ 12 $ 14 Funded Status Overfunded (underfunded) at year-end $ (19 ) $ (21 ) $ 14 $ 48 $ (12 ) $ (14 ) (1) In 2018, we transferred the benefit obligations of one of our international pension plans located in the U.K. to Legal & General Assurance Society Limited (“LGAS”). The transaction met the criteria for settlement accounting, and accordingly, we removed the plan asset and liability from our Balance Sheet at year-end 2018. We reported the loss of $20 million in the “Merger-related costs and charges” caption of our Income Statement because we had assumed the plan in “Buy-In” status as a result of the Starwood Combination. The following table shows the classification of overfunded and (underfunded) amounts in our Balance Sheets at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Other noncurrent assets $ 21 $ 56 Accrued expenses and other (3 ) (3 ) Other noncurrent liabilities (35 ) (40 ) $ (17 ) $ 13 The following table shows the benefit obligations for pension plans with accumulated benefit obligations that exceed the fair value of plan assets: Domestic Pension Benefits Foreign Pension Benefits ($ in millions) 2018 2017 2018 2017 Projected benefit obligation $ 19 $ 21 $ 8 $ 8 Accumulated benefit obligation 19 21 7 7 Fair value of plan assets — — — — The weighted average assumptions used to determine benefit obligations at year-end 2018 and 2017 were as follows: Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits 2018 2017 2018 2017 2018 2017 Discount rate 4.25 % 3.50 % 3.88 % 3.30 % 4.24 % 3.50 % Rate of compensation increase (1) n/a n/a 3.02 % 3.02 % n/a n/a (1) Rate of compensation increase is not applicable to domestic pension benefits as all domestic plans are frozen and do not accrue additional benefits, or to other postretirement benefits as it is not an input in the benefit obligation determination. Our investment objectives for plan assets are to minimize asset value volatility and to ensure the assets are sufficient to pay plan benefits. The target asset allocation is 39% debt securities, 39% equity securities, and 22% other. We consider several factors in assessing the expected return on plan assets, including current and expected allocation of plan assets, investment strategy, historical rates of return and our expectations, as well as investment expert expectations, for investment performance over approximately a ten -year period. The following tables present our fair value hierarchy of plan assets at year-end 2018 and 2017 : At Year-End 2018 At Year-End 2017 ($ in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 76 $ — $ — $ 76 $ 86 $ — $ — $ 86 Collective trusts — 1 36 37 — 1 101 102 Equity index trusts 86 — — 86 94 — — 94 Money markets — 2 — 2 1 9 — 10 Bond index funds — 1 — 1 — 2 — 2 $ 162 $ 4 $ 36 $ 202 $ 181 $ 12 $ 101 $ 294 The collective trust assets include investments in insurance contracts, which we valued using significant unobservable inputs, including plan specific data and bond interest rates. We value all other assets using quoted market prices in active markets or other observable inputs. The following table shows our expected future pension and other postretirement benefit plan payments for the next ten years: ($ in millions) Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits Total 2019 $ 2 $ 17 $ 1 $ 20 2020 2 9 1 12 2021 2 10 1 13 2022 2 10 1 13 2023 1 11 1 13 2024-2028 7 55 5 67 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The following table details the composition of our intangible assets at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Definite-lived Intangible Assets Costs incurred to obtain contracts with customers $ 1,347 $ 1,137 Contracts acquired in business combinations and other 1,983 2,052 3,330 3,189 Accumulated amortization (674 ) (499 ) 2,656 2,690 Indefinite-lived Intangible Brand Assets 5,724 5,854 $ 8,380 $ 8,544 We capitalize direct costs that we incur to obtain management, franchise, and license agreements. We amortize these costs on a straight-line basis over the initial term of the agreements, ranging from 15 to 30 years. For acquired definite-lived intangible assets, we recorded amortization expense of $111 million in 2018 , $116 million in 2017 , and $31 million in 2016 in the “Depreciation, amortization, and other” caption of our Income Statements. For these assets, we estimate that our aggregate amortization expense will be $111 million for each of the next five fiscal years. The following table details the carrying amount of our goodwill at year-end 2018 and 2017 : ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Goodwill Balance at year-end 2017 $ 3,585 $ 1,769 $ 1,928 $ 1,925 $ 9,207 Foreign currency translation (19 ) (14 ) (66 ) (69 ) (168 ) Balance at year-end 2018 $ 3,566 $ 1,755 $ 1,862 $ 1,856 $ 9,039 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table presents the composition of our property and equipment balances at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Land $ 591 $ 601 Buildings and leasehold improvements 1,275 1,052 Furniture and equipment 1,439 1,121 Construction in progress 168 116 3,473 2,890 Accumulated depreciation (1,517 ) (1,097 ) $ 1,956 $ 1,793 We record property and equipment at cost, including interest and real estate taxes we incur during development and construction. We capitalize the cost of improvements that extend the useful life of property and equipment when we incur them. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. We expense all repair and maintenance costs when we incur them. We compute depreciation using the straight-line method over the estimated useful lives of the assets (generally three to 40 years), and we amortize leasehold improvements over the shorter of the asset life or lease term. Our gross depreciation expense totaled $256 million in 2018 , $231 million in 2017 , and $157 million in 2016 (of which $147 million in 2018 , $126 million in 2017 , and $76 million in 2016 was included in reimbursed costs). Fixed assets attributed to operations located outside the U.S. were $533 million in 2018 and $705 million in 2017 . |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTES RECEIVABLE The following table presents the expected future principal payments, net of reserves and unamortized discounts, as well as interest rates for our notes receivable as of year-end 2018 : Notes Receivable Principal Payments ($ in millions) Amount 2019 $ 6 2020 62 2021 2 2022 2 2023 — Thereafter 59 Balance at year-end 2018 $ 131 Weighted average interest rate at year-end 2018 5.9% Range of stated interest rates at year-end 2018 0 - 9% At year-end 2018 , our recorded investment in impaired senior, mezzanine, and other loans was $45 million , and we had a $25 million allowance for credit losses, leaving $20 million of exposure to our investment in impaired loans. At year-end 2017 , our recorded investment in impaired senior, mezzanine, and other loans was $95 million , and we had a $72 million allowance for credit losses, leaving $23 million of exposure to our investment in impaired loans. Our average investment in impaired senior, mezzanine, and other loans totaled $70 million during 2018 , $84 million during 2017 , and $73 million during 2016 . |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments, determined under current guidance for disclosures on the fair value of financial instruments, in the following table: At Year-End 2018 At Year-End 2017 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 125 $ 116 $ 142 $ 130 Total noncurrent financial assets $ 125 $ 116 $ 142 $ 130 Senior Notes $ (5,928 ) $ (5,794 ) $ (5,087 ) $ (5,126 ) Commercial paper (2,245 ) (2,245 ) (2,371 ) (2,371 ) Other long-term debt (184 ) (182 ) (217 ) (221 ) Other noncurrent liabilities (153 ) (153 ) (178 ) (178 ) Total noncurrent financial liabilities $ (8,510 ) $ (8,374 ) $ (7,853 ) $ (7,896 ) We estimate the fair value of our senior, mezzanine, and other loans by discounting cash flows using risk-adjusted rates, both of which are Level 3 inputs. We estimate the fair value of our other long-term debt, including the current portion and excluding leases, using expected future payments discounted at risk-adjusted rates, which are Level 3 inputs. We determine the fair value of our Senior Notes using quoted market prices, which are directly observable Level 1 inputs. As noted in Footnote 10. Long-Term Debt , even though our commercial paper borrowings generally have short-term maturities of 30 days or less, we classify outstanding commercial paper borrowings as long-term based on our ability and intent to refinance them on a long-term basis. As we are a frequent issuer of commercial paper, we use pricing from recent transactions as Level 2 inputs in estimating fair value. At year-end 2018 and year-end 2017 , we determined that the carrying value of our commercial paper approximated fair value due to the short maturity. Our other noncurrent liabilities largely consist of guarantees. As we note in the “ Guarantees ” caption of Footnote 2. Summary of Significant Accounting Policies , we measure our liability for guarantees at fair value on a nonrecurring basis, which is when we issue or modify a guarantee using Level 3 internally developed inputs. At year-end 2018 and year-end 2017 , we determined that the carrying values of our guarantee liabilities approximated their fair values based on Level 3 inputs. See the “ Fair Value Measurements ” caption of Footnote 2. Summary of Significant Accounting Policies for more information on the input levels we use in determining fair value. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table details the accumulated other comprehensive loss activity for 2018 , 2017 , and 2016 : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ — $ (196 ) Other comprehensive (loss) income before reclassifications (1) (311 ) 1 2 5 (303 ) Reclassification of losses — 2 — — 2 Net other comprehensive (loss) income (311 ) 3 2 5 (301 ) Balance at year-end 2016 $ (503 ) $ (5 ) $ 6 $ 5 $ (497 ) Other comprehensive income (loss) before reclassifications (1) 478 (14 ) (2 ) 7 469 Reclassification of losses 2 9 — — 11 Net other comprehensive income (loss) 480 (5 ) (2 ) 7 480 Balance at year-end 2017 $ (23 ) $ (10 ) $ 4 $ 12 $ (17 ) Other comprehensive (loss) income before reclassifications (1) (391 ) 12 — (8 ) (387 ) Reclassification of losses 11 6 — — 17 Net other comprehensive (loss) income (380 ) 18 — (8 ) (370 ) Adoption of ASU 2016-01 — — (4 ) — (4 ) Balance at year-end 2018 $ (403 ) $ 8 $ — $ 4 $ (391 ) (1) Other comprehensive (loss) income before reclassifications for foreign currency translation adjustments includes gains (losses) on intra-entity foreign currency transactions that are of a long-term investment nature of $14 million for 2018 , $(147) million for 2017 , and $69 million for 2016 . |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 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, or indirect general, administrative, and other expenses. 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. “ 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, equity in earnings or losses, and other gains or losses that we do not allocate to our segments. Beginning in the 2018 first quarter, “ 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. Additionally, in 2016, “ Unallocated corporate ” also included the impact of Legacy-Starwood operations for the eight days ended September 30, 2016, as we did not allocate Legacy-Starwood’s results to our segments for the period between the Merger Date and the end of the 2016 third quarter. Our President and Chief Executive Officer, who is our “chief operating decision maker” (“CODM”), 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 The following tables present our revenues disaggregated by major revenue stream as of year-end 2018 , year-end 2017 , and year-end 2016 : 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 1,255 $ 903 $ 479 $ 518 $ 3,155 Contract investment amortization (33 ) (12 ) (2 ) (11 ) (58 ) Net fee revenues 1,222 891 477 507 3,097 Owned, leased, and other revenue 593 128 182 668 1,571 Cost reimbursement revenue 11,257 2,198 459 1,091 15,005 Total segment revenue $ 13,072 $ 3,217 $ 1,118 $ 2,266 $ 19,673 Unallocated corporate 1,085 Total revenue $ 20,758 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 1,202 $ 842 $ 431 $ 476 $ 2,951 Contract investment amortization (25 ) (11 ) (1 ) (13 ) (50 ) Net fee revenues 1,177 831 430 463 2,901 Owned, leased, and other revenue 697 132 191 685 1,705 Cost reimbursement revenue 11,035 2,256 433 1,140 14,864 Total segment revenue $ 12,909 $ 3,219 $ 1,054 $ 2,288 $ 19,470 Unallocated corporate 982 Total revenue $ 20,452 2016 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 856 $ 746 $ 231 $ 312 $ 2,145 Contract investment amortization (21 ) (9 ) (1 ) (9 ) (40 ) Net fee revenues 835 737 230 303 2,105 Owned, leased, and other revenue 390 119 127 438 1,074 Cost reimbursement revenue 8,199 2,038 274 922 11,433 Total segment revenue $ 9,424 $ 2,894 $ 631 $ 1,663 $ 14,612 Unallocated corporate 795 Total revenue $ 15,407 Revenues attributed to operations located outside the U.S. were $4,246 million in 2018 , $3,830 million in 2017 , and $3,187 million in 2016 . Segment Profits ($ in millions) 2018 2017 2016 North American Full-Service $ 1,153 $ 1,238 $ 801 North American Limited-Service 786 827 702 Asia Pacific 456 361 160 Other International 570 420 222 Other unallocated corporate (302 ) 386 (447 ) Interest expense, net of interest income (318 ) (250 ) (199 ) Income taxes (438 ) (1,523 ) (431 ) Net income $ 1,907 $ 1,459 $ 808 Segment profits attributed to operations located outside the U.S. were $1,155 million in 2018 , $837 million in 2017 , and $446 million in 2016 . The 2018 segment profits consisted of segment profits of $456 million from Asia Pacific , $266 million from Europe, $242 million from the Caribbean and Latin America, $62 million from the Middle East and Africa, and $129 million from other locations. Depreciation, Amortization, and Other ($ in millions) 2018 2017 2016 North American Full-Service $ 82 $ 82 $ 43 North American Limited-Service 15 14 13 Asia Pacific 26 32 8 Other International 70 71 34 Unallocated corporate 33 30 21 $ 226 $ 229 $ 119 Capital Expenditures ($ in millions) 2018 2017 2016 North American Full-Service $ 290 $ 21 $ 35 North American Limited-Service 15 10 7 Asia Pacific 6 12 1 Other International 40 42 38 Unallocated corporate 205 155 118 $ 556 $ 240 $ 199 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Equity Method Investments We have equity method investments in entities that own properties for which we provide management services and receive fees. In addition, in some cases we provide loans, preferred equity, or guarantees to these entities. The following tables present financial data resulting from transactions with these related parties: Income Statement Data ($ in millions) 2018 2017 2016 Base management fees $ 25 $ 28 $ 18 Incentive management fees 12 15 10 Contract investment amortization (2 ) (2 ) (2 ) Owned, leased, and other revenue — 2 — Cost reimbursement revenue 332 356 222 Depreciation, amortization, and other (2 ) (3 ) (1 ) General, administrative, and other — (1 ) — Reimbursed expenses (337 ) (356 ) (222 ) Gains and other income, net 51 658 1 Interest income — 4 5 Equity in earnings 103 40 9 Balance Sheet Data ($ in millions) At Year-End 2018 At Year-End 2017 Current assets Accounts and notes receivable, net $ 31 $ 42 Prepaid expenses and other 1 — Intangible assets Contract acquisition costs and other 32 39 Equity method investments 732 734 Other noncurrent assets 10 17 Current liabilities Accounts payable (4 ) (11 ) Accrued expenses and other (16 ) (17 ) Deferred tax liabilities (20 ) (41 ) Other noncurrent liabilities (11 ) (4 ) Undistributed earnings attributable to our equity method investments represented approximately $70 million of our consolidated retained earnings at year-end 2018 . Summarized Financial Information for Investees The following tables present summarized financial information for the entities in which we have equity method investments: ($ in millions) 2018 2017 2016 (1) Sales $ 932 $ 1,176 $ 747 Net income 221 222 101 ($ in millions) At Year-End 2018 At Year-End 2017 Assets (primarily composed of hotel real estate managed by us) $ 2,724 $ 2,234 Liabilities 1,843 1,649 (1) 2016 sales and net income for entities in which we acquired an investment through the Starwood Combination are for the period from the Merger Date to year-end 2016. The carrying amount of our equity method investments was $732 million at year-end 2018 and $734 million at year-end 2017 . This value exceeded our share of the book value of the investees' net assets by $419 million at year-end 2018 and $441 at year-end 2017 , primarily due to the value that we assigned to land, contracts, and buildings owned by the investees. Other Related Parties We received management fees of approximately $13 million in 2018 , $13 million in 2017 , and $13 million in 2016 , plus reimbursement of certain expenses, from our operation of properties owned by JWM Family Enterprises, L.P., which is beneficially owned and controlled by J.W. Marriott, Jr., Deborah Marriott Harrison, and other members of the Marriott family. |
RELATIONSHIP WITH MAJOR CUSTOME
RELATIONSHIP WITH MAJOR CUSTOMER | 12 Months Ended |
Dec. 31, 2018 | |
Relationship with Major Customer Disclosure [Abstract] | |
RELATIONSHIP WITH MAJOR CUSTOMER | RELATIONSHIP WITH MAJOR CUSTOMER Host Hotels & Resorts, Inc., formerly known as Host Marriott Corporation, and its affiliates (“Host”) owned or leased 74 lodging properties at year-end 2018 and 81 at year-end 2017 that we operated or franchised. Over the last three years, we recognized revenues, including cost reimbursement revenue, of $2,542 million in 2018 , $2,671 million in 2017 , and $2,015 million in 2016 from those lodging properties, and included those revenues in our North American Full-Service and North American Limited-Service reportable business segments, and our Caribbean and Latin America and Europe operating segments. Host is also a partner in certain unconsolidated partnerships that own lodging properties that we operate under long-term agreements. Host was affiliated with 10 such properties at year-end 2018 and 11 such properties at year-end 2017 . We recognized revenues, including cost reimbursement revenue, of $123 million in 2018 , $114 million in 2017 , and $100 million in 2016 from those lodging properties, and included those revenues in our North American Full-Service reportable business segment and our Europe operating segment. |
SUPPLEMENTARY DATA QUARTERLY FI
SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA - UNAUDITED | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA - UNAUDITED | SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA – UNAUDITED ($ in millions, except per share data) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Revenues $ 5,009 $ 5,409 $ 5,051 $ 5,289 $ 20,758 Operating income $ 530 $ 818 $ 596 $ 422 $ 2,366 Net income $ 420 $ 667 $ 503 $ 317 $ 1,907 Basic earnings per share (1) $ 1.17 $ 1.89 $ 1.45 $ 0.93 $ 5.45 Diluted earnings per share (1) $ 1.16 $ 1.87 $ 1.43 $ 0.92 $ 5.38 ($ in millions, except per share data) 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Revenues $ 4,912 $ 5,211 $ 5,078 $ 5,251 $ 20,452 Operating income $ 546 $ 744 $ 790 $ 424 $ 2,504 Net income $ 371 $ 489 $ 485 $ 114 $ 1,459 Basic earnings per share (1) $ 0.96 $ 1.29 $ 1.30 $ 0.31 $ 3.89 Diluted earnings per share (1) $ 0.95 $ 1.28 $ 1.29 $ 0.31 $ 3.84 (1) The sum of the earnings per share for the four quarters may differ from annual earnings per share due to the required method of computing the weighted average shares in interim periods. In the 2018 fourth quarter, we identified errors related to our Loyalty Program, which resulted in the understatement of cost reimbursement revenue, net of reimbursed expenses in our previously issued financial statements for the 2018 first, second, and third quarters. Correction of the errors resulted in a $99 million increase to net income for the 2018 first three quarters combined. We concluded that the errors were and continue to be immaterial to those financial statements. We revised each prior period presented in the 2018 quarterly financial data table above to reflect the correction of the immaterial errors because recording the out of period adjustments would have been material to the 2018 fourth quarter. The table below presents the effects of our adjustments. 2018 First Quarter Second Quarter Third Quarter ($ in millions, except per share amounts) As Previously Reported Adjustments As Adjusted As Previously Reported Adjustments As Adjusted As Previously Reported Adjustments As Adjusted REVENUES Base management fees $ 273 $ — $ 273 $ 300 $ — $ 300 $ 279 $ — $ 279 Franchise fees 417 — 417 475 — 475 502 — 502 Incentive management fees 155 — 155 176 — 176 151 — 151 Gross fee revenues 845 — 845 951 — 951 932 — 932 Contract investment amortization (18 ) — (18 ) (13 ) — (13 ) (13 ) — (13 ) Net fee revenues 827 — 827 938 — 938 919 — 919 Owned, leased, and other revenue 406 — 406 423 — 423 397 — 397 Cost reimbursement revenue 3,773 3 3,776 3,985 63 4,048 3,733 2 3,735 5,006 3 5,009 5,346 63 5,409 5,049 2 5,051 OPERATING COSTS AND EXPENSES Owned, leased, and other-direct 336 — 336 334 — 334 315 — 315 Depreciation, amortization, and other 54 — 54 58 — 58 52 — 52 General, administrative, and other 247 — 247 217 — 217 221 — 221 Merger-related costs and charges 34 — 34 18 — 18 12 — 12 Reimbursed expenses 3,835 (27 ) 3,808 3,979 (15 ) 3,964 3,879 (24 ) 3,855 4,506 (27 ) 4,479 4,606 (15 ) 4,591 4,479 (24 ) 4,455 OPERATING INCOME 500 30 530 740 78 818 570 26 596 Gains and other income, net 59 — 59 114 — 114 18 — 18 Interest expense (75 ) — (75 ) (85 ) — (85 ) (86 ) — (86 ) Interest income 5 — 5 6 — 6 5 — 5 Equity in earnings 13 — 13 21 — 21 61 — 61 INCOME BEFORE INCOME TAXES 502 30 532 796 78 874 568 26 594 Provision for income taxes (104 ) (8 ) (112 ) (186 ) (21 ) (207 ) (85 ) (6 ) (91 ) NET INCOME $ 398 $ 22 $ 420 $ 610 $ 57 $ 667 $ 483 $ 20 $ 503 EARNINGS PER SHARE Earnings per share - basic $ 1.11 $ 0.06 $ 1.17 $ 1.73 $ 0.16 $ 1.89 $ 1.39 $ 0.06 $ 1.45 Earnings per share - diluted $ 1.09 $ 0.07 $ 1.16 $ 1.71 $ 0.16 $ 1.87 $ 1.38 $ 0.05 $ 1.43 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | In order to make this report easier to read, we also refer throughout to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Income as our “Income Statements,” (iii) our 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 Consolidated Financial Statements, unless otherwise noted. Preparation of financial statements that conform with U.S. generally accepted accounting principles (“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 at fiscal year-end 2018 and fiscal year-end 2017 and the results of our operations and cash flows for fiscal years 2018 , 2017 , and 2016 . We have eliminated all material intercompany transactions and balances between entities consolidated in these Financial Statements. |
Revenue | 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 expenses ” caption of our Income Statements. Loyalty Program members earn points based on the money they spend at our hotels; purchases of timeshare interval, fractional ownership, and residential products; and through participation in travel experiences and affiliated partners’ programs, such as those offered by credit card, car rental, and airline companies. Members can redeem points, which we track on their behalf, for stays at most of our hotels, airline tickets, airline frequent flyer program miles, rental cars, and a variety of other awards. Points cannot be redeemed for cash. 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 breakage 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 on 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 institution that issues 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 . Base Management and Incentive Management Fees : 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. Franchise Fee and Royalty Fee Revenue : 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. Owned and Leased Hotel Revenue : 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. Cost Reimbursements : 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 a combination of fixed fees and variable fees based on sales or other 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.” Other Revenue : Includes Global Design fees, which we describe below, termination fees, and other property and brand revenues. We generally recognize termination fees when collection is probable, and other revenue as services are rendered. Amounts received in advance are deferred as liabilities. 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. 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 or 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 to the applicable governmental agencies on a periodic basis. We do not include these taxes in determining the transaction price. |
Real Estate Sales | We recognize a gain or loss on real estate transactions when control of the asset transfers to the buyer, generally at the time the sale closes. In sales transactions where we retain a management contract, the terms and conditions of the management contract are generally comparable to the terms and conditions of the management contracts obtained directly with third-party owners in competitive processes. |
Profit Sharing Plan | Profit Sharing Plan We contribute to tax-qualified retirement plans for the benefit of U.S. employees who meet certain eligibility requirements and choose to participate in the plans. Participating employees specify the percentage or amount of salary they wish to contribute from their compensation, and the Company typically makes discretionary and certain other matching or supplemental contributions. |
Non-U.S. Operations | The U.S. dollar is the functional currency of our consolidated and unconsolidated entities operating in the U.S. The functional currency of our consolidated and unconsolidated entities operating outside of the U.S. is generally the principal currency of the economic environment in which the entity primarily generates and expends cash. We translate the financial statements of consolidated entities whose functional currency is not the U.S. dollar into U.S. dollars, and we do the same, as needed, for unconsolidated entities whose functional currency is not the U.S. dollar. We translate assets and liabilities at the exchange rate in effect as of the financial statement date and translate income statement accounts using the weighted average exchange rate for the period. We include translation adjustments from currency exchange and the effect of exchange rate changes on intercompany transactions of a long-term investment nature as a separate component of shareholders’ equity. We report gains and losses from currency exchange rate changes for intercompany receivables and payables that are not of a long-term investment nature, as well as for third-party transactions, currently in operating costs and expenses. |
Share-Based Compensation | Our share-based compensation awards primarily consist of restricted stock units (“RSUs”). We measure compensation costs for our share-based payment transactions at fair value on the grant date, and we recognize those costs in our Financial Statements over the vesting period during which the employee provides service in exchange for the award. |
Advertising Costs | We expense costs to produce advertising as they are incurred and to communicate advertising as the communication occurs and record such amounts in reimbursed expenses to the extent undertaken on behalf of our owners and franchisees. |
Income Taxes | We record the amounts of taxes payable or refundable for the current year, as well as deferred tax liabilities and assets for the future tax consequences of events we have recognized in our Financial Statements or tax returns, using judgment in assessing future profitability and the likely future tax consequences of those events. We base our estimates of deferred tax assets and liabilities on current tax laws, rates and interpretations, and, in certain cases, business plans and other expectations about future outcomes. We develop our estimates of future profitability based on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We generally recognize the effect of the tax law changes in the period of enactment. Changes in existing tax laws and rates, their related interpretations, and the uncertainty generated by the current economic environment may affect the amounts of our deferred tax liabilities or the valuations of our deferred tax assets over time. Our accounting for deferred tax consequences represents management’s best estimate of future events that can be appropriately reflected in the accounting estimates. For tax positions we have taken or expect to take in a tax return, we apply a more likely than not threshold, under which we must conclude a tax position is more likely than not to be sustained, assuming that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information, to continue to recognize the benefit. In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold. We recognize accrued interest and penalties for our unrecognized tax benefits as a component of tax expense. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carry-forwards. We state those balances at the enacted tax rates we expect will be in effect when we pay or recover the taxes. Deferred income tax assets represent amounts available to reduce income taxes we will pay on taxable income in future years. We evaluate our ability to realize these future tax deductions and credits by assessing whether we expect to have sufficient future taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings, and available tax planning strategies to utilize these future deductions and credits. We establish a valuation allowance when we no longer consider it more likely than not that a deferred tax asset will be realized. |
Cash and Equivalents | We consider all highly liquid investments with an initial maturity of three months or less at date of purchase to be cash equivalents. |
Accounts Receivable | Our accounts receivable primarily consist of amounts due from hotel owners with whom we have management and franchise agreements and include reimbursements of costs we incurred on behalf of managed and franchised properties. We generally collect these receivables within 30 days. We record an accounts receivable reserve when losses are probable, based on an assessment of historical collection activity and current business conditions. |
Assets Held for Sale | We consider properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we expect the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and we cease depreciation. |
Goodwill | We test goodwill for potential impairment at least annually in the fourth quarter, or more frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the net assets of the reporting unit. In evaluating goodwill for impairment, we may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. If we bypass the qualitative assessment, or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount. We calculate the estimated fair value of a reporting unit using a weighting of the income and market approaches. For the income approach, we use internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. For the market approach, we use internal analyses based primarily on market comparables. We base these assumptions on our historical data and experience, third-party appraisals, industry projections, micro and macro general economic condition projections, and our expectations. |
Intangibles and Long-Lived Assets | We assess indefinite-lived intangible assets for potential impairment and continued indefinite use annually, or more frequently if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. Like goodwill, we may first assess qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible is less than its carrying amount. If the carrying value of the asset exceeds the fair value, we recognize an impairment loss in the amount of that excess. We test definite-lived intangibles and long-lived asset groups for recoverability when changes in circumstances indicate that we may not be able to recover the carrying value; for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, or significant negative industry or economic trends. We also test recoverability when management has committed to a plan to sell or otherwise dispose of an asset group and we expect to complete the plan within a year. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect the asset group will generate. If the comparison indicates that we will not be able to recover the carrying value of an asset group, we recognize an impairment loss for the amount by which the carrying value exceeds the estimated fair value. When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life. We calculate the estimated fair value of an intangible asset or asset group using the income approach or the market approach. We utilize the same assumptions and methodology for the income approach that we describe in the “ Goodwill ” caption. For the market approach, we use internal analyses based primarily on market comparables and assumptions about market capitalization rates, growth rates, and inflation. |
Investments | We hold equity interests in ventures established to develop or acquire and own hotel properties or that otherwise support our hospitality operations. We account for these investments as either an equity method investment, a financial asset, or a controlled subsidiary. We apply the equity method of accounting if we have significant influence over the entity, typically when we hold 20 percent of the voting common stock (or equivalent) of an investee but do not have a controlling financial interest. In certain circumstances, such as with investments in limited liability or limited partnerships, we apply the equity method of accounting when we own as little as three to five percent. We account for financial assets at fair value if it is readily determinable, or using the fair value alternative method, whereby investments are measured at cost less impairment, adjusted for observable price changes. We consolidate entities that we control. When we acquire an investment that qualifies for the equity method of accounting, we determine the acquisition date fair value of the identifiable assets and liabilities. If our carrying amount exceeds our proportional share in the equity of the investee, we amortize the difference on a straight-line basis over the underlying assets’ estimated useful lives when calculating equity method earnings attributable to us, excluding the difference attributable to land, which we do not amortize. We evaluate an investment for impairment when circumstances indicate that we may not be able to recover the carrying value. When evaluating our ventures, we consider loan defaults, significant underperformance relative to historical or projected operating performance, or significant negative industry or economic trends. Additionally, a venture’s commitment to a plan to sell some or all of its assets could cause us to evaluate the recoverability of the venture’s individual long-lived assets and possibly the venture itself. We impair investments we account for using the equity method of accounting when we determine that there has been an “other-than-temporary” decline in the venture’s estimated fair value compared to its carrying value. We perform qualitative assessments for investments we account for using the fair value alternative method and we record any associated impairment when the fair value is less than the carrying value. Under the accounting guidance for the consolidation of variable interest entities, we analyze our variable interests, including equity investments, loans, and guarantees, to determine if an entity in which we have a variable interest is a variable interest entity. Our analysis includes both quantitative and qualitative reviews. We base our quantitative analysis on the forecasted cash flows of the entity, and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. We also use our qualitative analysis to determine if we must consolidate a variable interest entity as its primary beneficiary. |
Fair Value Measurements | We have various financial instruments we must measure at fair value on a recurring basis, including certain marketable securities and derivatives. See Footnote 15. Fair Value of Financial Instruments for further information. We also apply the provisions of fair value measurement to various nonrecurring measurements for our financial and nonfinancial assets and liabilities. Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). We measure our assets and liabilities using inputs from the following three levels of the fair value hierarchy: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 includes unobservable inputs that reflect our assumptions about what factors market participants would use in pricing the asset or liability. We develop these inputs based on the best information available, including our own data. |
Derivative Instruments | We record derivatives at fair value. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how we reflect the change in fair value of the derivative instrument in our Financial Statements. A derivative qualifies for hedge accounting if, at inception, we expect the derivative will be highly effective in offsetting the underlying hedged cash flows or fair value and we fulfill the hedge documentation standards at the time we enter into the derivative contract. We designate a hedge as a cash flow hedge, fair value hedge, or a net investment in non-U.S. operations hedge based on the exposure we are hedging. For the effective portion of qualifying cash flow hedges, we record changes in fair value in other comprehensive income (“OCI”). We release the derivative’s gain or loss from OCI to match the timing of the underlying hedged items’ effect on earnings. We review the effectiveness of our hedging instruments quarterly, recognize current period hedge ineffectiveness immediately in earnings, and discontinue hedge accounting for any hedge that we no longer consider to be highly effective. We recognize changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting in current period earnings. Upon termination of cash flow hedges, we release gains and losses from OCI based on the timing of the underlying cash flows or revenue recognized, unless the termination results from the failure of the intended transaction to occur in the expected time frame. Such untimely transactions require us to immediately recognize in earnings the gains and/or losses that we previously recorded in OCI. Changes in interest rates, currency exchange rates, and equity securities expose us to market risk. We manage our exposure to these risks by monitoring available financing alternatives, as well as through development and application of credit granting policies. We also use derivative instruments, including cash flow hedges, net investment in non-U.S. operations hedges, fair value hedges, and other derivative instruments, as part of our overall strategy to manage our exposure to market risks. As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk, and we do not use derivatives for trading or speculative purposes. |
Loan Loss Reserves | We may make senior, mezzanine, and other loans to owners of hotels that we operate or franchise, generally to facilitate the development of a hotel and sometimes to facilitate brand programs or initiatives. We expect the owners to repay the loans in accordance with the loan agreements, or earlier as the hotels mature and capital markets permit. We use metrics such as loan-to-value ratios and debt service coverage, and other information about collateral and from third party rating agencies to assess the credit quality of the loan receivable, both upon entering into the loan agreement and on an ongoing basis as applicable. On a regular basis, we individually assess loans for impairment. We use internally generated cash flow projections to determine if we expect the loans will be repaid under the terms of the loan agreements. If we conclude that it is probable a borrower will not repay a loan in accordance with its terms, we consider the loan impaired and begin recognizing interest income on a cash basis. To measure impairment, we calculate the present value of expected future cash flows discounted at the loan’s original effective interest rate or the estimated fair value of the collateral. If the present value or the estimated collateral is less than the carrying value of the loan receivable, we establish a specific impairment reserve for the difference. If it is likely that a loan will not be collected based on financial or other business indicators, including our historical experience, our policy is to charge off the loan in the quarter in which we deem it uncollectible. |
Guarantees | We measure and record our liability for the fair value of a guarantee on a nonrecurring basis, that is when we issue or modify a guarantee, using Level 3 internally developed inputs, as described above in this footnote under the heading “ Fair Value Measurements .” We base our calculation of the estimated fair value of a guarantee on the income approach or the market approach, depending on the type of guarantee. For the income approach, we use internally developed discounted cash flow and Monte Carlo simulation models that include the following assumptions, among others: projections of revenues and expenses and related cash flows based on assumed growth rates and demand trends; historical volatility of projected performance; the guaranteed obligations; and applicable discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. For the market approach, we use internal analyses based primarily on market comparable data and our assumptions about market capitalization rates, credit spreads, growth rates, and inflation. The offsetting entry for the guarantee liability depends on the circumstances in which the guarantee was issued. Funding under the guarantee reduces the recorded liability. In most cases, when we do not forecast any funding, we amortize the liability into income on a straight-line basis over the remaining term of the guarantee. On a quarterly basis, we evaluate all material estimated liabilities based on the operating results and the terms of the guarantee. If we conclude that it is probable that we will be required to fund a greater amount than previously estimated, we record a loss except to the extent that the applicable contracts provide that the advance can be recovered as a loan. |
Self-Insurance Programs | We self-insure for certain levels of liability, workers’ compensation, and employee medical coverage. We accrue estimated costs of these self-insurance programs at the present value of projected settlements for known and incurred but not reported claims. We use a discount rate of three percent to determine the present value of the projected settlements, which we consider to be reasonable given our history of settled claims, including payment patterns and the fixed nature of the individual settlements. |
Legal Contingencies | We are subject to various legal proceedings and claims, the outcomes of which are uncertain. We record an accrual for legal contingencies when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the loss. In making such determinations we evaluate, among other things, the probability of an unfavorable outcome and, when we believe it probable that a liability has been incurred, our ability to make a reasonable estimate of the loss. We review these accruals each reporting period and make revisions based on changes in facts and circumstances. |
Business Combinations | We allocate the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. We recognize as goodwill the amount by which the purchase price of an acquired entity exceeds the net of the fair values assigned to the assets acquired and liabilities assumed. In determining the fair values of assets acquired and liabilities assumed, we use various recognized valuation methods including the income and market approaches. Further, we make assumptions within certain valuation techniques, including discount rates, royalty rates, and the amount and timing of future cash flows. We record the net assets and results of operations of an acquired entity in our Financial Statements from the acquisition date. We initially perform these valuations based upon preliminary estimates and assumptions by management or independent valuation specialists under our supervision, where appropriate, and make revisions as estimates and assumptions are finalized. We expense acquisition-related costs as we incur them. |
New Accounting Standards | 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 $1.1 billion , with no impact to our Income Statements or Statements of Cash Flows. Our estimate represents the net present value of lease payments from operating leases that commenced on or before December 31, 2018 . 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 from Contracts with Customers. 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. 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. |
Intangible Assets | We capitalize direct costs that we incur to obtain management, franchise, and license agreements. We amortize these costs on a straight-line basis over the initial term of the agreements, ranging from 15 to 30 years. |
Property and Equipment, Capitalization and Useful Lives | We record property and equipment at cost, including interest and real estate taxes we incur during development and construction. We capitalize the cost of improvements that extend the useful life of property and equipment when we incur them. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. We expense all repair and maintenance costs when we incur them. We compute depreciation using the straight-line method over the estimated useful lives of the assets (generally three to 40 years), and we amortize leasehold improvements over the shorter of the asset life or lease term. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Income Statements Twelve Months Ended December 31, 2017 Twelve Months Ended December 31, 2016 ($ in millions, except per share amounts) As Previously Reported Adoption of ASU 2014-09 As Adjusted As Previously Reported Adoption of ASU 2014-09 As Adjusted REVENUES Base management fees $ 1,102 $ — $ 1,102 $ 806 $ — $ 806 Franchise fees 1,618 (32 ) 1,586 1,169 (12 ) 1,157 Incentive management fees 607 — 607 425 — 425 Gross fee revenues 3,327 (32 ) 3,295 2,400 (12 ) 2,388 Contract investment amortization — (50 ) (50 ) — (40 ) (40 ) Net fee revenues 3,327 (82 ) 3,245 2,400 (52 ) 2,348 Owned, leased, and other revenue 1,802 (50 ) 1,752 1,126 (1 ) 1,125 Cost reimbursement revenue 17,765 (2,310 ) 15,455 13,546 (1,612 ) 11,934 22,894 (2,442 ) 20,452 17,072 (1,665 ) 15,407 OPERATING COSTS AND EXPENSES Owned, leased, and other-direct 1,427 (16 ) 1,411 900 1 901 Depreciation, amortization, and other 290 (61 ) 229 168 (49 ) 119 General, administrative, and other 894 27 921 704 39 743 Merger-related costs and charges 159 — 159 386 — 386 Reimbursed expenses 17,765 (2,537 ) 15,228 13,546 (1,712 ) 11,834 20,535 (2,587 ) 17,948 15,704 (1,721 ) 13,983 OPERATING INCOME 2,359 145 2,504 1,368 56 1,424 Gains and other income, net 688 — 688 5 — 5 Interest expense (288 ) — (288 ) (234 ) — (234 ) Interest income 38 — 38 35 — 35 Equity in earnings 39 1 40 10 (1 ) 9 INCOME BEFORE INCOME TAXES 2,836 146 2,982 1,184 55 1,239 Provision for income taxes (1,464 ) (59 ) (1,523 ) (404 ) (27 ) (431 ) NET INCOME $ 1,372 $ 87 $ 1,459 $ 780 $ 28 $ 808 EARNINGS PER SHARE Earnings per share - basic $ 3.66 $ 0.23 $ 3.89 $ 2.68 $ 0.10 $ 2.78 Earnings per share - diluted $ 3.61 $ 0.23 $ 3.84 $ 2.64 $ 0.09 $ 2.73 Statements of Comprehensive Income Twelve Months Ended December 31, 2017 Twelve Months Ended December 31, 2016 ($ in millions) As Previously Reported Adoption of ASU 2014-09 As Adjusted As Previously Reported Adoption of ASU 2014-09 As Adjusted Net income $ 1,372 $ 87 $ 1,459 $ 780 $ 28 $ 808 Other comprehensive income (loss): Foreign currency translation adjustments 478 — 478 (311 ) — (311 ) Derivative instrument adjustments, net of tax (14 ) — (14 ) 1 — 1 Unrealized (loss) gain on available-for-sale securities, net of tax (2 ) — (2 ) 2 — 2 Pension and postretirement adjustments, net of tax 7 — 7 5 — 5 Reclassification of losses, net of tax 11 — 11 2 — 2 Total other comprehensive income (loss), net of tax 480 — 480 (301 ) — (301 ) Comprehensive income $ 1,852 $ 87 $ 1,939 $ 479 $ 28 $ 507 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 Twelve Months Ended December 31, 2017 Twelve Months Ended December 31, 2016 ($ in millions) As Previously Reported ASU 2014-09 ASUs 2016-18 and 2016-15 As Adjusted As Previously Reported ASU 2014-09 ASUs 2016-18 and 2016-15 As Adjusted OPERATING ACTIVITIES Net income $ 1,372 $ 87 $ — $ 1,459 $ 780 $ 28 $ — $ 808 Adjustments to reconcile to cash provided by operating activities: Depreciation, amortization, and other 290 (11 ) — 279 168 (9 ) — 159 Share-based compensation 181 — — 181 212 — — 212 Income taxes 828 59 — 887 76 27 — 103 Liability for guest loyalty program 378 (80 ) — 298 343 (122 ) — 221 Contract acquisition costs — (185 ) — (185 ) — (76 ) — (76 ) Merger-related charges (124 ) — — (124 ) 113 96 — 209 Working capital changes 81 (128 ) 17 (30 ) (77 ) (24 ) (5 ) (106 ) Gain on asset dispositions (687 ) — — (687 ) 1 — — 1 Other 117 67 (35 ) 149 66 30 (8 ) 88 Net cash provided by (used in) operating activities 2,436 (191 ) (18 ) 2,227 1,682 (50 ) (13 ) 1,619 INVESTING ACTIVITIES Acquisition of a business, net of cash acquired — — — — (2,412 ) — 20 (2,392 ) Capital expenditures (240 ) — — (240 ) (199 ) — — (199 ) Dispositions 1,418 — — 1,418 218 — (7 ) 211 Loan advances (93 ) — — (93 ) (32 ) — — (32 ) Loan collections 187 — — 187 67 — — 67 Contract acquisition costs (189 ) 189 — — (80 ) 80 — — Other (63 ) 2 — (61 ) 29 (30 ) — (1 ) Net cash provided by (used in) investing activities 1,020 191 — 1,211 (2,409 ) 50 13 (2,346 ) FINANCING ACTIVITIES Commercial paper/Credit Facility, net 25 — 35 60 1,365 — 8 1,373 Issuance of long-term debt — — — — 1,482 — — 1,482 Repayment of long-term debt (310 ) — — (310 ) (326 ) — — (326 ) Issuance of Class A Common Stock 6 — — 6 34 — — 34 Dividends paid (482 ) — — (482 ) (374 ) — — (374 ) Purchase of treasury stock (3,013 ) — — (3,013 ) (568 ) — — (568 ) Share-based compensation withholding taxes (157 ) — — (157 ) (100 ) — — (100 ) Other — — — — (24 ) — — (24 ) Net cash used in (provided by) financing activities (3,931 ) — 35 (3,896 ) 1,489 — 8 1,497 (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (475 ) — 17 (458 ) 762 — 8 770 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 858 — 29 887 96 — 21 117 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 383 $ — $ 46 $ 429 $ 858 $ — $ 29 $ 887 |
DISPOSITIONS AND ACQUISITIONS (
DISPOSITIONS AND ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Consideration Transferred and Results of Starwood Operations Included in Income Statements | The following table presents the fair value of each type of consideration that we transferred in the Starwood Combination: (in millions, except per share amounts) Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares 134.4 Marriott common stock price as of Merger Date $ 68.44 Fair value of Marriott common stock issued in exchange for Starwood outstanding shares 9,198 Cash consideration to Starwood shareholders, net of cash acquired of $1,116 2,412 Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards 71 Total consideration transferred, net of cash acquired $ 11,681 |
Fair Value of Assets Acquired and Liabilities Assume | The following table presents our fair value estimates of the assets that we acquired and the liabilities that we assumed on the Merger Date: ($ in millions) September 23, 2016 (as finalized) Working capital $ (236 ) Property and equipment, including assets held for sale 1,706 Identified intangible assets 7,238 Equity and cost method investments 537 Other noncurrent assets 200 Deferred income taxes, net (1,464 ) Guest loyalty program (1,638 ) Debt (1,877 ) Other noncurrent liabilities (977 ) Net assets acquired 3,489 Goodwill (1) 8,192 $ 11,681 (1) Goodwill primarily represents the value that we expect to obtain from synergies and growth opportunities from our combined operations, and it is not deductible for tax purposes. |
Fair Values of Identified Intangible Assets and Their Estimated Useful Lives | The following table presents our estimates of the fair values of Starwood’s identified intangible assets and their related estimated useful lives. Estimated Fair Value Estimated Useful Life Brands $ 5,664 indefinite Management Agreements and Lease Contract Intangibles 751 10 - 25 Franchise Agreements 746 10 - 80 Loyalty Program Marketing Rights 77 30 $ 7,238 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Earnings (Losses) and Number of Shares Used in Calculations of Basic and Diluted Earnings Per Share | The table below illustrates the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share: (in millions, except per share amounts) 2018 2017 2016 Computation of Basic Earnings Per Share Net income $ 1,907 $ 1,459 $ 808 Shares for basic earnings per share 350.1 375.2 290.9 Basic earnings per share $ 5.45 $ 3.89 $ 2.78 Computation of Diluted Earnings Per Share Net income $ 1,907 $ 1,459 $ 808 Shares for basic earnings per share 350.1 375.2 290.9 Effect of dilutive securities Share-based compensation 4.1 4.7 4.8 Shares for diluted earnings per share 354.2 379.9 295.7 Diluted earnings per share $ 5.38 $ 3.84 $ 2.73 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Additional Information on RSUs | The following table provides additional information on RSUs for the last three fiscal years: 2018 2017 2016 Share-based compensation expense (in millions) $ 170 $ 172 $ 204 Weighted average grant-date fair value (per RSU) $ 132 $ 85 $ 66 Aggregate intrinsic value of distributed RSUs (in millions) $ 294 $ 322 $ 190 |
Changes in Outstanding RSU Grants | The following table presents the changes in our outstanding RSUs, including PSUs, during 2018 and the associated weighted average grant-date fair values: Number of RSUs (in millions) Weighted Average Grant-Date Fair Value (per RSU) Outstanding at year-end 2017 5.6 $ 71 Granted 1.5 132 Distributed (2.1 ) 69 Forfeited (0.2 ) 93 Outstanding at year-end 2018 4.8 $ 90 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Earnings Before Income Taxes | The components of our earnings before income taxes for the last three fiscal years consisted of: ($ in millions) 2018 2017 2016 U.S. $ 1,311 $ 2,153 $ 888 Non-U.S. 1,034 829 351 $ 2,345 $ 2,982 $ 1,239 |
Provision for Income Taxes | Our provision for income taxes for the last three fiscal years consists of: ($ in millions) 2018 2017 2016 Current -U.S. Federal $ (169 ) $ (1,253 ) $ (203 ) -U.S. State (94 ) (152 ) (41 ) -Non-U.S. (284 ) (178 ) (56 ) (547 ) (1,583 ) (300 ) Deferred -U.S. Federal 10 61 (80 ) -U.S. State (6 ) (33 ) (17 ) -Non-U.S. 105 32 (34 ) 109 60 (131 ) $ (438 ) $ (1,523 ) $ (431 ) |
Unrecognized Tax Benefits Reconciliation | The following table reconciles our unrecognized tax benefit balance for each year from the beginning of 2016 to the end of 2018 : ($ in millions) Amount Unrecognized tax benefit at beginning of 2016 $ 24 Additions from Starwood Combination 387 Change attributable to tax positions taken in prior years (3 ) Change attributable to tax positions taken during the current period 16 Decrease attributable to settlements with taxing authorities (2 ) Decrease attributable to lapse of statute of limitations (1 ) Unrecognized tax benefit at year-end 2016 421 Change attributable to tax positions taken in prior years 12 Change attributable to tax positions taken during the current period 87 Decrease attributable to settlements with taxing authorities (28 ) Decrease attributable to lapse of statute of limitations (1 ) Unrecognized tax benefit at year-end 2017 491 Change attributable to tax positions taken in prior years 37 Change attributable to tax positions taken during the current period 148 Decrease attributable to settlements with taxing authorities (53 ) Unrecognized tax benefit at year-end 2018 $ 623 |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the tax effect of each type of temporary difference and carry-forward that gave rise to significant portions of our deferred tax assets and liabilities as of year-end 2018 and year-end 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Deferred Tax Assets Employee benefits $ 261 $ 264 Net operating loss carry-forwards 494 376 Accrued expenses and other reserves 160 161 Receivables, net 12 21 Tax credits 24 27 Loyalty Program 133 31 Deferred income 56 17 Self-insurance — 12 Other 13 2 Deferred tax assets 1,153 911 Valuation allowance (428 ) (309 ) Deferred tax assets after valuation allowance 725 602 Deferred Tax Liabilities Joint venture interests (59 ) (33 ) Property and equipment (85 ) (62 ) Intangibles (876 ) (1,019 ) Self-insurance (19 ) — Deferred tax liabilities (1,039 ) (1,114 ) Net deferred taxes $ (314 ) $ (512 ) |
Reconciliation of the U.S. Statutory Tax Rate to Effective Income Tax Rate | The following table reconciles the U.S. statutory tax rate to our effective income tax rate for the last three fiscal years: 2018 2017 2016 U.S. statutory tax rate 21.0 % 35.0 % 35.0 % U.S. state income taxes, net of U.S. federal tax benefit 2.5 3.1 3.0 Non-U.S. income (1.0 ) (7.3 ) (6.1 ) Change in valuation allowance 2.6 2.0 0.3 Change in uncertain tax positions 1.0 2.2 1.4 Change in U.S. tax rate (1.7 ) (5.5 ) 0.0 Transition Tax on foreign earnings 0.1 22.8 0.0 Tax on asset dispositions (2.9 ) (0.2 ) 0.0 Excess tax benefits related to equity awards (1.8 ) (2.4 ) 0.0 Other, net (1.1 ) 1.4 1.2 Effective rate 18.7 % 51.1 % 34.8 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 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 year-end 2018 in the following table: ($ in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 125 $ 17 Operating profit 212 100 Other 9 2 $ 346 $ 119 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Future Minimum Lease Obligations | The following table presents our future minimum lease obligations for which we are the primary obligor as of year-end 2018 : ($ in millions) Operating Leases Capital Leases 2019 $ 171 $ 13 2020 170 13 2021 145 13 2022 153 13 2023 139 13 Thereafter 1,295 165 Total minimum lease payments where we are the primary obligor $ 2,073 $ 230 Less: Amount representing interest 67 Present value of minimum lease payments $ 163 |
Composition of Rent Expense Associated with Operating Leases | The following table details the composition of rent expense for operating leases for the last three years: ($ in millions) 2018 2017 2016 Minimum rentals $ 192 $ 194 $ 150 Additional rentals 83 85 67 $ 275 $ 279 $ 217 |
SELF-INSURANCE RESERVE FOR LO_2
SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Self-Insurance Reserve for Losses and Loss Adjustment Expenses Disclosure [Abstract] | |
Self-Insurance Reserve for Losses and Loss Adjustment Expenses | The following table summarizes the activity in our self-insurance reserve for losses and loss adjustment expenses as of year-end 2018 and 2017 : ($ in millions) 2018 2017 Balance at beginning of year $ 487 $ 493 Less: Reinsurance recoverable (3 ) (3 ) Net balance at beginning of year 484 490 Incurred related to: Current year 151 160 Prior years (37 ) (59 ) Total incurred 114 101 Paid related to: Current year (32 ) (30 ) Prior years (96 ) (77 ) Total paid (128 ) (107 ) Net balance at end of year 470 484 Add: Reinsurance recoverable 7 3 Balance at end of year $ 477 $ 487 Current portion classified in “Accrued expenses and other” $ 126 $ 112 Noncurrent portion classified in “Other noncurrent liabilities” 351 375 $ 477 $ 487 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 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 year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Senior Notes: Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 $ 600 $ 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 349 348 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 188 197 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 443 — Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020 547 — Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023 347 — Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028 297 — Commercial paper 2,245 2,371 Credit Facility — — Capital lease obligations 163 171 Other 223 279 $ 9,347 $ 8,238 Less: Current portion of long-term debt (833 ) (398 ) $ 8,514 $ 7,840 |
Future Principal Payments for Debt | The following table presents future principal payments, net of discounts, premiums, and debt issuance costs, for our debt as of year-end 2018 : Debt Principal Payments ($ in millions) Amount 2019 $ 833 2020 912 2021 3,108 2022 1,114 2023 695 Thereafter 2,685 Balance at year-end 2018 $ 9,347 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Obligation, Fair Value of Plans, the Funded Status and the Accumulated Benefit Obligation of Defined Benefit Pension and Postretirement Benefit Plans | The following tables show changes in plan assets and accumulated benefit obligations and the funded status of our defined benefit pension and other postretirement benefit plans at year-end 2018 and 2017 : Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits ($ in millions) 2018 2017 2018 2017 2018 2017 Plan Assets Beginning fair value of plan assets $ — $ — $ 294 $ 262 $ — $ — Actual return on plan assets, net of expenses — — (16 ) 29 — — Employer contribution 2 2 — 2 1 1 Participant contributions — — — — 1 — Plan settlement (1) — — (62 ) — — — Effect of foreign exchange rates — — (6 ) 10 — — Benefits paid (2 ) (2 ) (8 ) (9 ) (2 ) (1 ) Ending fair value of plan assets $ — $ — $ 202 $ 294 $ — $ — Accumulated Benefit Obligations Beginning benefit obligations $ 21 $ 21 $ 246 $ 229 $ 14 $ 15 Interest cost 1 1 8 8 1 — Actuarial (gain) loss (1 ) 1 2 10 (2 ) — Participant contributions — — — — 1 — Plan settlement (1) — — (55 ) — — — Effect of foreign exchange rates — — (4 ) 8 — — Benefits paid (2 ) (2 ) (9 ) (9 ) (2 ) (1 ) Ending accumulated benefit obligations $ 19 $ 21 $ 188 $ 246 $ 12 $ 14 Funded Status Overfunded (underfunded) at year-end $ (19 ) $ (21 ) $ 14 $ 48 $ (12 ) $ (14 ) (1) In 2018, we transferred the benefit obligations of one of our international pension plans located in the U.K. to Legal & General Assurance Society Limited (“LGAS”). The transaction met the criteria for settlement accounting, and accordingly, we removed the plan asset and liability from our Balance Sheet at year-end 2018. We reported the loss of $20 million in the “Merger-related costs and charges” caption of our Income Statement because we had assumed the plan in “Buy-In” status as a result of the Starwood Combination. |
Schedule of Amounts Recognized in Balance Sheet | The following table shows the classification of overfunded and (underfunded) amounts in our Balance Sheets at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Other noncurrent assets $ 21 $ 56 Accrued expenses and other (3 ) (3 ) Other noncurrent liabilities (35 ) (40 ) $ (17 ) $ 13 |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following table shows the benefit obligations for pension plans with accumulated benefit obligations that exceed the fair value of plan assets: Domestic Pension Benefits Foreign Pension Benefits ($ in millions) 2018 2017 2018 2017 Projected benefit obligation $ 19 $ 21 $ 8 $ 8 Accumulated benefit obligation 19 21 7 7 Fair value of plan assets — — — — |
Assumptions Used | The weighted average assumptions used to determine benefit obligations at year-end 2018 and 2017 were as follows: Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits 2018 2017 2018 2017 2018 2017 Discount rate 4.25 % 3.50 % 3.88 % 3.30 % 4.24 % 3.50 % Rate of compensation increase (1) n/a n/a 3.02 % 3.02 % n/a n/a (1) Rate of compensation increase is not applicable to domestic pension benefits as all domestic plans are frozen and do not accrue additional benefits, or to other postretirement benefits as it is not an input in the benefit obligation determination. |
Fair Value Hierarchy of the Plan Assets Measured at Fair Value on a Recurring Basis | The following tables present our fair value hierarchy of plan assets at year-end 2018 and 2017 : At Year-End 2018 At Year-End 2017 ($ in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Mutual funds $ 76 $ — $ — $ 76 $ 86 $ — $ — $ 86 Collective trusts — 1 36 37 — 1 101 102 Equity index trusts 86 — — 86 94 — — 94 Money markets — 2 — 2 1 9 — 10 Bond index funds — 1 — 1 — 2 — 2 $ 162 $ 4 $ 36 $ 202 $ 181 $ 12 $ 101 $ 294 |
Anticipated Pension and Postretirement Benefit Plan Payments | The following table shows our expected future pension and other postretirement benefit plan payments for the next ten years: ($ in millions) Domestic Pension Benefits Foreign Pension Benefits Other Postretirement Benefits Total 2019 $ 2 $ 17 $ 1 $ 20 2020 2 9 1 12 2021 2 10 1 13 2022 2 10 1 13 2023 1 11 1 13 2024-2028 7 55 5 67 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Composition of Intangible Assets, Finite-Lived | The following table details the composition of our intangible assets at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Definite-lived Intangible Assets Costs incurred to obtain contracts with customers $ 1,347 $ 1,137 Contracts acquired in business combinations and other 1,983 2,052 3,330 3,189 Accumulated amortization (674 ) (499 ) 2,656 2,690 Indefinite-lived Intangible Brand Assets 5,724 5,854 $ 8,380 $ 8,544 |
Composition of Intangible Assets, Indefinite-Lived | The following table details the composition of our intangible assets at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Definite-lived Intangible Assets Costs incurred to obtain contracts with customers $ 1,347 $ 1,137 Contracts acquired in business combinations and other 1,983 2,052 3,330 3,189 Accumulated amortization (674 ) (499 ) 2,656 2,690 Indefinite-lived Intangible Brand Assets 5,724 5,854 $ 8,380 $ 8,544 |
Carrying Amount of Goodwill | The following table details the carrying amount of our goodwill at year-end 2018 and 2017 : ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Goodwill Balance at year-end 2017 $ 3,585 $ 1,769 $ 1,928 $ 1,925 $ 9,207 Foreign currency translation (19 ) (14 ) (66 ) (69 ) (168 ) Balance at year-end 2018 $ 3,566 $ 1,755 $ 1,862 $ 1,856 $ 9,039 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Composition of Property and Equipment Balances | The following table presents the composition of our property and equipment balances at year-end 2018 and 2017 : ($ in millions) At Year-End 2018 At Year-End 2017 Land $ 591 $ 601 Buildings and leasehold improvements 1,275 1,052 Furniture and equipment 1,439 1,121 Construction in progress 168 116 3,473 2,890 Accumulated depreciation (1,517 ) (1,097 ) $ 1,956 $ 1,793 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Notes Receivable Expected Future Principal Payments | The following table presents the expected future principal payments, net of reserves and unamortized discounts, as well as interest rates for our notes receivable as of year-end 2018 : Notes Receivable Principal Payments ($ in millions) Amount 2019 $ 6 2020 62 2021 2 2022 2 2023 — Thereafter 59 Balance at year-end 2018 $ 131 Weighted average interest rate at year-end 2018 5.9% Range of stated interest rates at year-end 2018 0 - 9% |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 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: At Year-End 2018 At Year-End 2017 ($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value Senior, mezzanine, and other loans $ 125 $ 116 $ 142 $ 130 Total noncurrent financial assets $ 125 $ 116 $ 142 $ 130 Senior Notes $ (5,928 ) $ (5,794 ) $ (5,087 ) $ (5,126 ) Commercial paper (2,245 ) (2,245 ) (2,371 ) (2,371 ) Other long-term debt (184 ) (182 ) (217 ) (221 ) Other noncurrent liabilities (153 ) (153 ) (178 ) (178 ) Total noncurrent financial liabilities $ (8,510 ) $ (8,374 ) $ (7,853 ) $ (7,896 ) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income Activity | The following table details the accumulated other comprehensive loss activity for 2018 , 2017 , and 2016 : ($ in millions) Foreign Currency Translation Adjustments Derivative Instrument Adjustments Available-For-Sale Securities Unrealized Adjustments Pension and Postretirement Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2015 $ (192 ) $ (8 ) $ 4 $ — $ (196 ) Other comprehensive (loss) income before reclassifications (1) (311 ) 1 2 5 (303 ) Reclassification of losses — 2 — — 2 Net other comprehensive (loss) income (311 ) 3 2 5 (301 ) Balance at year-end 2016 $ (503 ) $ (5 ) $ 6 $ 5 $ (497 ) Other comprehensive income (loss) before reclassifications (1) 478 (14 ) (2 ) 7 469 Reclassification of losses 2 9 — — 11 Net other comprehensive income (loss) 480 (5 ) (2 ) 7 480 Balance at year-end 2017 $ (23 ) $ (10 ) $ 4 $ 12 $ (17 ) Other comprehensive (loss) income before reclassifications (1) (391 ) 12 — (8 ) (387 ) Reclassification of losses 11 6 — — 17 Net other comprehensive (loss) income (380 ) 18 — (8 ) (370 ) Adoption of ASU 2016-01 — — (4 ) — (4 ) Balance at year-end 2018 $ (403 ) $ 8 $ — $ 4 $ (391 ) (1) Other comprehensive (loss) income before reclassifications for foreign currency translation adjustments includes gains (losses) on intra-entity foreign currency transactions that are of a long-term investment nature of $14 million for 2018 , $(147) million for 2017 , and $69 million for 2016 . |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Revenues | Segment Revenues The following tables present our revenues disaggregated by major revenue stream as of year-end 2018 , year-end 2017 , and year-end 2016 : 2018 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 1,255 $ 903 $ 479 $ 518 $ 3,155 Contract investment amortization (33 ) (12 ) (2 ) (11 ) (58 ) Net fee revenues 1,222 891 477 507 3,097 Owned, leased, and other revenue 593 128 182 668 1,571 Cost reimbursement revenue 11,257 2,198 459 1,091 15,005 Total segment revenue $ 13,072 $ 3,217 $ 1,118 $ 2,266 $ 19,673 Unallocated corporate 1,085 Total revenue $ 20,758 2017 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 1,202 $ 842 $ 431 $ 476 $ 2,951 Contract investment amortization (25 ) (11 ) (1 ) (13 ) (50 ) Net fee revenues 1,177 831 430 463 2,901 Owned, leased, and other revenue 697 132 191 685 1,705 Cost reimbursement revenue 11,035 2,256 433 1,140 14,864 Total segment revenue $ 12,909 $ 3,219 $ 1,054 $ 2,288 $ 19,470 Unallocated corporate 982 Total revenue $ 20,452 2016 ($ in millions) North American Full-Service North American Limited-Service Asia Pacific Other International Total Gross fee revenues $ 856 $ 746 $ 231 $ 312 $ 2,145 Contract investment amortization (21 ) (9 ) (1 ) (9 ) (40 ) Net fee revenues 835 737 230 303 2,105 Owned, leased, and other revenue 390 119 127 438 1,074 Cost reimbursement revenue 8,199 2,038 274 922 11,433 Total segment revenue $ 9,424 $ 2,894 $ 631 $ 1,663 $ 14,612 Unallocated corporate 795 Total revenue $ 15,407 |
Segment Profits | Segment Profits ($ in millions) 2018 2017 2016 North American Full-Service $ 1,153 $ 1,238 $ 801 North American Limited-Service 786 827 702 Asia Pacific 456 361 160 Other International 570 420 222 Other unallocated corporate (302 ) 386 (447 ) Interest expense, net of interest income (318 ) (250 ) (199 ) Income taxes (438 ) (1,523 ) (431 ) Net income $ 1,907 $ 1,459 $ 808 |
Depreciation and Amortization | Depreciation, Amortization, and Other ($ in millions) 2018 2017 2016 North American Full-Service $ 82 $ 82 $ 43 North American Limited-Service 15 14 13 Asia Pacific 26 32 8 Other International 70 71 34 Unallocated corporate 33 30 21 $ 226 $ 229 $ 119 |
Capital Expenditures | Capital Expenditures ($ in millions) 2018 2017 2016 North American Full-Service $ 290 $ 21 $ 35 North American Limited-Service 15 10 7 Asia Pacific 6 12 1 Other International 40 42 38 Unallocated corporate 205 155 118 $ 556 $ 240 $ 199 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Financial Data Resulting from Transactions with Related Parties, Income Statement Data | The following tables present financial data resulting from transactions with these related parties: Income Statement Data ($ in millions) 2018 2017 2016 Base management fees $ 25 $ 28 $ 18 Incentive management fees 12 15 10 Contract investment amortization (2 ) (2 ) (2 ) Owned, leased, and other revenue — 2 — Cost reimbursement revenue 332 356 222 Depreciation, amortization, and other (2 ) (3 ) (1 ) General, administrative, and other — (1 ) — Reimbursed expenses (337 ) (356 ) (222 ) Gains and other income, net 51 658 1 Interest income — 4 5 Equity in earnings 103 40 9 |
Financial Data Resulting from Transactions with Related Parties, Balance Sheet Data | Balance Sheet Data ($ in millions) At Year-End 2018 At Year-End 2017 Current assets Accounts and notes receivable, net $ 31 $ 42 Prepaid expenses and other 1 — Intangible assets Contract acquisition costs and other 32 39 Equity method investments 732 734 Other noncurrent assets 10 17 Current liabilities Accounts payable (4 ) (11 ) Accrued expenses and other (16 ) (17 ) Deferred tax liabilities (20 ) (41 ) Other noncurrent liabilities (11 ) (4 ) |
Summarized Information for the Entities Equity Method Investments, Income Statement | The following tables present summarized financial information for the entities in which we have equity method investments: ($ in millions) 2018 2017 2016 (1) Sales $ 932 $ 1,176 $ 747 Net income 221 222 101 |
Summarized Information for the Entities Equity Method Investments, Balance Sheet | ($ in millions) At Year-End 2018 At Year-End 2017 Assets (primarily composed of hotel real estate managed by us) $ 2,724 $ 2,234 Liabilities 1,843 1,649 (1) 2016 sales and net income for entities in which we acquired an investment through the Starwood Combination are for the period from the Merger Date to year-end 2016. |
SUPPLEMENTARY DATA QUARTERLY _2
SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA - UNAUDITED (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | ($ in millions, except per share data) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Revenues $ 5,009 $ 5,409 $ 5,051 $ 5,289 $ 20,758 Operating income $ 530 $ 818 $ 596 $ 422 $ 2,366 Net income $ 420 $ 667 $ 503 $ 317 $ 1,907 Basic earnings per share (1) $ 1.17 $ 1.89 $ 1.45 $ 0.93 $ 5.45 Diluted earnings per share (1) $ 1.16 $ 1.87 $ 1.43 $ 0.92 $ 5.38 ($ in millions, except per share data) 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Revenues $ 4,912 $ 5,211 $ 5,078 $ 5,251 $ 20,452 Operating income $ 546 $ 744 $ 790 $ 424 $ 2,504 Net income $ 371 $ 489 $ 485 $ 114 $ 1,459 Basic earnings per share (1) $ 0.96 $ 1.29 $ 1.30 $ 0.31 $ 3.89 Diluted earnings per share (1) $ 0.95 $ 1.28 $ 1.29 $ 0.31 $ 3.84 (1) The sum of the earnings per share for the four quarters may differ from annual earnings per share due to the required method of computing the weighted average shares in interim periods. In the 2018 fourth quarter, we identified errors related to our Loyalty Program, which resulted in the understatement of cost reimbursement revenue, net of reimbursed expenses in our previously issued financial statements for the 2018 first, second, and third quarters. Correction of the errors resulted in a $99 million increase to net income for the 2018 first three quarters combined. We concluded that the errors were and continue to be immaterial to those financial statements. We revised each prior period presented in the 2018 quarterly financial data table above to reflect the correction of the immaterial errors because recording the out of period adjustments would have been material to the 2018 fourth quarter. The table below presents the effects of our adjustments. |
Schedule of Effect of Prior Period Adjustments | The table below presents the effects of our adjustments. 2018 First Quarter Second Quarter Third Quarter ($ in millions, except per share amounts) As Previously Reported Adjustments As Adjusted As Previously Reported Adjustments As Adjusted As Previously Reported Adjustments As Adjusted REVENUES Base management fees $ 273 $ — $ 273 $ 300 $ — $ 300 $ 279 $ — $ 279 Franchise fees 417 — 417 475 — 475 502 — 502 Incentive management fees 155 — 155 176 — 176 151 — 151 Gross fee revenues 845 — 845 951 — 951 932 — 932 Contract investment amortization (18 ) — (18 ) (13 ) — (13 ) (13 ) — (13 ) Net fee revenues 827 — 827 938 — 938 919 — 919 Owned, leased, and other revenue 406 — 406 423 — 423 397 — 397 Cost reimbursement revenue 3,773 3 3,776 3,985 63 4,048 3,733 2 3,735 5,006 3 5,009 5,346 63 5,409 5,049 2 5,051 OPERATING COSTS AND EXPENSES Owned, leased, and other-direct 336 — 336 334 — 334 315 — 315 Depreciation, amortization, and other 54 — 54 58 — 58 52 — 52 General, administrative, and other 247 — 247 217 — 217 221 — 221 Merger-related costs and charges 34 — 34 18 — 18 12 — 12 Reimbursed expenses 3,835 (27 ) 3,808 3,979 (15 ) 3,964 3,879 (24 ) 3,855 4,506 (27 ) 4,479 4,606 (15 ) 4,591 4,479 (24 ) 4,455 OPERATING INCOME 500 30 530 740 78 818 570 26 596 Gains and other income, net 59 — 59 114 — 114 18 — 18 Interest expense (75 ) — (75 ) (85 ) — (85 ) (86 ) — (86 ) Interest income 5 — 5 6 — 6 5 — 5 Equity in earnings 13 — 13 21 — 21 61 — 61 INCOME BEFORE INCOME TAXES 502 30 532 796 78 874 568 26 594 Provision for income taxes (104 ) (8 ) (112 ) (186 ) (21 ) (207 ) (85 ) (6 ) (91 ) NET INCOME $ 398 $ 22 $ 420 $ 610 $ 57 $ 667 $ 483 $ 20 $ 503 EARNINGS PER SHARE Earnings per share - basic $ 1.11 $ 0.06 $ 1.17 $ 1.73 $ 0.16 $ 1.89 $ 1.39 $ 0.06 $ 1.45 Earnings per share - diluted $ 1.09 $ 0.07 $ 1.16 $ 1.71 $ 0.16 $ 1.87 $ 1.38 $ 0.05 $ 1.43 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | |
Loyalty Program Error | Effect of Prior Period Adjustment | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Net income | $ 20 | $ 57 | $ 22 | $ 99 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Jan. 01, 2018 | Jan. 01, 2016 | |
Significant Accounting Policies [Line Items] | ||||||
Advertising costs | $ 660,000,000 | $ 562,000,000 | $ 409,000,000 | |||
Normal collection period for accounts receivable | 30 days | |||||
Accounts receivable reserve | $ 66,000,000 | 46,000,000 | ||||
Goodwill impairment charge | $ 0 | 0 | 0 | |||
Discount rate | 3.00% | |||||
Accounting Standards Update 2016-16 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | $ 372,000,000 | |||||
Accounting Standards Update 2016-16 | Retained Earnings | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | 372,000,000 | |||||
Accounting Standards Update 2016-01 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | 0 | |||||
Accounting Standards Update 2016-01 | Retained Earnings | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | $ 4,000,000 | |||||
Accounting Standards Update 2014-09 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | $ (264,000,000) | |||||
Accounting Standards Update 2014-09 | Retained Earnings | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative-effect adjustment | $ (264,000,000) | |||||
Profit Sharing | ||||||
Significant Accounting Policies [Line Items] | ||||||
Compensation costs from profit sharing | $ 224,000,000 | 119,000,000 | $ 91,000,000 | |||
Scenario, Forecast | Minimum | Accounting Standards Update 2016-02 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Right-of-use operating asset | $ 1,000,000,000 | |||||
Operating lease liability | 1,000,000,000 | |||||
Scenario, Forecast | Maximum | Accounting Standards Update 2016-02 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Right-of-use operating asset | 1,100,000,000 | |||||
Operating lease liability | $ 1,100,000,000 | |||||
Deferred revenue | ||||||
Significant Accounting Policies [Line Items] | ||||||
Change in customer contract liability | 146,000,000 | |||||
Customer contract liability | 831,000,000 | 685,000,000 | ||||
Guest loyalty program | ||||||
Significant Accounting Policies [Line Items] | ||||||
Change in customer contract liability | 521,000,000 | |||||
Customer contract liability | 5,461,000,000 | 4,940,000,000 | ||||
Revenue recognized from customer contract liability | 1,897,000,000 | |||||
Costs Incurred to Fulfill Contracts | ||||||
Significant Accounting Policies [Line Items] | ||||||
Capitalized costs | $ 324,000,000 | $ 295,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect of Adoption of ASU 2014-09 on Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
REVENUES | ||||||||||||||
Total revenue | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | |||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Depreciation, amortization, and other | 52 | 58 | 54 | 226 | [1] | 229 | [1] | 119 | [1] | |||||
General, administrative, and other | 221 | 217 | 247 | 927 | [1] | 921 | [1] | 743 | [1] | |||||
Merger-related costs and charges | 12 | 18 | 34 | 155 | 159 | 386 | ||||||||
Costs and Expenses, Total | 4,455 | 4,591 | 4,479 | 18,392 | 17,948 | 13,983 | ||||||||
OPERATING INCOME | 422 | 596 | 818 | 530 | 424 | 790 | 744 | 546 | 2,366 | 2,504 | 1,424 | |||
Gains and other income, net | 18 | 114 | 59 | 194 | [1] | 688 | [1] | 5 | [1] | |||||
Interest expense | (86) | (85) | (75) | (340) | (288) | (234) | ||||||||
Interest income | 5 | 6 | 5 | 22 | [1] | 38 | [1] | 35 | [1] | |||||
Equity in earnings | 61 | 21 | 13 | 103 | [1] | 40 | [1] | 9 | [1] | |||||
INCOME BEFORE INCOME TAXES | 594 | 874 | 532 | 2,345 | 2,982 | 1,239 | ||||||||
Provision for income taxes | (91) | (207) | (112) | (438) | (1,523) | (431) | ||||||||
NET INCOME | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | |||
Earnings per share - basic (in USD per share) | $ 0.93 | $ 1.45 | $ 1.89 | $ 1.17 | $ 0.31 | $ 1.30 | $ 1.29 | $ 0.96 | $ 5.45 | $ 3.89 | $ 2.78 | |||
Earnings per share - diluted (in USD per share) | $ 0.92 | $ 1.43 | $ 1.87 | $ 1.16 | $ 0.31 | $ 1.29 | $ 1.28 | $ 0.95 | $ 5.38 | $ 3.84 | $ 2.73 | |||
Base management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | $ 279 | $ 300 | $ 273 | $ 1,140 | [1] | $ 1,102 | [1] | $ 806 | [1] | |||||
Franchise fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 502 | 475 | 417 | 1,849 | 1,586 | 1,157 | ||||||||
Incentive management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 649 | [1] | 607 | [1] | 425 | [1] | |||||
Net fee revenues | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,638 | 3,295 | 2,388 | ||||||||
Contract investment amortization | (13) | (13) | (18) | (58) | [1] | (50) | [1] | (40) | [1] | |||||
Total revenue | 919 | 938 | 827 | 3,580 | 3,245 | 2,348 | ||||||||
Owned, leased, and other | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 397 | 423 | 406 | 1,635 | [1] | 1,752 | [1] | 1,125 | [1] | |||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | 315 | 334 | 336 | 1,306 | 1,411 | 901 | ||||||||
Reimbursements | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 3,735 | 4,048 | 3,776 | 15,543 | [1] | 15,455 | [1] | 11,934 | [1] | |||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | 3,855 | 3,964 | 3,808 | $ 15,778 | [1] | 15,228 | [1] | 11,834 | [1] | |||||
As Previously Reported | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 5,049 | 5,346 | 5,006 | 22,894 | 17,072 | |||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Depreciation, amortization, and other | 52 | 58 | 54 | 290 | 168 | |||||||||
General, administrative, and other | 221 | 217 | 247 | 894 | 704 | |||||||||
Merger-related costs and charges | 12 | 18 | 34 | 159 | 386 | |||||||||
Costs and Expenses, Total | 4,479 | 4,606 | 4,506 | 20,535 | 15,704 | |||||||||
OPERATING INCOME | 570 | 740 | 500 | 2,359 | 1,368 | |||||||||
Gains and other income, net | 18 | 114 | 59 | 688 | 5 | |||||||||
Interest expense | (86) | (85) | (75) | (288) | (234) | |||||||||
Interest income | 5 | 6 | 5 | 38 | 35 | |||||||||
Equity in earnings | 61 | 21 | 13 | 39 | 10 | |||||||||
INCOME BEFORE INCOME TAXES | 568 | 796 | 502 | 2,836 | 1,184 | |||||||||
Provision for income taxes | (85) | (186) | (104) | (1,464) | (404) | |||||||||
NET INCOME | $ 483 | $ 610 | $ 398 | $ 1,372 | $ 780 | |||||||||
Earnings per share - basic (in USD per share) | $ 1.39 | $ 1.73 | $ 1.11 | $ 3.66 | $ 2.68 | |||||||||
Earnings per share - diluted (in USD per share) | $ 1.38 | $ 1.71 | $ 1.09 | $ 3.61 | $ 2.64 | |||||||||
As Previously Reported | Base management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | $ 279 | $ 300 | $ 273 | $ 1,102 | $ 806 | |||||||||
As Previously Reported | Franchise fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 502 | 475 | 417 | 1,618 | 1,169 | |||||||||
As Previously Reported | Incentive management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 607 | 425 | |||||||||
As Previously Reported | Net fee revenues | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,327 | 2,400 | |||||||||
Contract investment amortization | (13) | (13) | (18) | 0 | 0 | |||||||||
Total revenue | 919 | 938 | 827 | 3,327 | 2,400 | |||||||||
As Previously Reported | Owned, leased, and other | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 397 | 423 | 406 | 1,802 | 1,126 | |||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | 315 | 334 | 336 | 1,427 | 900 | |||||||||
As Previously Reported | Reimbursements | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | 3,733 | 3,985 | 3,773 | 17,765 | 13,546 | |||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | $ 3,879 | $ 3,979 | $ 3,835 | 17,765 | 13,546 | |||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | (2,442) | (1,665) | ||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Depreciation, amortization, and other | (61) | (49) | ||||||||||||
General, administrative, and other | 27 | 39 | ||||||||||||
Merger-related costs and charges | 0 | 0 | ||||||||||||
Costs and Expenses, Total | (2,587) | (1,721) | ||||||||||||
OPERATING INCOME | 145 | 56 | ||||||||||||
Gains and other income, net | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | ||||||||||||
Interest income | 0 | 0 | ||||||||||||
Equity in earnings | 1 | (1) | ||||||||||||
INCOME BEFORE INCOME TAXES | 146 | 55 | ||||||||||||
Provision for income taxes | (59) | (27) | ||||||||||||
NET INCOME | $ 87 | $ 28 | ||||||||||||
Earnings per share - basic (in USD per share) | $ 0.23 | $ 0.10 | ||||||||||||
Earnings per share - diluted (in USD per share) | $ 0.23 | $ 0.09 | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Base management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | $ 0 | $ 0 | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Franchise fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | (32) | (12) | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Incentive management fees | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | 0 | 0 | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Net fee revenues | ||||||||||||||
REVENUES | ||||||||||||||
Gross fee revenues | (32) | (12) | ||||||||||||
Contract investment amortization | (50) | (40) | ||||||||||||
Total revenue | (82) | (52) | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Owned, leased, and other | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | (50) | (1) | ||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | (16) | 1 | ||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | Reimbursements | ||||||||||||||
REVENUES | ||||||||||||||
Total revenue | (2,310) | (1,612) | ||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||
Cost of revenues | $ (2,537) | $ (1,712) | ||||||||||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect of Adoption of ASU 2014-09 on Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 |
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | (391) | 478 | (311) | ||||||||
Derivative instrument adjustments, net of tax | 12 | (14) | 1 | ||||||||
Unrealized (loss) gain on available-for-sale securities, net of tax | 0 | (2) | 2 | ||||||||
Pension and postretirement adjustments, net of tax | (8) | 7 | 5 | ||||||||
Reclassification of losses, net of tax | 17 | 11 | 2 | ||||||||
Total other comprehensive (loss) income, net of tax | (370) | 480 | (301) | ||||||||
Comprehensive income | $ 1,537 | 1,939 | 507 | ||||||||
As Previously Reported | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Net income | $ 483 | $ 610 | $ 398 | 1,372 | 780 | ||||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | 478 | (311) | |||||||||
Derivative instrument adjustments, net of tax | (14) | 1 | |||||||||
Unrealized (loss) gain on available-for-sale securities, net of tax | (2) | 2 | |||||||||
Pension and postretirement adjustments, net of tax | 7 | 5 | |||||||||
Reclassification of losses, net of tax | 11 | 2 | |||||||||
Total other comprehensive (loss) income, net of tax | 480 | (301) | |||||||||
Comprehensive income | 1,852 | 479 | |||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Net income | 87 | 28 | |||||||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation adjustments | 0 | 0 | |||||||||
Derivative instrument adjustments, net of tax | 0 | 0 | |||||||||
Unrealized (loss) gain 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 | |||||||||
Total other comprehensive (loss) income, net of tax | 0 | 0 | |||||||||
Comprehensive income | $ 87 | $ 28 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect of Adoption of ASU 2014-09 on Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets | |||
Cash and equivalents | $ 316 | $ 383 | |
Accounts and notes receivable, net | [1] | 2,133 | 1,973 |
Prepaid expenses and other | [1] | 249 | 235 |
Assets held for sale | 8 | 149 | |
Assets, current, total | 2,706 | 2,740 | |
Property and equipment, net | 1,956 | 1,793 | |
Intangible assets | 8,380 | 8,544 | |
Goodwill | 9,039 | 9,207 | |
Goodwill and intangible assets, net, total | 17,419 | 17,751 | |
Equity method investments | [1] | 732 | 734 |
Notes receivable, net | 125 | 142 | |
Deferred tax assets | 171 | 93 | |
Other noncurrent assets | [1] | 587 | 593 |
Total assets | 23,696 | 23,846 | |
Current liabilities | |||
Current portion of long-term debt | 833 | 398 | |
Accounts payable | [1] | 767 | 783 |
Accrued payroll and benefits | 1,345 | 1,214 | |
Accrued expenses and other | [1] | 963 | 1,291 |
Liabilities, current, total | 6,437 | 5,807 | |
Long-term debt | 8,514 | 7,840 | |
Deferred tax liabilities | [1] | 485 | 605 |
Other noncurrent liabilities | [1] | 2,372 | 2,610 |
Shareholders’ equity | |||
Class A Common Stock | 5 | 5 | |
Additional paid-in-capital | 5,814 | 5,770 | |
Retained earnings | 8,982 | 7,242 | |
Treasury stock, at cost | (12,185) | (9,418) | |
Accumulated other comprehensive loss | (391) | (17) | |
Shareholder's equity (deficit) | 2,225 | 3,582 | |
Liabilities and deficit, total | 23,696 | 23,846 | |
Brands | |||
Current assets | |||
Intangible assets | 5,790 | 5,922 | |
Contract acquisition costs and other | |||
Current assets | |||
Intangible assets | [1] | 2,590 | 2,622 |
Guest loyalty program | |||
Current liabilities | |||
Liability for guest loyalty program | 2,529 | 2,121 | |
Contract with customer | 2,932 | 2,819 | |
Deferred revenue | |||
Current liabilities | |||
Contract with customer | $ 731 | 583 | |
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 | ||
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) | ||
Shareholder's equity (deficit) | 3,731 | ||
Liabilities and deficit, total | 23,949 | ||
As Previously Reported | Brands | |||
Current assets | |||
Intangible assets | 5,922 | ||
As Previously Reported | Contract acquisition costs and other | |||
Current assets | |||
Intangible assets | 2,884 | ||
As Previously Reported | Guest loyalty program | |||
Current liabilities | |||
Liability for guest loyalty program | 2,064 | ||
Contract with customer | 2,876 | ||
As Previously Reported | Deferred revenue | |||
Current liabilities | |||
Contract with customer | 145 | ||
Accounting Standards Update 2014-09 | Adoption of ASU | |||
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 | ||
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 | ||
Shareholder's equity (deficit) | (149) | ||
Liabilities and deficit, total | (103) | ||
Accounting Standards Update 2014-09 | Adoption of ASU | Brands | |||
Current assets | |||
Intangible assets | 0 | ||
Accounting Standards Update 2014-09 | Adoption of ASU | Contract acquisition costs and other | |||
Current assets | |||
Intangible assets | (262) | ||
Accounting Standards Update 2014-09 | Adoption of ASU | Guest loyalty program | |||
Current liabilities | |||
Liability for guest loyalty program | 57 | ||
Contract with customer | (57) | ||
Accounting Standards Update 2014-09 | Adoption of ASU | Deferred revenue | |||
Current liabilities | |||
Contract with customer | $ 438 | ||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect of Adoption of ASUs on Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | |||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Depreciation, amortization, and other | 284 | 279 | 159 | |||||||||||||
Share-based compensation | 184 | 181 | 212 | |||||||||||||
Income taxes | (239) | 887 | 103 | |||||||||||||
Contract acquisition costs | (152) | (185) | (76) | |||||||||||||
Merger-related charges | 16 | (124) | 209 | |||||||||||||
Working capital changes | (76) | (30) | (106) | |||||||||||||
(Gain) loss on asset dispositions | (194) | (687) | 1 | |||||||||||||
Other | 107 | 149 | 88 | |||||||||||||
Net cash provided by operating activities | 2,357 | 2,227 | 1,619 | |||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Acquisition of a business, net of cash acquired | 0 | 0 | (2,392) | |||||||||||||
Capital expenditures | (556) | (240) | (199) | |||||||||||||
Dispositions | 479 | 1,418 | 211 | |||||||||||||
Loan advances | (13) | (93) | (32) | |||||||||||||
Loan collections | 48 | 187 | 67 | |||||||||||||
Contract acquisition costs | 0 | 0 | ||||||||||||||
Other | (10) | (61) | (1) | |||||||||||||
Net cash (used in) provided by investing activities | (52) | 1,211 | (2,346) | |||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Commercial paper/Credit Facility, net | (129) | 60 | 1,373 | |||||||||||||
Issuance of long-term debt | 1,646 | 0 | 1,482 | |||||||||||||
Repayment of long-term debt | (397) | (310) | (326) | |||||||||||||
Issuance of Class A Common Stock | 4 | 6 | 34 | |||||||||||||
Dividends paid | (543) | (482) | (374) | |||||||||||||
Purchase of treasury stock | (2,850) | (3,013) | (568) | |||||||||||||
Share-based compensation withholding taxes | (105) | (157) | (100) | |||||||||||||
Other | 0 | 0 | (24) | |||||||||||||
Net cash (used in) provided by financing activities | (2,374) | (3,896) | 1,497 | |||||||||||||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (69) | (458) | 770 | |||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 429 | [1] | 887 | 429 | [1] | 887 | 117 | |||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | $ 360 | [1] | 429 | [1] | 360 | [1] | 429 | [1] | 887 | |||||||
As Previously Reported | ||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net income | $ 483 | $ 610 | 398 | 1,372 | 780 | |||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Depreciation, amortization, and other | 290 | 168 | ||||||||||||||
Share-based compensation | 181 | 212 | ||||||||||||||
Income taxes | 828 | 76 | ||||||||||||||
Contract acquisition costs | 0 | 0 | ||||||||||||||
Merger-related charges | (124) | 113 | ||||||||||||||
Working capital changes | 81 | (77) | ||||||||||||||
(Gain) loss on asset dispositions | (687) | 1 | ||||||||||||||
Other | 117 | 66 | ||||||||||||||
Net cash provided by operating activities | 2,436 | 1,682 | ||||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Acquisition of a business, net of cash acquired | 0 | (2,412) | ||||||||||||||
Capital expenditures | (240) | (199) | ||||||||||||||
Dispositions | 1,418 | 218 | ||||||||||||||
Loan advances | (93) | (32) | ||||||||||||||
Loan collections | 187 | 67 | ||||||||||||||
Contract acquisition costs | (189) | (80) | ||||||||||||||
Other | (63) | 29 | ||||||||||||||
Net cash (used in) provided by investing activities | 1,020 | (2,409) | ||||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Commercial paper/Credit Facility, net | 25 | 1,365 | ||||||||||||||
Issuance of long-term debt | 0 | 1,482 | ||||||||||||||
Repayment of long-term debt | (310) | (326) | ||||||||||||||
Issuance of Class A Common Stock | 6 | 34 | ||||||||||||||
Dividends paid | (482) | (374) | ||||||||||||||
Purchase of treasury stock | (3,013) | (568) | ||||||||||||||
Share-based compensation withholding taxes | (157) | (100) | ||||||||||||||
Other | 0 | (24) | ||||||||||||||
Net cash (used in) provided by financing activities | (3,931) | 1,489 | ||||||||||||||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (475) | 762 | ||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 383 | 858 | 383 | 858 | 96 | |||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | 383 | 383 | 858 | |||||||||||||
Accounting Standards Update 2014-09 | Adoption of ASU | ||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net income | 87 | 28 | ||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Depreciation, amortization, and other | (11) | (9) | ||||||||||||||
Share-based compensation | 0 | 0 | ||||||||||||||
Income taxes | 59 | 27 | ||||||||||||||
Contract acquisition costs | (185) | (76) | ||||||||||||||
Merger-related charges | 0 | 96 | ||||||||||||||
Working capital changes | (128) | (24) | ||||||||||||||
(Gain) loss on asset dispositions | 0 | 0 | ||||||||||||||
Other | 67 | 30 | ||||||||||||||
Net cash provided by operating activities | (191) | (50) | ||||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Acquisition of a business, net of cash acquired | 0 | 0 | ||||||||||||||
Capital expenditures | 0 | 0 | ||||||||||||||
Dispositions | 0 | 0 | ||||||||||||||
Loan advances | 0 | 0 | ||||||||||||||
Loan collections | 0 | 0 | ||||||||||||||
Contract acquisition costs | 189 | 80 | ||||||||||||||
Other | 2 | (30) | ||||||||||||||
Net cash (used in) provided by investing activities | 191 | 50 | ||||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Commercial paper/Credit Facility, net | 0 | 0 | ||||||||||||||
Issuance of long-term debt | 0 | 0 | ||||||||||||||
Repayment of long-term debt | 0 | 0 | ||||||||||||||
Issuance of Class A Common Stock | 0 | 0 | ||||||||||||||
Dividends paid | 0 | 0 | ||||||||||||||
Purchase of treasury stock | 0 | 0 | ||||||||||||||
Share-based compensation withholding taxes | 0 | 0 | ||||||||||||||
Other | 0 | 0 | ||||||||||||||
Net cash (used in) provided by financing activities | 0 | 0 | ||||||||||||||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 0 | 0 | ||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | 0 | 0 | 0 | 0 | 0 | |||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | 0 | 0 | 0 | |||||||||||||
Accounting Standards Updated 2016-18 and 2016-15 | Adoption of ASU | ||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net income | 0 | 0 | ||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Depreciation, amortization, and other | 0 | 0 | ||||||||||||||
Share-based compensation | 0 | 0 | ||||||||||||||
Income taxes | 0 | 0 | ||||||||||||||
Contract acquisition costs | 0 | 0 | ||||||||||||||
Merger-related charges | 0 | 0 | ||||||||||||||
Working capital changes | 17 | (5) | ||||||||||||||
(Gain) loss on asset dispositions | 0 | 0 | ||||||||||||||
Other | (35) | (8) | ||||||||||||||
Net cash provided by operating activities | (18) | (13) | ||||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Acquisition of a business, net of cash acquired | 0 | 20 | ||||||||||||||
Capital expenditures | 0 | 0 | ||||||||||||||
Dispositions | 0 | (7) | ||||||||||||||
Loan advances | 0 | 0 | ||||||||||||||
Loan collections | 0 | 0 | ||||||||||||||
Contract acquisition costs | 0 | 0 | ||||||||||||||
Other | 0 | 0 | ||||||||||||||
Net cash (used in) provided by investing activities | 0 | 13 | ||||||||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Commercial paper/Credit Facility, net | 35 | 8 | ||||||||||||||
Issuance of long-term debt | 0 | 0 | ||||||||||||||
Repayment of long-term debt | 0 | 0 | ||||||||||||||
Issuance of Class A Common Stock | 0 | 0 | ||||||||||||||
Dividends paid | 0 | 0 | ||||||||||||||
Purchase of treasury stock | 0 | 0 | ||||||||||||||
Share-based compensation withholding taxes | 0 | 0 | ||||||||||||||
Other | 0 | 0 | ||||||||||||||
Net cash (used in) provided by financing activities | 35 | 8 | ||||||||||||||
DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 17 | 8 | ||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | $ 46 | $ 29 | 46 | 29 | 21 | |||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | $ 46 | 46 | 29 | |||||||||||||
Guest loyalty program | ||||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Liability for guest loyalty program | $ 520 | 298 | 221 | |||||||||||||
Guest loyalty program | As Previously Reported | ||||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Liability for guest loyalty program | 378 | 343 | ||||||||||||||
Guest loyalty program | Accounting Standards Update 2014-09 | Adoption of ASU | ||||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Liability for guest loyalty program | (80) | (122) | ||||||||||||||
Guest loyalty program | Accounting Standards Updated 2016-18 and 2016-15 | Adoption of ASU | ||||||||||||||||
Adjustments to reconcile to cash provided by operating activities: | ||||||||||||||||
Liability for guest loyalty program | $ 0 | $ 0 | ||||||||||||||
[1] | The 2018 amounts include beginning restricted cash of $46 million at December 31, 2017, and ending restricted cash of $44 million at December 31, 2018, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets. |
DISPOSITIONS AND ACQUISITIONS -
DISPOSITIONS AND ACQUISITIONS - Disposals (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal of equity method investment | $ 42 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal | 132 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | JW Marriott Mexico City | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal from equity method investee | 55 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Ritz Carlton Toronto | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal from equity method investee | 10 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Avendra LLC | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal | 5 | $ 659 | |
Ownership percentage | 55.00% | ||
Procurement services term | 5 years | ||
Gain on disposal, net of tax | $ 425 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Charlotte Marriott City Center | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal | $ 24 | ||
Reimbursed Expenses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Avendra LLC | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Spending from sales proceeds | 115 | ||
Spending from sales proceeds,net of tax | $ 85 |
DISPOSITIONS AND ACQUISITIONS_2
DISPOSITIONS AND ACQUISITIONS - Acquisitions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Sheraton Grand Phoenix | |
Real Estate Properties [Line Items] | |
Acquisition price | $ 255 |
DISPOSITIONS AND ACQUISITIONS_3
DISPOSITIONS AND ACQUISITIONS - Starwood Consideration Transferred (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Sep. 23, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Cash consideration to Starwood shareholders, net of cash acquired of $1,116 | $ 0 | $ 0 | $ 2,392 | |
Starwood Hotels & Resorts | ||||
Business Acquisition [Line Items] | ||||
Equivalent shares of Marriott common stock issued in exchange for Starwood outstanding shares (in shares) | 134.4 | |||
Marriott common stock price as of Merger Date (in USD per share) | $ 68.44 | |||
Fair value of Marriott common stock issued in exchange for Starwood outstanding shares | $ 9,198 | |||
Cash consideration to Starwood shareholders, net of cash acquired of $1,116 | 2,412 | |||
Fair value of Marriott equity-based awards issued in exchange for vested Starwood equity-based awards | 71 | |||
Total consideration transferred, net of cash acquired | 11,681 | |||
Cash acquired | $ 1,116 |
DISPOSITIONS AND ACQUISITIONS_4
DISPOSITIONS AND ACQUISITIONS - Starwood Allocation of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 23, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 9,039 | $ 9,207 | |
Starwood Hotels & Resorts | |||
Business Acquisition [Line Items] | |||
Working capital | $ (236) | ||
Property and equipment, including assets held for sale | 1,706 | ||
Identified intangible assets | 7,238 | ||
Equity and cost method investments | 537 | ||
Other noncurrent assets | 200 | ||
Deferred income taxes, net | (1,464) | ||
Guest loyalty program | (1,638) | ||
Debt | (1,877) | ||
Other noncurrent liabilities | (977) | ||
Net assets acquired | 3,489 | ||
Goodwill | 8,192 | ||
Fair value of assets acquired and liabilities assumed, net | $ 11,681 |
DISPOSITIONS AND ACQUISITIONS_5
DISPOSITIONS AND ACQUISITIONS - Starwood Fair Value and Estimated Useful Lives of Identifiable Intangible Assets (Details) - Starwood Hotels & Resorts $ in Millions | Sep. 23, 2016USD ($) |
Business Acquisition [Line Items] | |
Estimated Fair Value (in millions) | $ 7,238 |
Management Agreements and Lease Contract Intangibles | |
Business Acquisition [Line Items] | |
Estimated Fair Value (in millions) | $ 751 |
Management Agreements and Lease Contract Intangibles | Minimum | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 10 years |
Management Agreements and Lease Contract Intangibles | Maximum | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 25 years |
Franchise Agreements | |
Business Acquisition [Line Items] | |
Estimated Fair Value (in millions) | $ 746 |
Franchise Agreements | Minimum | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 10 years |
Franchise Agreements | Maximum | |
Business Acquisition [Line Items] | |
Estimated Useful Life (in years) | 80 years |
Loyalty Program Marketing Rights | |
Business Acquisition [Line Items] | |
Estimated Fair Value (in millions) | $ 77 |
Estimated Useful Life (in years) | 30 years |
Brands | |
Business Acquisition [Line Items] | |
Estimated Fair Value (in millions) | $ 5,664 |
DISPOSITIONS AND ACQUISITIONS
DISPOSITIONS AND ACQUISITIONS - Starwood Acquisition (Details) - Starwood Hotels & Resorts $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Business Acquisition [Line Items] | |
Pro forma revenue | $ 22,492 |
Pro forma net income | 1,180 |
Pro forma integration costs | $ 113 |
EARNINGS PER SHARE - Reconcili
EARNINGS PER SHARE - Reconciliation of the Earnings (Losses) and Number of Shares Used in Calculations of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Computation of Basic Earnings Per Share | |||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 |
Shares for basic earnings per share (in shares) | 350.1 | 375.2 | 290.9 | ||||||||
Basic earnings per share (in USD per share) | $ 0.93 | $ 1.45 | $ 1.89 | $ 1.17 | $ 0.31 | $ 1.30 | $ 1.29 | $ 0.96 | $ 5.45 | $ 3.89 | $ 2.78 |
Computation of Diluted Earnings Per Share | |||||||||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 |
Shares for basic earnings per share (in shares) | 350.1 | 375.2 | 290.9 | ||||||||
Effect of dilutive securities | |||||||||||
Share-based compensation | 4.1 | 4.7 | 4.8 | ||||||||
Shares for diluted earnings per share (in shares) | 354.2 | 379.9 | 295.7 | ||||||||
Diluted earnings per share (in USD per share) | $ 0.92 | $ 1.43 | $ 1.87 | $ 1.16 | $ 0.31 | $ 1.29 | $ 1.28 | $ 0.95 | $ 5.38 | $ 3.84 | $ 2.73 |
SHARE-BASED COMPENSATION - Add
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares reserved under the stock plan (in shares) | 31 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Period of service after grant date | 1 year | |
Deferred compensation costs | $ 167 | $ 164 |
Weighted average remaining term for grants outstanding | 2 years | |
PSUs | Certain Executive Officers | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
SHARE-BASED COMPENSATION - A_2
SHARE-BASED COMPENSATION - Additional Information on RSUs (Details) - RSUs - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Restricted Stock Activity [Line Items] | |||
Share-based compensation expense (in millions) | $ 170 | $ 172 | $ 204 |
Weighted average grant-date fair value (in USD per share) | $ 132 | $ 85 | $ 66 |
Aggregate intrinsic value of distributed RSUs (in millions) | $ 294 | $ 322 | $ 190 |
SHARE-BASED COMPENSATION - Cha
SHARE-BASED COMPENSATION - Changes in Outstanding RSU Grants (Details) - RSUs - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of RSUs (in millions) | |||
Outstanding beginning balance (in shares) | 5.6 | ||
Granted (in shares) | 1.5 | ||
Distributed (in shares) | (2.1) | ||
Forfeited (in shares) | (0.2) | ||
Outstanding ending balance (in shares) | 4.8 | 5.6 | |
Weighted Average Grant-Date Fair Value (per RSU) | |||
Outstanding beginning balance (in USD per share) | $ 71 | ||
Granted (in USD per share) | 132 | $ 85 | $ 66 |
Distributed (in USD per share) | 69 | ||
Forfeited (in USD per share) | 93 | ||
Outstanding ending balance (in USD per share) | $ 90 | $ 71 |
INCOME TAXES - Components of E
INCOME TAXES - Components of Earnings Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||||
U.S. | $ 1,311 | $ 2,153 | $ 888 | |||
Non-U.S. | 1,034 | 829 | 351 | |||
INCOME BEFORE INCOME TAXES | $ 594 | $ 874 | $ 532 | $ 2,345 | $ 2,982 | $ 1,239 |
INCOME TAXES - Provision for I
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | ||||||
-U.S. Federal | $ (169) | $ (1,253) | $ (203) | |||
-U.S. State | (94) | (152) | (41) | |||
-Non-U.S. | (284) | (178) | (56) | |||
Current income tax expense | (547) | (1,583) | (300) | |||
Deferred | ||||||
-U.S. Federal | 10 | 61 | (80) | |||
-U.S. State | (6) | (33) | (17) | |||
-Non-U.S. | 105 | 32 | (34) | |||
Deferred income tax expense | 109 | 60 | (131) | |||
Provision for income taxes | $ (91) | $ (207) | $ (112) | $ (438) | $ (1,523) | $ (431) |
INCOME TAXES - Additional Info
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Tax benefits from share-based compensation | $ 42 | $ 72 | $ 32 |
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | 497 | 385 | 288 |
Amount of unrecognized tax benefits that is reasonably possible will be reversed in next twelve months | 243 | ||
Interest related to unrecognized tax benefits | 3 | 24 | $ 8 |
Tax credits which expire | 11 | ||
Tax credits which do not expire | 13 | ||
Net operating loss benefits | 10 | $ 6 | |
Net operating losses | 2,595 | ||
Net operating losses subject to expiration | $ 1,712 | ||
Income tax benefit from non-U.S. income | (1.00%) | (7.30%) | (6.10%) |
Non-U.S. pre tax income | $ 1,034 | $ 829 | $ 351 |
Income tax expense (benefit) | 18.70% | 51.10% | 34.80% |
Cash paid for income taxes | $ 678 | $ 636 | $ 293 |
2017 Tax Act, provisional income tax expense (benefit) | (153) | ||
2017 Tax Act, income tax expense (benefit) | (44) | ||
2017 Tax Act, provisional estimated transition tax expense | $ 745 | ||
2017 Tax Act, transition tax expense (benefit) | 3 | ||
2017 Tax Act, transition tax expense (benefit), audit adjustment | (5) | ||
U.S. Issues Currently in Appeals | |||
Income Tax Contingency [Line Items] | |||
Amount of unrecognized tax benefits that is reasonably possible will be reversed in next twelve months | 210 | ||
State and Non-U.S. Audits Expected to be Resolved in 2019 | |||
Income Tax Contingency [Line Items] | |||
Amount of unrecognized tax benefits that is reasonably possible will be reversed in next twelve months | $ 33 | ||
Switzerland, Singapore, and Luxembourg | |||
Income Tax Contingency [Line Items] | |||
Income tax benefit from non-U.S. income | 3.40% | 6.20% | 7.40% |
Non-U.S. pre tax income | $ 432 | $ 576 | $ 271 |
State and Local Jurisdiction [Member] | |||
Income Tax Contingency [Line Items] | |||
Charge for unremitted foreign earnings | $ 29 | ||
International | United States | |||
Income Tax Contingency [Line Items] | |||
Income tax expense (benefit) | 1.40% |
INCOME TAXES - Unrecognized Ta
INCOME TAXES - Unrecognized Tax Benefit Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit at beginning of year | $ 491 | $ 421 | $ 24 |
Additions from Starwood Combination | 387 | ||
Change attributable to tax positions taken in prior years | (3) | ||
Change attributable to tax positions taken in prior years | 37 | 12 | |
Change attributable to tax positions taken during the current period | 148 | 87 | 16 |
Decrease attributable to settlements with taxing authorities | (53) | (28) | (2) |
Decrease attributable to lapse of statute of limitations | (1) | (1) | |
Unrecognized tax benefit at end of year | $ 623 | $ 491 | $ 421 |
INCOME TAXES - Types of Tempor
INCOME TAXES - Types of Temporary Differences and Carry-Forwards that Significantly Effect Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets | ||
Employee benefits | $ 261 | $ 264 |
Net operating loss carry-forwards | 494 | 376 |
Accrued expenses and other reserves | 160 | 161 |
Receivables, net | 12 | 21 |
Tax credits | 24 | 27 |
Loyalty Program | 133 | 31 |
Deferred income | 56 | 17 |
Self-insurance | 0 | 12 |
Other | 13 | 2 |
Deferred tax assets | 1,153 | 911 |
Valuation allowance | (428) | (309) |
Deferred tax assets after valuation allowance | 725 | 602 |
Deferred Tax Liabilities | ||
Joint venture interests | (59) | (33) |
Property and equipment | (85) | (62) |
Intangibles | (876) | (1,019) |
Self-insurance | (19) | 0 |
Deferred tax liabilities | (1,039) | (1,114) |
Net deferred taxes | $ (314) | $ (512) |
INCOME TAXES - Reconciliation
INCOME TAXES - Reconciliation of the U.S. Statutory Tax Rate to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory tax rate | 21.00% | 35.00% | 35.00% |
U.S. state income taxes, net of U.S. federal tax benefit | 2.50% | 3.10% | 3.00% |
Non-U.S. income | (1.00%) | (7.30%) | (6.10%) |
Change in valuation allowance | 2.60% | 2.00% | 0.30% |
Change in uncertain tax positions | 1.00% | 2.20% | 1.40% |
Change in U.S. tax rate | (1.70%) | (5.50%) | 0.00% |
Transition Tax on foreign earnings | 0.10% | 22.80% | 0.00% |
Tax on asset dispositions | (2.90%) | (0.20%) | 0.00% |
Excess tax benefits related to equity awards | (1.80%) | (2.40%) | 0.00% |
Other, net | (1.10%) | 1.40% | 1.20% |
Effective rate | 18.70% | 51.10% | 34.80% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES - Guarantees (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | $ 346 |
Recorded Liability for Guarantees | 119 |
Debt service | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 125 |
Recorded Liability for Guarantees | 17 |
Operating profit | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 212 |
Recorded Liability for Guarantees | 100 |
Other | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 9 |
Recorded Liability for Guarantees | 2 |
Sheraton Grand Chicago Hotel | |
Commitments and Contingencies Disclosure [Line Items] | |
Recorded Liability for Guarantees | 57 |
Sheraton Grand Chicago Hotel | Land and Hotel | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 300 |
Sheraton Grand Chicago Hotel | Land | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 200 |
Not Yet In Effect Condition | Debt service | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 3 |
Not Yet In Effect Condition | Operating profit | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 32 |
Not Yet In Effect Condition | Other | |
Commitments and Contingencies Disclosure [Line Items] | |
Maximum Potential Amount of Future Fundings | 2 |
Accrued Expenses and Other | |
Commitments and Contingencies Disclosure [Line Items] | |
Recorded Liability for Guarantees | 23 |
Other noncurrent liabilities | |
Commitments and Contingencies Disclosure [Line Items] | |
Recorded Liability for Guarantees | $ 96 |
Minimum | |
Commitments and Contingencies Disclosure [Line Items] | |
Guarantee obligations, term | 3 years |
Maximum | |
Commitments and Contingencies Disclosure [Line Items] | |
Guarantee obligations, term | 10 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Commitments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)lawsuit | |
Commitments and Contingencies Disclosure [Line Items] | |
Loan commitment | $ 14 |
Loan commitment funded in 2019 | 5 |
Loan commitment expected to be funded thereafter | 5 |
Letters of credit outstanding | 136 |
Surety bonds issued | 152 |
Information Technology Hardware, Software, Accounting, Finance, and Maintenance Services | |
Commitments and Contingencies Disclosure [Line Items] | |
Purchase obligation | 286 |
Purchase obligation, expected to fund commitments in 2019 | 153 |
Purchase obligation, expected to fund commitments in 2020 | 78 |
Purchase obligation, expected to fund commitments in 2021 | 38 |
Purchase obligation, thereafter | 17 |
Commitments | |
Commitments and Contingencies Disclosure [Line Items] | |
Commitments, funding not expected | 33 |
Data Security Incident | |
Commitments and Contingencies Disclosure [Line Items] | |
Expense related to data security incident | $ 28 |
Insurance recoveries related to data security incident | 25 |
Start-Up Specializing in Evaluation of Travel and Real Estate Related Emerging Technology Companies | Investment in Non-controlling Interest in Partnership | |
Commitments and Contingencies Disclosure [Line Items] | |
Investment commitment | $ 11 |
Investment commitment expected to be funded in 2019 | 3 |
Investment commitment expected to be funded thereafter | $ 6 |
Putative Class Action Lawsuits Related to Data Security Incident | |
Commitments and Contingencies Disclosure [Line Items] | |
Loss Contingency, Pending Claims, Number | lawsuit | 100 |
LEASES - Future Minimum Lease
LEASES - Future Minimum Lease Obligations (Details) - Leased Property $ in Millions | Dec. 31, 2018USD ($) |
Operating Leases | |
2,019 | $ 171 |
2,020 | 170 |
2,021 | 145 |
2,022 | 153 |
2,023 | 139 |
Thereafter | 1,295 |
Total minimum lease payments where we are the primary obligor | 2,073 |
Capital Leases | |
2,019 | 13 |
2,020 | 13 |
2,021 | 13 |
2,022 | 13 |
2,023 | 13 |
Thereafter | 165 |
Total minimum lease payments where we are the primary obligor | 230 |
Less: Amount representing interest | 67 |
Present value of minimum lease payments | $ 163 |
LEASES - Additional Informatio
LEASES - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018renewal_option | |
Operating Leased Assets [Line Items] | |
Initial lease terms | 20 years |
Minimum | |
Operating Leased Assets [Line Items] | |
Number of lease renewal terms | 1 |
Lease renewal terms | 5 years |
Maximum | |
Operating Leased Assets [Line Items] | |
Lease renewal terms | 10 years |
LEASES Composition of Rent Expe
LEASES Composition of Rent Expense Associated with Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Minimum rentals | $ 192 | $ 194 | $ 150 |
Additional rentals | 83 | 85 | 67 |
Operating leases, rent expense, total | $ 275 | $ 279 | $ 217 |
SELF-INSURANCE RESERVE FOR LO_3
SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES - Activity in Self-Insurance Reserves for Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Self-Insurance Reserve for Losses and Loss Adjustment Expenses [Roll Forward] | |||
Balance at beginning of year | $ 487 | $ 493 | |
Less: Reinsurance recoverable | (7) | (3) | $ (3) |
Net balance at beginning of year | 484 | 490 | |
Incurred related to: | |||
Current year | 151 | 160 | |
Prior years | (37) | (59) | |
Total incurred | 114 | 101 | |
Paid related to: | |||
Current year | (32) | (30) | |
Prior years | (96) | (77) | |
Total paid | (128) | (107) | |
Net balance at end of year | 470 | 484 | |
Add: Reinsurance recoverable | 7 | 3 | $ 3 |
Balance at end of year | 477 | 487 | |
Current portion classified in “Accrued expenses and other” | 126 | 112 | |
Noncurrent portion classified in “Other noncurrent liabilities” | $ 351 | $ 375 |
SELF-INSURANCE RESERVE FOR LO_4
SELF-INSURANCE RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Self-Insurance Reserve for Losses and Loss Adjustment Expenses Disclosure [Abstract] | ||
Prior years | $ (37) | $ (59) |
LONG-TERM DEBT - Detail on Lon
LONG-TERM DEBT - Detail on Long-term Debt Balances (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Credit Facility | $ 0 | $ 0 | |
Capital lease obligations | 163 | 171 | |
Long-term debt | 9,347 | 8,238 | |
Less: Current portion of long-term debt | (833) | (398) | |
Long-term debt, noncurrent | 8,514 | 7,840 | |
Commercial paper | |||
Debt Instrument [Line Items] | |||
Commercial paper | 2,245 | 2,371 | |
Other | |||
Debt Instrument [Line Items] | |||
Other | 223 | 279 | |
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 | $ 600 | 598 | |
Series K Notes, interest rate of 3.0%, face amount of $600, maturing March 1, 2019 (effective interest rate of 4.4%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.00% | ||
Senior notes, face amount | $ 600 | ||
Senior notes, effective interest rate | 4.40% | ||
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 L Notes, interest rate of 3.3%, face amount of $350, maturing September 15, 2022 (effective interest rate of 3.4%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.30% | ||
Senior notes, face amount | $ 350 | ||
Senior notes, effective interest rate | 3.40% | ||
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 | $ 349 | 348 | |
Series M Notes, interest rate of 3.4%, face amount of $350, maturing October 15, 2020 (effective interest rate of 3.6%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.40% | ||
Senior notes, face amount | $ 350 | ||
Senior notes, effective interest rate | 3.60% | ||
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 N Notes, interest rate of 3.1%, face amount of $400, maturing October 15, 2021 (effective interest rate of 3.4%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.10% | ||
Senior notes, face amount | $ 400 | ||
Senior notes, effective interest rate | 3.40% | ||
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 O Notes, interest rate of 2.9%, face amount of $450, maturing March 1, 2021 (effective interest rate of 3.1%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 2.90% | ||
Senior notes, face amount | $ 450 | ||
Senior notes, effective interest rate | 3.10% | ||
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 P Notes, interest rate of 3.8%, face amount of $350, maturing October 1, 2025 (effective interest rate of 4.0%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.80% | ||
Senior notes, face amount | $ 350 | ||
Senior notes, effective interest rate | 4.00% | ||
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 Q Notes, interest rate of 2.3%, face amount of $750, maturing January 15, 2022 (effective interest rate of 2.5%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 2.30% | ||
Senior notes, face amount | $ 750 | ||
Senior notes, effective interest rate | 2.50% | ||
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 R Notes, interest rate of 3.1%, face amount of $750, maturing June 15, 2026 (effective interest rate of 3.3%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.10% | ||
Senior notes, face amount | $ 750 | ||
Senior notes, effective interest rate | 3.30% | ||
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 S Notes, interest rate of 6.8%, face amount of $324, matured May 15, 2018 (effective interest rate of 1.7%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 6.80% | ||
Senior notes, face amount | $ 324 | ||
Senior notes, effective interest rate | 1.70% | ||
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 | $ 188 | 197 | |
Series T Notes, interest rate of 7.2%, face amount of $181, maturing December 1, 2019 (effective interest rate of 2.3%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 7.20% | ||
Senior notes, face amount | $ 181 | ||
Senior notes, effective interest rate | 2.30% | ||
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 U Notes, interest rate of 3.1%, face amount of $291, maturing February 15, 2023 (effective interest rate of 3.1%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.10% | ||
Senior notes, face amount | $ 291 | ||
Senior notes, effective interest rate | 3.10% | ||
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 V Notes, interest rate of 3.8%, face amount of $318, maturing March 15, 2025 (effective interest rate of 2.8%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 3.80% | ||
Senior notes, face amount | $ 318 | ||
Senior notes, effective interest rate | 2.80% | ||
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 W Notes, interest rate of 4.5%, face amount of $278, maturing October 1, 2034 (effective interest rate of 4.1%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 4.50% | ||
Senior notes, face amount | $ 278 | ||
Senior notes, effective interest rate | 4.10% | ||
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 | |
Series X Notes, interest rate of 4.0%, face amount of $450, maturing April 15, 2028 (effective interest rate of 4.2%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 4.00% | 4.00% | |
Senior notes, face amount | $ 450 | $ 450 | |
Senior notes, effective interest rate | 4.20% | ||
Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020 (effective interest rate of 3.2% at December 31, 2018) | |||
Debt Instrument [Line Items] | |||
Senior Notes | $ 547 | 0 | |
Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020 (effective interest rate of 3.2% at December 31, 2018) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 0.60% | ||
Senior notes, face amount | $ 550 | ||
Senior notes, effective interest rate | 3.20% | ||
Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023 (effective interest rate of 4.4%) | |||
Debt Instrument [Line Items] | |||
Senior Notes | $ 347 | 0 | |
Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023 (effective interest rate of 4.4%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 4.15% | ||
Senior notes, face amount | $ 350 | ||
Senior notes, effective interest rate | 4.40% | ||
Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028 (effective interest rate of 4.8%) | |||
Debt Instrument [Line Items] | |||
Senior Notes | $ 297 | $ 0 | |
Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028 (effective interest rate of 4.8%) | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes, interest rate | 4.65% | ||
Senior notes, face amount | $ 300 | ||
Senior notes, effective interest rate | 4.80% |
LONG-TERM DEBT - Additional In
LONG-TERM DEBT - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||||
Maximum aggregate borrowings under credit facility (up to) | $ 4,000,000,000 | $ 4,000,000,000 | |||
Debt Instrument [Line Items] | |||||
Cash paid for interest, net of amounts capitalized | 290,000,000 | $ 234,000,000 | $ 165,000,000 | ||
Senior Notes | Series Y Notes, floating rate, face amount of $550, maturing December 1, 2020 (effective interest rate of 3.2% at December 31, 2018) | |||||
Debt Instrument [Line Items] | |||||
Senior notes, face amount | $ 550,000,000 | $ 550,000,000 | |||
Senior notes, interest rate | 0.60% | 0.60% | |||
Senior Notes | Series Z Notes, interest rate of 4.2%, face amount of $350, maturing December 1, 2023 (effective interest rate of 4.4%) | |||||
Debt Instrument [Line Items] | |||||
Senior notes, face amount | $ 350,000,000 | $ 350,000,000 | |||
Senior notes, interest rate | 4.15% | 4.15% | |||
Senior Notes | Series AA Notes, interest rate of 4.7%, face amount of $300, maturing December 1, 2028 (effective interest rate of 4.8%) | |||||
Debt Instrument [Line Items] | |||||
Senior notes, face amount | $ 300,000,000 | $ 300,000,000 | |||
Senior notes, interest rate | 4.65% | 4.65% | |||
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 | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | ||
Senior notes, interest rate | 4.00% | 4.00% | 4.00% | ||
Net proceeds | $ 1,190,000,000 | $ 443,000,000 |
LONG-TERM DEBT - Future Princi
LONG-TERM DEBT - Future Principal Payments for Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 833 | |
2,020 | 912 | |
2,021 | 3,108 | |
2,022 | 1,114 | |
2,023 | 695 | |
Thereafter | 2,685 | |
Long-term debt | $ 9,347 | $ 8,238 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFITS - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected return on plan assets, measurement period | 10 years |
Debt Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target asset allocation | 39.00% |
Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target asset allocation | 39.00% |
Other | |
Defined Benefit Plan Disclosure [Line Items] | |
Target asset allocation | 22.00% |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFITS - Benefit Obligation, Fair Value of Plan Assets, Funded Status of Plan Assets, Projected Benefit Obligations and Accumulated Benefit Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in Plan Assets | ||
Beginning fair value of plan assets | $ 294 | |
Ending fair value of plan assets | 202 | $ 294 |
Change in Benefit Obligation | ||
Overfunded (underfunded) status | (17) | 13 |
Postretirement Benefits | ||
Change in Plan Assets | ||
Beginning fair value of plan assets | 0 | 0 |
Actual return on plan assets, net of expenses | 0 | 0 |
Employer contribution | 1 | 1 |
Participant contributions | 1 | 0 |
Plan settlement | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Benefits paid | (2) | (1) |
Ending fair value of plan assets | 0 | 0 |
Change in Benefit Obligation | ||
Beginning benefit obligations | 14 | 15 |
Interest cost | 1 | 0 |
Actuarial gain | (2) | 0 |
Participant contributions | 1 | 0 |
Plan settlement | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Benefits paid | (2) | (1) |
Ending accumulated benefit obligations | 12 | 14 |
Overfunded (underfunded) status | (12) | (14) |
Domestic | Pension Benefits | ||
Change in Plan Assets | ||
Beginning fair value of plan assets | 0 | 0 |
Actual return on plan assets, net of expenses | 0 | 0 |
Employer contribution | 2 | 2 |
Participant contributions | 0 | 0 |
Plan settlement | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Benefits paid | (2) | (2) |
Ending fair value of plan assets | 0 | 0 |
Change in Benefit Obligation | ||
Beginning benefit obligations | 21 | 21 |
Interest cost | 1 | 1 |
Actuarial gain | (1) | 1 |
Participant contributions | 0 | 0 |
Plan settlement | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Benefits paid | (2) | (2) |
Ending accumulated benefit obligations | 19 | 21 |
Overfunded (underfunded) status | (19) | (21) |
Foreign | Pension Benefits | ||
Change in Plan Assets | ||
Beginning fair value of plan assets | 294 | 262 |
Actual return on plan assets, net of expenses | (16) | 29 |
Employer contribution | 0 | 2 |
Participant contributions | 0 | 0 |
Plan settlement | (62) | 0 |
Effect of foreign exchange rates | (6) | 10 |
Benefits paid | (8) | (9) |
Ending fair value of plan assets | 202 | 294 |
Change in Benefit Obligation | ||
Beginning benefit obligations | 246 | 229 |
Interest cost | 8 | 8 |
Actuarial gain | 2 | 10 |
Participant contributions | 0 | 0 |
Plan settlement | (55) | 0 |
Effect of foreign exchange rates | (4) | 8 |
Benefits paid | (9) | (9) |
Ending accumulated benefit obligations | 188 | 246 |
Overfunded (underfunded) status | 14 | $ 48 |
Loss from settlement | $ 20 |
PENSION AND OTHER POSTRETIREM_5
PENSION AND OTHER POSTRETIREMENT BENEFITS - Classification of Overfunded and (Underfund) Amounts in Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Overfunded (underfunded) status | $ (17) | $ 13 |
Other noncurrent assets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Overfunded (underfunded) status | 21 | 56 |
Accrued expenses and other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Overfunded (underfunded) status | (3) | (3) |
Other noncurrent liabilities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Overfunded (underfunded) status | $ (35) | $ (40) |
PENSION AND OTHER POSTRETIREM_6
PENSION AND OTHER POSTRETIREMENT BENEFITS - Benefit Obligations for Pension Plans with Accumulated Benefit Obligations That Exceed Plan Assets (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Domestic | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | $ 19 | $ 21 |
Accumulated benefit obligation | 19 | 21 |
Fair value of plan assets | 0 | 0 |
Foreign | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation | 8 | 8 |
Accumulated benefit obligation | 7 | 7 |
Fair value of plan assets | $ 0 | $ 0 |
PENSION AND OTHER POSTRETIREM_7
PENSION AND OTHER POSTRETIREMENT BENEFITS - Assumptions Used (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.24% | 3.50% |
Domestic | Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.25% | 3.50% |
Foreign | Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.88% | 3.30% |
Rate of compensation increase | 3.02% | 3.02% |
PENSION AND OTHER POSTRETIREM_8
PENSION AND OTHER POSTRETIREMENT BENEFITS - Fair Value Hierarchy of the Plan Assets Measured at Fair Value Value on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 202 | $ 294 |
Mutual funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 76 | 86 |
Collective trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 37 | 102 |
Equity index trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 86 | 94 |
Money markets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 2 | 10 |
Bond index funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 1 | 2 |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 162 | 181 |
Level 1 | Mutual funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 76 | 86 |
Level 1 | Collective trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 1 | Equity index trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 86 | 94 |
Level 1 | Money markets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 1 |
Level 1 | Bond index funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 4 | 12 |
Level 2 | Mutual funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 2 | Collective trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 1 | 1 |
Level 2 | Equity index trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 2 | Money markets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 2 | 9 |
Level 2 | Bond index funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 1 | 2 |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 36 | 101 |
Level 3 | Mutual funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 3 | Collective trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 36 | 101 |
Level 3 | Equity index trusts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 3 | Money markets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | 0 | 0 |
Level 3 | Bond index funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets | $ 0 | $ 0 |
PENSION AND OTHER POSTRETIREM_9
PENSION AND OTHER POSTRETIREMENT BENEFITS - Anticipated Pension and Postretirement Benefit Plan Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 20 |
2,020 | 12 |
2,021 | 13 |
2,022 | 13 |
2,023 | 13 |
2024-2028 | 67 |
Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 1 |
2,020 | 1 |
2,021 | 1 |
2,022 | 1 |
2,023 | 1 |
2024-2028 | 5 |
Domestic | Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 2 |
2,020 | 2 |
2,021 | 2 |
2,022 | 2 |
2,023 | 1 |
2024-2028 | 7 |
Foreign | Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 17 |
2,020 | 9 |
2,021 | 10 |
2,022 | 10 |
2,023 | 11 |
2024-2028 | $ 55 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Composition of Acquired Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived Intangible Assets, gross | $ 3,330 | $ 3,189 |
Accumulated amortization | (674) | (499) |
Definite-lived Intangible Assets, net | 2,656 | 2,690 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 8,380 | 8,544 |
Indefinite-lived Intangible Brand Assets | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Brands | 5,724 | 5,854 |
Costs incurred to obtain contracts with customers | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived Intangible Assets, gross | 1,347 | 1,137 |
Contracts acquired in business combinations and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived Intangible Assets, gross | $ 1,983 | $ 2,052 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Expected aggregate future amortization expense of intangible assets for 2020 | $ 111 | ||
Expected aggregate future amortization expense of intangible assets for 2021 | 111 | ||
Expected aggregate future amortization expense of intangible assets for 2022 | 111 | ||
Expected aggregate future amortization expense of intangible assets for 2023 | $ 111 | ||
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Range of amortization life of intangible assets | 15 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Range of amortization life of intangible assets | 30 years | ||
Contracts acquired in business combinations and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 111 | $ 116 | $ 31 |
Expected aggregate future amortization expense of intangible assets for next five years | $ 111 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Carrying Amount of Goodwill (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 9,207 |
Foreign currency translation | (168) |
Ending balance | 9,039 |
North American Full-Service | |
Goodwill [Roll Forward] | |
Beginning balance | 3,585 |
Foreign currency translation | (19) |
Ending balance | 3,566 |
North American Limited-Service | |
Goodwill [Roll Forward] | |
Beginning balance | 1,769 |
Foreign currency translation | (14) |
Ending balance | 1,755 |
Asia Pacific | |
Goodwill [Roll Forward] | |
Beginning balance | 1,928 |
Foreign currency translation | (66) |
Ending balance | 1,862 |
Other International | |
Goodwill [Roll Forward] | |
Beginning balance | 1,925 |
Foreign currency translation | (69) |
Ending balance | $ 1,856 |
PROPERTY AND EQUIPMENT - Compo
PROPERTY AND EQUIPMENT - Composition of our Property and Equipment Balances (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,473 | $ 2,890 |
Accumulated depreciation | (1,517) | (1,097) |
Property and equipment, net | 1,956 | 1,793 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 591 | 601 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,275 | 1,052 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,439 | 1,121 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 168 | $ 116 |
PROPERTY AND EQUIPMENT - Addit
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 256 | $ 231 | $ 157 |
Property and equipment, net | 1,956 | 1,793 | |
International Operations | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | 533 | 705 | |
Reimbursed Expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 147 | $ 126 | $ 76 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 40 years |
NOTES RECEIVABLE - Additional
NOTES RECEIVABLE - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Receivables [Abstract] | |||
Investment in impaired loans | $ 45 | $ 95 | |
Allowance for credit losses | 25 | 72 | |
Investment in impaired loans with no related allowance for credit losses | 20 | 23 | |
Average investment in impaired loans | $ 70 | $ 84 | $ 73 |
NOTES RECEIVABLE - Notes Recei
NOTES RECEIVABLE - Notes Receivable Expected Future Principal Payments (Net of Reserves and Unamortized Discounts and Interest Rates) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Receivables [Abstract] | |
2,019 | $ 6 |
2,020 | 62 |
2,021 | 2 |
2,022 | 2 |
2,023 | 0 |
Thereafter | 59 |
Senior, mezzanine, and other loans | $ 131 |
Weighted average interest rate at year-end 2018 | 5.90% |
Range of stated interest rates at year-end 2018, minimum | 0.00% |
Range of stated interest rates at year-end 2018, maximum | 9.00% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying Values and Fair Values of Non-Current Financial Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior, mezzanine, and other loans | $ 125 | $ 142 | |
Other noncurrent liabilities | [1] | (2,372) | (2,610) |
Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior, mezzanine, and other loans | 125 | 142 | |
Total noncurrent financial assets | 125 | 142 | |
Senior Notes | (5,928) | (5,087) | |
Commercial paper | (2,245) | (2,371) | |
Other long-term debt | (184) | (217) | |
Other noncurrent liabilities | (153) | (178) | |
Total noncurrent financial liabilities | (8,510) | (7,853) | |
Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Senior, mezzanine, and other loans | 116 | 130 | |
Total noncurrent financial assets | 116 | 130 | |
Senior Notes | (5,794) | (5,126) | |
Commercial paper | (2,245) | (2,371) | |
Other long-term debt | (182) | (221) | |
Other noncurrent liabilities | (153) | (178) | |
Total noncurrent financial liabilities | $ (8,374) | $ (7,896) | |
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Commercial paper | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Commercial paper, maturity term | 30 days |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Accumulated Other Comprehensive Income Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | $ 3,582 | $ 5,121 | $ (3,590) | |
Other comprehensive income (loss) before reclassifications | (387) | 469 | (303) | |
Reclassification of losses | 17 | 11 | 2 | |
Total other comprehensive (loss) income, net of tax | (370) | 480 | (301) | |
Ending balance | 2,225 | 3,582 | 5,121 | |
Intra-entity foreign currency long-term-investment gains | 14 | (147) | 69 | |
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | (23) | (503) | (192) | |
Other comprehensive income (loss) before reclassifications | (391) | 478 | (311) | |
Reclassification of losses | 11 | 2 | 0 | |
Total other comprehensive (loss) income, net of tax | (380) | 480 | (311) | |
Ending balance | (403) | (23) | (503) | |
Derivative Instrument Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | (10) | (5) | (8) | |
Other comprehensive income (loss) before reclassifications | 12 | (14) | 1 | |
Reclassification of losses | 6 | 9 | 2 | |
Total other comprehensive (loss) income, net of tax | 18 | (5) | 3 | |
Ending balance | 8 | (10) | (5) | |
Available-For-Sale Securities Unrealized Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | 4 | 6 | 4 | |
Other comprehensive income (loss) before reclassifications | 0 | (2) | 2 | |
Reclassification of losses | 0 | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | 0 | (2) | 2 | |
Ending balance | 0 | 4 | 6 | |
Pension and Postretirement Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | 12 | 5 | 0 | |
Other comprehensive income (loss) before reclassifications | (8) | 7 | 5 | |
Reclassification of losses | 0 | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (8) | 7 | 5 | |
Ending balance | 4 | 12 | 5 | |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Beginning balance | (17) | (497) | (196) | |
Total other comprehensive (loss) income, net of tax | (370) | 480 | (301) | |
Ending balance | $ (391) | $ (17) | $ (497) | |
Accounting Standards Update 2016-01 | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | $ 0 | |||
Accounting Standards Update 2016-01 | Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | 0 | |||
Accounting Standards Update 2016-01 | Derivative Instrument Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | 0 | |||
Accounting Standards Update 2016-01 | Available-For-Sale Securities Unrealized Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | (4) | |||
Accounting Standards Update 2016-01 | Pension and Postretirement Adjustments | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | 0 | |||
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent [Roll forward] [Abstract] | ||||
Adoption of ASU | $ (4) |
BUSINESS SEGMENTS - Segment Re
BUSINESS SEGMENTS - Segment Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | |||
Total segment | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 19,673 | 19,470 | 14,612 | |||||||||||
Total segment | International Operations | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 4,246 | 3,830 | 3,187 | |||||||||||
Total segment | North American Full-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 13,072 | 12,909 | 9,424 | |||||||||||
Total segment | North American Limited-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 3,217 | 3,219 | 2,894 | |||||||||||
Total segment | Asia Pacific | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 1,118 | 1,054 | 631 | |||||||||||
Total segment | Other International | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 2,266 | 2,288 | 1,663 | |||||||||||
Unallocated corporate | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 1,085 | 982 | 795 | |||||||||||
Net fee revenues | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,638 | 3,295 | 2,388 | ||||||||
Contract investment amortization | (13) | (13) | (18) | (58) | [1] | (50) | [1] | (40) | [1] | |||||
Total revenue | 919 | 938 | 827 | 3,580 | 3,245 | 2,348 | ||||||||
Net fee revenues | Total segment | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 3,155 | 2,951 | 2,145 | |||||||||||
Contract investment amortization | (58) | (50) | (40) | |||||||||||
Total revenue | 3,097 | 2,901 | 2,105 | |||||||||||
Net fee revenues | Total segment | North American Full-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 1,255 | 1,202 | 856 | |||||||||||
Contract investment amortization | (33) | (25) | (21) | |||||||||||
Total revenue | 1,222 | 1,177 | 835 | |||||||||||
Net fee revenues | Total segment | North American Limited-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 903 | 842 | 746 | |||||||||||
Contract investment amortization | (12) | (11) | (9) | |||||||||||
Total revenue | 891 | 831 | 737 | |||||||||||
Net fee revenues | Total segment | Asia Pacific | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 479 | 431 | 231 | |||||||||||
Contract investment amortization | (2) | (1) | (1) | |||||||||||
Total revenue | 477 | 430 | 230 | |||||||||||
Net fee revenues | Total segment | Other International | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Gross fee revenues | 518 | 476 | 312 | |||||||||||
Contract investment amortization | (11) | (13) | (9) | |||||||||||
Total revenue | 507 | 463 | 303 | |||||||||||
Owned, leased, and other | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 397 | 423 | 406 | 1,635 | [1] | 1,752 | [1] | 1,125 | [1] | |||||
Owned, leased, and other | Total segment | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 1,571 | 1,705 | 1,074 | |||||||||||
Owned, leased, and other | Total segment | North American Full-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 593 | 697 | 390 | |||||||||||
Owned, leased, and other | Total segment | North American Limited-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 128 | 132 | 119 | |||||||||||
Owned, leased, and other | Total segment | Asia Pacific | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 182 | 191 | 127 | |||||||||||
Owned, leased, and other | Total segment | Other International | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 668 | 685 | 438 | |||||||||||
Reimbursements | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | $ 3,735 | $ 4,048 | $ 3,776 | 15,543 | [1] | 15,455 | [1] | 11,934 | [1] | |||||
Reimbursements | Total segment | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 15,005 | 14,864 | 11,433 | |||||||||||
Reimbursements | Total segment | North American Full-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 11,257 | 11,035 | 8,199 | |||||||||||
Reimbursements | Total segment | North American Limited-Service | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 2,198 | 2,256 | 2,038 | |||||||||||
Reimbursements | Total segment | Asia Pacific | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | 459 | 433 | 274 | |||||||||||
Reimbursements | Total segment | Other International | ||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||
Total revenue | $ 1,091 | $ 1,140 | $ 922 | |||||||||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
BUSINESS SEGMENTS - Segment Pr
BUSINESS SEGMENTS - Segment Profits (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | $ 422 | $ 596 | $ 818 | $ 530 | $ 424 | $ 790 | $ 744 | $ 546 | $ 2,366 | $ 2,504 | $ 1,424 |
Interest expense, net of interest income | (318) | (250) | (199) | ||||||||
Income taxes | (91) | (207) | (112) | (438) | (1,523) | (431) | |||||
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | 1,907 | 1,459 | 808 |
Total segment | International Operations | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 1,155 | 837 | 446 | ||||||||
Total segment | Asia Pacific | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 456 | ||||||||||
Total segment | Europe | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 266 | ||||||||||
Total segment | Caribbean and Latin America | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 242 | ||||||||||
Total segment | Middle East And Africa | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 62 | ||||||||||
Total segment | Other Locations | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 129 | ||||||||||
Total segment | North American Full-Service | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 1,153 | 1,238 | 801 | ||||||||
Total segment | North American Limited-Service | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 786 | 827 | 702 | ||||||||
Total segment | Asia Pacific | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 456 | 361 | 160 | ||||||||
Total segment | Other International | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | 570 | 420 | 222 | ||||||||
Unallocated corporate | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segments profits | $ (302) | $ 386 | $ (447) |
BUSINESS SEGMENTS - Depreciati
BUSINESS SEGMENTS - Depreciation and Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | $ 52 | $ 58 | $ 54 | $ 226 | [1] | $ 229 | [1] | $ 119 | [1] |
Total segment | North American Full-Service | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | 82 | 82 | 43 | ||||||
Total segment | North American Limited-Service | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | 15 | 14 | 13 | ||||||
Total segment | Asia Pacific | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | 26 | 32 | 8 | ||||||
Total segment | Other International | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | 70 | 71 | 34 | ||||||
Unallocated corporate | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation, amortization, and other | $ 33 | $ 30 | $ 21 | ||||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
BUSINESS SEGMENTS - Capital Ex
BUSINESS SEGMENTS - Capital Expenditures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 556 | $ 240 | $ 199 |
Total segment | North American Full-Service | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 290 | 21 | 35 |
Total segment | North American Limited-Service | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 15 | 10 | 7 |
Total segment | Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 6 | 12 | 1 |
Total segment | Other International | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 40 | 42 | 38 |
Unallocated corporate | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 205 | $ 155 | $ 118 |
RELATED PARTY TRANSACTIONS - F
RELATED PARTY TRANSACTIONS - Financial Data Resulting from Transactions with Related Parties, Income Statement Data (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Related Party Transaction [Line Items] | ||||||||||||||
Total revenue | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | |||
Depreciation, amortization, and other | (52) | (58) | (54) | (226) | [1] | (229) | [1] | (119) | [1] | |||||
General, administrative, and other | (221) | (217) | (247) | (927) | [1] | (921) | [1] | (743) | [1] | |||||
Gains and other income, net | 18 | 114 | 59 | 194 | [1] | 688 | [1] | 5 | [1] | |||||
Interest income | 5 | 6 | 5 | 22 | [1] | 38 | [1] | 35 | [1] | |||||
Equity in earnings | 61 | 21 | 13 | 103 | [1] | 40 | [1] | 9 | [1] | |||||
Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Depreciation, amortization, and other | (2) | (3) | (1) | |||||||||||
General, administrative, and other | 0 | (1) | 0 | |||||||||||
Gains and other income, net | 51 | 658 | 1 | |||||||||||
Interest income | 0 | 4 | 5 | |||||||||||
Equity in earnings | 103 | 40 | 9 | |||||||||||
Base management fees | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Gross fee revenues | 279 | 300 | 273 | 1,140 | [1] | 1,102 | [1] | 806 | [1] | |||||
Base management fees | Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Gross fee revenues | 25 | 28 | 18 | |||||||||||
Incentive management fees | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 649 | [1] | 607 | [1] | 425 | [1] | |||||
Incentive management fees | Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Gross fee revenues | 12 | 15 | 10 | |||||||||||
Net fee revenues | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,638 | 3,295 | 2,388 | ||||||||
Contract investment amortization | (13) | (13) | (18) | (58) | [1] | (50) | [1] | (40) | [1] | |||||
Total revenue | 919 | 938 | 827 | 3,580 | 3,245 | 2,348 | ||||||||
Net fee revenues | Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Contract investment amortization | (2) | (2) | (2) | |||||||||||
Owned, leased, and other | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total revenue | 397 | 423 | 406 | 1,635 | [1] | 1,752 | [1] | 1,125 | [1] | |||||
Reimbursed expenses | (315) | (334) | (336) | (1,306) | (1,411) | (901) | ||||||||
Owned, leased, and other | Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total revenue | 0 | 2 | 0 | |||||||||||
Reimbursements | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total revenue | 3,735 | 4,048 | 3,776 | 15,543 | [1] | 15,455 | [1] | 11,934 | [1] | |||||
Reimbursed expenses | $ (3,855) | $ (3,964) | $ (3,808) | (15,778) | [1] | (15,228) | [1] | (11,834) | [1] | |||||
Reimbursements | Equity Method Investment | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total revenue | 332 | 356 | 222 | |||||||||||
Reimbursed expenses | $ (337) | $ (356) | $ (222) | |||||||||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
RELATED PARTY TRANSACTIONS -_2
RELATED PARTY TRANSACTIONS - Financial Data Resulting from Transactions with Related Parties, Balance Sheet Data (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets | |||
Accounts and notes receivable, net | [1] | $ 2,133 | $ 1,973 |
Prepaid expenses and other | [1] | 249 | 235 |
Intangible assets | |||
Intangible assets | 8,380 | 8,544 | |
Other noncurrent assets | [1] | 587 | 593 |
Current liabilities | |||
Accounts payable | [1] | (767) | (783) |
Accrued expenses and other | [1] | (963) | (1,291) |
Deferred tax liabilities | [1] | (485) | (605) |
Other noncurrent liabilities | [1] | (2,372) | (2,610) |
Equity Method Investment | |||
Current assets | |||
Accounts and notes receivable, net | 31 | 42 | |
Prepaid expenses and other | 1 | 0 | |
Intangible assets | |||
Equity method investments | 732 | 734 | |
Other noncurrent assets | 10 | 17 | |
Current liabilities | |||
Accounts payable | (4) | (11) | |
Accrued expenses and other | (16) | (17) | |
Deferred tax liabilities | (20) | (41) | |
Other noncurrent liabilities | (11) | (4) | |
Contract acquisition costs and other | |||
Intangible assets | |||
Intangible assets | [1] | 2,590 | 2,622 |
Contract acquisition costs and other | Equity Method Investment | |||
Intangible assets | |||
Intangible assets | $ 32 | $ 39 | |
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Related Party Transactions [Abstract] | ||||
Undistributed earnings | $ 70,000,000 | |||
Carrying amount of equity method investments | [1] | 732,000,000 | $ 734,000,000 | |
Amount by which the fair value of equity method investments exceeds company's share of the book value of the investee's net assets | 419,000,000 | 441 | ||
JWM Family Enterprise, L.P. | ||||
Related Party Transaction [Line Items] | ||||
Management fees | $ 13,000,000 | $ 13,000,000 | $ 13,000,000 | |
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
RELATED PARTY TRANSACTIONS - E
RELATED PARTY TRANSACTIONS - Equity Method Investment Summarized Financial Information, Income Statement (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Sales | $ 932 | $ 1,176 | $ 747 |
Net income | $ 221 | $ 222 | $ 101 |
RELATED PARTY TRANSACTIONS -_3
RELATED PARTY TRANSACTIONS - Equity Method Investment Summarized Financial Information, Balance Sheet (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Assets (primarily composed of hotel real estate managed by us) | $ 2,724 | $ 2,234 |
Liabilities | $ 1,843 | $ 1,649 |
RELATIONSHIP WITH MAJOR CUSTO_2
RELATIONSHIP WITH MAJOR CUSTOMER - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($)property | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)property | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)property | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($) | |
Revenue, Major Customer [Line Items] | |||||||||||
Revenues | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 |
Host Partnerships | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Number of lodging properties | property | 10 | 11 | 10 | 11 | |||||||
Revenues | $ 123 | $ 114 | 100 | ||||||||
Host Hotels & Resorts Inc | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Number of lodging properties | property | 74 | 81 | 74 | 81 | |||||||
Revenues | $ 2,542 | $ 2,671 | $ 2,015 |
SUPPLEMENTARY DATA QUARTERLY _3
SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA - UNAUDITED - Quarterly Financial Data - Unaudited (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenues | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | |
Operating income | 422 | 596 | 818 | 530 | 424 | 790 | 744 | 546 | 2,366 | 2,504 | 1,424 | |
Net income | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | |
Basic earnings per share (in USD per share) | $ 0.93 | $ 1.45 | $ 1.89 | $ 1.17 | $ 0.31 | $ 1.30 | $ 1.29 | $ 0.96 | $ 5.45 | $ 3.89 | $ 2.78 | |
Diluted earnings per share (in USD per share) | $ 0.92 | $ 1.43 | $ 1.87 | $ 1.16 | $ 0.31 | $ 1.29 | $ 1.28 | $ 0.95 | $ 5.38 | $ 3.84 | $ 2.73 | |
Effect of Prior Period Adjustment | Loyalty Program Error | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenues | $ 2 | $ 63 | $ 3 | |||||||||
Operating income | 26 | 78 | 30 | |||||||||
Net income | $ 20 | $ 57 | $ 22 | $ 99 | ||||||||
Basic earnings per share (in USD per share) | $ 0.06 | $ 0.16 | $ 0.06 | |||||||||
Diluted earnings per share (in USD per share) | $ 0.05 | $ 0.16 | $ 0.07 |
SUPPLEMENTARY DATA QUARTERLY _4
SUPPLEMENTARY DATA QUARTERLY FINANCIAL DATA - UNAUDITED - Schedule of Adjustments (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
REVENUES | |||||||||||||||
Total revenue | $ 5,289 | $ 5,051 | $ 5,409 | $ 5,009 | $ 5,251 | $ 5,078 | $ 5,211 | $ 4,912 | $ 20,758 | $ 20,452 | $ 15,407 | ||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Depreciation, amortization, and other | 52 | 58 | 54 | 226 | [1] | 229 | [1] | 119 | [1] | ||||||
General, administrative, and other | 221 | 217 | 247 | 927 | [1] | 921 | [1] | 743 | [1] | ||||||
Merger-related costs and charges | 12 | 18 | 34 | 155 | 159 | 386 | |||||||||
Costs and Expenses, Total | 4,455 | 4,591 | 4,479 | 18,392 | 17,948 | 13,983 | |||||||||
OPERATING INCOME | 422 | 596 | 818 | 530 | 424 | 790 | 744 | 546 | 2,366 | 2,504 | 1,424 | ||||
Gains and other income, net | 18 | 114 | 59 | 194 | [1] | 688 | [1] | 5 | [1] | ||||||
Interest expense | (86) | (85) | (75) | (340) | (288) | (234) | |||||||||
Interest income | 5 | 6 | 5 | 22 | [1] | 38 | [1] | 35 | [1] | ||||||
Equity in earnings | 61 | 21 | 13 | 103 | [1] | 40 | [1] | 9 | [1] | ||||||
INCOME BEFORE INCOME TAXES | 594 | 874 | 532 | 2,345 | 2,982 | 1,239 | |||||||||
Provision for income taxes | (91) | (207) | (112) | (438) | (1,523) | (431) | |||||||||
NET INCOME | $ 317 | $ 503 | $ 667 | $ 420 | $ 114 | $ 485 | $ 489 | $ 371 | $ 1,907 | $ 1,459 | $ 808 | ||||
EARNINGS PER SHARE | |||||||||||||||
Earnings per share - basic (in USD per share) | $ 0.93 | $ 1.45 | $ 1.89 | $ 1.17 | $ 0.31 | $ 1.30 | $ 1.29 | $ 0.96 | $ 5.45 | $ 3.89 | $ 2.78 | ||||
Earnings per share - diluted (in USD per share) | $ 0.92 | $ 1.43 | $ 1.87 | $ 1.16 | $ 0.31 | $ 1.29 | $ 1.28 | $ 0.95 | $ 5.38 | $ 3.84 | $ 2.73 | ||||
As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | $ 5,049 | $ 5,346 | $ 5,006 | $ 22,894 | $ 17,072 | ||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Depreciation, amortization, and other | 52 | 58 | 54 | 290 | 168 | ||||||||||
General, administrative, and other | 221 | 217 | 247 | 894 | 704 | ||||||||||
Merger-related costs and charges | 12 | 18 | 34 | 159 | 386 | ||||||||||
Costs and Expenses, Total | 4,479 | 4,606 | 4,506 | 20,535 | 15,704 | ||||||||||
OPERATING INCOME | 570 | 740 | 500 | 2,359 | 1,368 | ||||||||||
Gains and other income, net | 18 | 114 | 59 | 688 | 5 | ||||||||||
Interest expense | (86) | (85) | (75) | (288) | (234) | ||||||||||
Interest income | 5 | 6 | 5 | 38 | 35 | ||||||||||
Equity in earnings | 61 | 21 | 13 | 39 | 10 | ||||||||||
INCOME BEFORE INCOME TAXES | 568 | 796 | 502 | 2,836 | 1,184 | ||||||||||
Provision for income taxes | (85) | (186) | (104) | (1,464) | (404) | ||||||||||
NET INCOME | $ 483 | $ 610 | $ 398 | $ 1,372 | $ 780 | ||||||||||
EARNINGS PER SHARE | |||||||||||||||
Earnings per share - basic (in USD per share) | $ 1.39 | $ 1.73 | $ 1.11 | $ 3.66 | $ 2.68 | ||||||||||
Earnings per share - diluted (in USD per share) | $ 1.38 | $ 1.71 | $ 1.09 | $ 3.61 | $ 2.64 | ||||||||||
Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | $ 2 | $ 63 | $ 3 | ||||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Depreciation, amortization, and other | 0 | 0 | 0 | ||||||||||||
General, administrative, and other | 0 | 0 | 0 | ||||||||||||
Merger-related costs and charges | 0 | 0 | 0 | ||||||||||||
Costs and Expenses, Total | (24) | (15) | (27) | ||||||||||||
OPERATING INCOME | 26 | 78 | 30 | ||||||||||||
Gains and other income, net | 0 | 0 | 0 | ||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||
Equity in earnings | 0 | 0 | 0 | ||||||||||||
INCOME BEFORE INCOME TAXES | 26 | 78 | 30 | ||||||||||||
Provision for income taxes | (6) | (21) | (8) | ||||||||||||
NET INCOME | $ 20 | $ 57 | $ 22 | $ 99 | |||||||||||
EARNINGS PER SHARE | |||||||||||||||
Earnings per share - basic (in USD per share) | $ 0.06 | $ 0.16 | $ 0.06 | ||||||||||||
Earnings per share - diluted (in USD per share) | $ 0.05 | $ 0.16 | $ 0.07 | ||||||||||||
Base management fees | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | $ 279 | $ 300 | $ 273 | $ 1,140 | [1] | $ 1,102 | [1] | $ 806 | [1] | ||||||
Base management fees | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 279 | 300 | 273 | 1,102 | 806 | ||||||||||
Base management fees | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 0 | 0 | 0 | ||||||||||||
Franchise fees | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 502 | 475 | 417 | 1,849 | 1,586 | 1,157 | |||||||||
Franchise fees | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 502 | 475 | 417 | 1,618 | 1,169 | ||||||||||
Franchise fees | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 0 | 0 | 0 | ||||||||||||
Incentive management fees | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 649 | [1] | 607 | [1] | 425 | [1] | ||||||
Incentive management fees | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 151 | 176 | 155 | 607 | 425 | ||||||||||
Incentive management fees | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 0 | 0 | 0 | ||||||||||||
Net fee revenues | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,638 | 3,295 | 2,388 | |||||||||
Contract investment amortization | (13) | (13) | (18) | (58) | [1] | (50) | [1] | (40) | [1] | ||||||
Total revenue | 919 | 938 | 827 | 3,580 | 3,245 | 2,348 | |||||||||
Net fee revenues | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 932 | 951 | 845 | 3,327 | 2,400 | ||||||||||
Contract investment amortization | (13) | (13) | (18) | 0 | 0 | ||||||||||
Total revenue | 919 | 938 | 827 | 3,327 | 2,400 | ||||||||||
Net fee revenues | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Gross fee revenues | 0 | 0 | 0 | ||||||||||||
Contract investment amortization | 0 | 0 | 0 | ||||||||||||
Total revenue | 0 | 0 | 0 | ||||||||||||
Owned, leased, and other | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 397 | 423 | 406 | 1,635 | [1] | 1,752 | [1] | 1,125 | [1] | ||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | 315 | 334 | 336 | 1,306 | 1,411 | 901 | |||||||||
Owned, leased, and other | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 397 | 423 | 406 | 1,802 | 1,126 | ||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | 315 | 334 | 336 | 1,427 | 900 | ||||||||||
Owned, leased, and other | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 0 | 0 | 0 | ||||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | 0 | 0 | 0 | ||||||||||||
Reimbursements | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 3,735 | 4,048 | 3,776 | 15,543 | [1] | 15,455 | [1] | 11,934 | [1] | ||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | 3,855 | 3,964 | 3,808 | $ 15,778 | [1] | 15,228 | [1] | 11,834 | [1] | ||||||
Reimbursements | As Previously Reported | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 3,733 | 3,985 | 3,773 | 17,765 | 13,546 | ||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | 3,879 | 3,979 | 3,835 | $ 17,765 | $ 13,546 | ||||||||||
Reimbursements | Loyalty Program Error | Effect of Prior Period Adjustment | |||||||||||||||
REVENUES | |||||||||||||||
Total revenue | 2 | 63 | 3 | ||||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of revenues | $ (24) | $ (15) | $ (27) | ||||||||||||
[1] | See Footnote 18. Related Party Transactions for disclosure of related party amounts. |
Uncategorized Items - mar-20181
Label | Element | Value |
Accounting Standards Update 2016-01 [Member] | Treasury Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |
Accounting Standards Update 2016-01 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2016-01 [Member] | Common Class A [Member] | Common Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2014-09 [Member] | Treasury Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2014-09 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2014-09 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2014-09 [Member] | Common Class A [Member] | Common Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2016-16 [Member] | Treasury Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2016-16 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2016-16 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2016-16 [Member] | Common Class A [Member] | Common Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |