Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 26, 2010	Apr. 09, 2010
Document Type	10-Q
Amendment Flag	true
Amendment Description	Marriott International, Inc. is filing this Amendment No. 1 (the "Form 10-Q/A") to our Quarterly Report on Form 10-Q for the quarter ended March 26, 2010 (the "Form 10-Q"), filed with the Securities and Exchange Commission ("SEC") on April 23, 2010, for the sole purpose of correcting the Interactive Data File furnished as Exhibit 101. The previously furnished Interactive Data File showed that in our Document and Entity Information, the share count as of April 9, 2010 was 361,332,043 shares of Class A Common Stock and that this share data was "in millions." However, this data was in actual shares and we have deleted the "in millions" from our Document and Entity Information in our Exhibit 101 to this Form 10-Q/A. No other changes have been made to the Form 10-Q. This Form 10-Q/A continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the Form 10-Q.
Document Period End Date	Mar. 26, 2010
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	Q1
Entity Registrant Name	MARRIOTT INTERNATIONAL INC /MD/
Entity Central Index Key	0001048286
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		361,332,043

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 26, 2010	Mar. 27, 2009
REVENUES
Base management fees	$ 125	$ 125
Franchise fees	91	88
Incentive management fees	40	43
Owned, leased, corporate housing, and other revenue	229	220
Timeshare sales and services (including net note sale losses of $1 for twelve weeks ended March 27, 2009)	285	209
Cost reimbursements	1,860	1,810
Revenues, Total	2,630	2,495
OPERATING COSTS AND EXPENSES
Owned, leased, and corporate housing-direct	217	207
Timeshare-direct	235	220
Reimbursed costs	1,860	1,810
Restructuring costs	0	2
General, administrative, and other	138	216
Costs and Expenses, Total	2,450	2,455
OPERATING INCOME	180	40
Gains and other income (including gain on debt extinguishment of $21 for the twelve weeks ended March 27, 2009)	1	25
Interest expense	(45)	(29)
Interest income	4	6
Equity in losses	(11)	(34)
INCOME BEFORE INCOME TAXES	129	8
Provision for income taxes	(46)	(33)
NET INCOME (LOSS)	83	(25)
Add: Net losses attributable to noncontrolling interests, net of tax	0	2
NET INCOME (LOSS) ATTRIBUTABLE TO MARRIOTT	$ 83	$ (23)
EARNINGS PER SHARE-Basic
Earnings (losses) per share attributable to Marriott shareholders-Basic	$ 0.23	$ (0.06)
EARNINGS PER SHARE-Diluted
Earnings (losses) per share attributable to Marriott shareholders-Diluted	$ 0.22	$ (0.06)
CASH DIVIDENDS DECLARED PER SHARE	$ 0.04	$ 0.0866

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2009
CONDENSED CONSOLIDATED STATEMENT OF INCOME (Parenthetical)
Timeshare sales and services, note sale losses	$ 1
Gain on debt extinguishment	$ 21

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Mar. 26, 2010	Jan. 01, 2010
Current assets
Cash and equivalents (including from VIEs of $3 and $6, respectively)	$ 118	$ 115
Accounts and notes receivable (including from VIEs of $114 and $3, respectively)	946	838
Inventory (including from VIEs of $45 and $96, respectively)	1,503	1,444
Current deferred taxes, net	254	255
Prepaid expenses	110	68
Other (including from VIEs of $31 and $0, respectively)	84	131
Assets, Current, Total	3,015	2,851
Property and equipment (including from VIEs of $19 and $0, respectively)	1,339	1,362
Intangible Assets
Goodwill	875	875
Contract acquisition costs and other	743	731
Goodwill And Intangible Assets, Net, Total	1,618	1,606
Equity and cost method investments	243	249
Notes receivable (including from VIEs of $897 and $0, respectively)	1,268	452
Deferred taxes, net	1,091	1,020
Other (including from VIEs of $17 and $0, respectively)	219	393
Assets, Total	8,793	7,933
Current liabilities
Current portion of long-term debt (including from VIEs of $120 and $2, respectively)	145	64
Accounts payable	499	562
Accrued payroll and benefits	543	519
Liability for guest loyalty program	457	454
Other (including from VIEs of $5 and $7, respectively)	669	688
Liabilities, Current, Total	2,313	2,287
Long-term debt (including from VIEs of $926 and $3, respectively)	3,124	2,234
Liability for guest loyalty program	1,216	1,193
Other long-term liabilities	1,070	1,077
Marriott shareholders' equity
Class A Common Stock	5	5
Additional paid-in-capital	3,524	3,585
Retained earnings	3,038	3,103
Treasury stock, at cost	(5,497)	(5,564)
Accumulated other comprehensive income	0	13
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Total	1,070	1,142
Liabilities and Stockholders' Equity, Total	$ 8,793	$ 7,933

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, unless otherwise specified	Mar. 26, 2010	Jan. 01, 2010
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)
Cash and equivalents - from VIEs	$ 3	$ 6
Accounts and notes receivable - from VIEs	114	3
Inventory - from VIEs	45	96
Other assets - from VIEs	31	0
Property and equipment - from VIEs	19	0
Notes receivable - from VIEs	897	0
Other noncurrent assets - from VIEs	17	0
Current portion of long-term debt - from VIEs	120	2
Other current liabilities - from VIEs	5	7
Long-term debt - from VIEs	$ 926	$ 3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 26, 2010	Mar. 27, 2009
OPERATING ACTIVITIES
Net income (loss)	$ 83	$ (25)
Adjustments to reconcile to cash provided by (used in) operating activities:
Depreciation and amortization	39	39
Income taxes	22	20
Timeshare activity, net	68	152
Liability for guest loyalty program	24	59
Restructuring costs, net	(4)	(9)
Asset impairments and write-offs	2	50
Working capital changes and other	(74)	(83)
Net cash provided by operating activities	160	203
INVESTING ACTIVITIES
Capital expenditures	(25)	(50)
Dispositions	0	1
Loan advances	(2)	(4)
Loan collections and sales	2	4
Equity and cost method investments	(3)	(4)
Contract acquisition costs	(16)	(5)
Other	20	17
Net cash used in investing activities	(24)	(41)
FINANCING ACTIVITIES
Commercial paper/credit facility, net	(29)	31
Repayment of long-term debt	(121)	(130)
Issuance of Class A Common Stock	17	2
Dividends paid	0	(31)
Net cash used in financing activities	(133)	(128)
INCREASE IN CASH AND EQUIVALENTS	3	34
CASH AND EQUIVALENTS, beginning of period	115	134
CASH AND EQUIVALENTS, end of period	$ 118	$ 168

Basis of Presentation

3 Months Ended

Mar. 26, 2010

Basis of Presentation

1.	Basis of Presentation

The condensed consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc. (“Marriott,” and together with its subsidiaries “we,” “us,” or the “Company”). In accordance with the guidance for noncontrolling interests in consolidated financial statements, references in this report to our earnings per share, net income and shareholders’ equity attributable to Marriott do not include noncontrolling interests (previously known as minority interests), which we report separately.

The accompanying condensed consolidated financial statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe our disclosures are adequate to make the information presented not misleading. You should, however, read the condensed consolidated financial statements in conjunction with the consolidated financial statements and notes to those financial statements in our Annual Report on Form 10-K for the fiscal year ended January 1, 2010, (“2009 Form 10-K”). Certain terms not otherwise defined in this quarterly report have the meanings specified in our 2009 Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. Accordingly, ultimate results could differ from those estimates.

Our 2010 first quarter ended on March 26, 2010; our 2009 fourth quarter ended on January 1, 2010; and our 2009 first quarter ended on March 27, 2009. In our opinion, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of March 26, 2010, and January 1, 2010, and the results of our operations and cash flows for the twelve weeks ended March 26, 2010, and March 27, 2009. Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations. We have eliminated all material intercompany transactions and balances between entities consolidated in these financial statements. We have reclassified certain prior year amounts to conform to our 2010 presentation.

On January 2, 2010, the first day of the 2010 fiscal year, we adopted Financial Accounting Standards No. 166, “Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140” (“FAS No. 166”) or Accounting Standards Update No. 2009-16, “Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets” (“ASU No. 2009-16”) and Financial Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R)” (“FAS No. 167”) or Accounting Standards Update No. 2009-17, “Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU No. 2009-17”).

We used certain special purpose entities to securitize Timeshare segment notes receivables prior to the adoption of these topics, which we treated as off-balance sheet entities, and we retained the servicing rights and varying subordinated interests in the securitized notes. Pursuant to generally accepted accounting principles that existed prior to fiscal 2010, we did not consolidate these special purpose entities in our financial statements because the securitization transactions qualified as sales of financial assets.

As a result of the adoption of both topics in the 2010 first quarter, we consolidated 13 existing qualifying special purpose entities associated with past securitization transactions. We recorded a one-time non-cash after-tax reduction to shareholders’ equity of $146 million ($238 million pretax) in the 2010 first quarter, representing the cumulative effect of a change in accounting principle. The one-time non-cash after-tax reduction to shareholders’ equity was approximately $41 million greater than the estimated charge disclosed in our 2009 Form 10-K primarily due to increased notes receivable reserves recorded for the newly consolidated notes receivable. The increase in reserves was due to a change in estimate of uncollectible accounts based on historical experience. We now reserve for 100 percent of notes that are in default in addition to the reserve we record on the remaining notes.

We recorded the cumulative effect of the adoption of these topics to our financial statements in the 2010 first quarter. This consisted primarily of the reestablishment of notes receivable (net of reserves) that had been transferred to special purpose entities as a result of the securitization transactions, the elimination of residual interests that we initially recorded in connection with those transactions (and subsequently revalued on a periodic basis), the impact of recording debt obligations associated with third-party interests held in the special purpose entities, and related adjustments to inventory balances accounted for using the relative sales value method. We adjusted the inventory balance to include future revenue from the expected resale of inventory that we expect to acquire when we foreclose on defaulted notes.

Our adoption of these topics resulted in the following impacts in our Condensed Consolidated Balance Sheet at January 2, 2010: (1) assets increased by $970 million, primarily representing the consolidation of notes receivable (and corresponding reserves) partially offset by the elimination of the Company’s retained interests; (2) liabilities increased by $1,116 million, primarily representing the consolidation of debt obligations associated with third party interests; and (3) shareholders’ equity decreased by approximately $146 million. Our adoption of these topics also impacted our income statement and resulted in higher interest income (reflected in Timeshare sales and services revenue) from notes sold, which we classify within Timeshare sales and services in our Condensed Consolidated Statements of Income, and increased interest expense from consolidation of debt obligations, partially offset by the absence of accretion income on residual interests that were eliminated. We do not expect to recognize gains or losses from future securitizations of our timeshare notes following the adoption of these topics.

Please also see the parenthetical disclosures on our Condensed Consolidated Balance Sheets regarding amounts of variable interest entities’ (including Timeshare segment securitization variable interest entities) assets and liabilities that we consolidated.

Restricted Cash

We recorded restricted cash, totaling $115 million and $76 million at the end of the 2010 first quarter and year-end 2009, respectively, in the accompanying Condensed Consolidated Balance Sheets as $79 million and $54 million, respectively, in the “Other current assets” line and $36 million and $22 million, respectively, in the “Other long-term assets” line. Restricted cash primarily consists of cash held in a reserve account related to Timeshare segment notes receivable securitizations, cash held internationally that has not been repatriated due to accounting, statutory, tax and foreign currency risks, and deposits received, primarily associated with timeshare interval, fractional ownership, and residential sales that are held in escrow until the contract is closed.

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 No. 5, “Fair Value of Financial Instruments,” for further information. We also apply the provisions of fair value measurement to various non-recurring measurements for our financial and non-financial assets and liabilities. Fair value is defined 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

The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the change in fair value of the derivative instrument is reflected in our Condensed Consolidated Financial Statements. A derivative qualifies for hedge accounting if, at inception, the derivative is expected to be highly effective in offsetting the underlying hedged cash flows or fair value and the hedge documentation standards are fulfilled 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 foreign operations hedge based on the exposure we are hedging. The asset or liability value of the derivative will change in tandem with its fair value. We record changes in fair value, for the effective portion of qualifying hedges, in other comprehensive income (“OCI”). We release the derivative’s gain or loss from OCI to match the timing of the underlying hedged cash flows’ effect on earnings.

We review the effectiveness of our hedging instruments on a quarterly basis, 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 timeframe. Such untimely transactions require us to immediately recognize in earnings gains and losses previously recorded in OCI.

Changes in interest rates, foreign 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 foreign 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. See Footnote No. 5, “Fair Value of Financial Instruments” for additional information.

- Definition

Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

New Accounting Standards

3 Months Ended

Mar. 26, 2010

New Accounting Standards

2.	New Accounting Standards

FAS No. 166 or ASU No. 2009-16 and FAS No. 167 or ASU No. 2009-17

We adopted FAS No. 166 or ASU No. 2009-16 on the first day of our 2010 fiscal year, which amended FAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” by: eliminating the concept of a qualifying special-purpose entity (“QSPE”); clarifying and amending the derecognition criteria for a transfer to be accounted for as a sale; amending and clarifying the unit of account eligible for sale accounting; and requiring that a transferor initially measure at fair value and recognize all assets obtained (for example beneficial interests) and liabilities incurred as a result of a transfer of an entire financial asset or group of financial assets accounted for as a sale. In addition, as a reporting entity, this topic requires us to evaluate existing QSPEs (as defined under previous accounting guidance) for consolidation in accordance with the applicable consolidation guidance. The topic requires us to supplement our disclosures about, among other things, our continuing involvement with transfers of financial assets previously accounted for as sales, our inherent risks in our retained financial assets, and the nature and financial effect of restrictions on our assets that continue to be reported in our statement of financial position.

We adopted FAS No. 167 or ASU No. 2009-17 on the first day of our 2010 fiscal year, which changes the consolidation guidance applicable to variable interest entities (“VIEs”). It also amends the guidance governing the determination of whether an enterprise is the primary beneficiary of a VIE, and is, therefore, required to consolidate an entity, by requiring a qualitative analysis rather than a quantitative analysis. The qualitative analysis includes, among other things, consideration of who has the power to direct the activities of the entity that most significantly impact the entity’s economic performance and who has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This topic also requires continuous reassessments of whether an enterprise is the primary beneficiary of a VIE. Previously, the applicable standard required reconsideration of whether an enterprise was the primary beneficiary of a VIE only when specific events had occurred. QSPEs, which were previously exempt from the application of this topic, are now subject to the provisions of this topic. The topic also requires additional disclosures about an enterprise’s involvement with a VIE.

See Footnote No. 1, “Basis of Presentation” for the impact of the adoption of these topics.

Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”)

We adopted certain provisions of ASU No. 2010-06 in the 2010 first quarter. These provisions of ASU No. 2010-06 amended Subtopic 820-10, “Fair Value Measurements and Disclosures – Overall,” by requiring additional disclosures for transfers in and out of Level 1 and Level 2 fair value measurements, as well as requiring fair value measurement disclosures for each “class” of assets and liabilities, a subset of the captions disclosed in our Condensed Consolidated Balance Sheets. The adoption did not have a material impact on our financial statements or our disclosures, as we did not have any transfers between Level 1 and Level 2 fair value measurements and did not have material classes of assets and liabilities that required additional disclosure. See “Future Adoption of Accounting Standards” for the provisions of this topic applicable to future periods.

Accounting Standards Update No. 2010-09 “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”)

We adopted ASU No. 2010-09 in the 2010 first quarter. ASU No. 2010-09 amended Subtopic 855-10, “Subsequent Events – Overall” by removing the requirement for a United States Securities and Exchange Commission (“SEC”) registrant to disclose a date, in both issued and revised financial statements, through which that filer had evaluated subsequent events. Accordingly, we removed the related disclosure from Footnote No. 1, “Basis of Presentation.” The adoption did not have a material impact on our financial statements.

Future Adoption of Accounting Standards

ASU No. 2010-06 – Provisions Effective in the 2011 First Quarter

Certain provisions of ASU No. 2010-06 are effective for fiscal years beginning after December 15, 2010, which for us will be our 2011 first quarter. These provisions of ASU No. 2010-06, which amended Subtopic 820-10, will require us to present as separate line items all purchases, sales, issuances, and settlements of financial instruments valued using significant unobservable inputs (Level 3) in the reconciliation for fair value measurements, whereas currently these are presented in aggregate as one line item. Although this may change the appearance of our reconciliation, we do not believe the adoption will have a material impact on our financial statements or disclosures.

Income Taxes

3 Months Ended

Mar. 26, 2010

Income Taxes

3.	Income Taxes

Our federal income tax returns have been examined and we have settled all issues for tax years through 2004. We filed a refund claim relating to 2000 and 2001. The Internal Revenue Service (“IRS”) disallowed the claims, and in July 2009, we protested the disallowance. This issue is pending in the IRS Appeals Division. The 2005, 2006, and 2007 field examinations have been completed, and the unresolved issues from those years are now with the IRS Appeals Division. The Revenue Agent’s Report for 2008 has been received and that year is in the process of being sent to Appeals. The 2009 and 2010 IRS examinations are ongoing as part of the IRS’s Compliance Assurance Program. Various state, local, and foreign income tax returns are also under examination by taxing authorities.

As noted in Footnote No. 1, “Basis of Presentation,” we recorded a one-time non-cash pre-tax reduction to shareholders’ equity of approximately $238 million in conjunction with the adoption of ASU Nos. 2009-16 and 2009-17 in the 2010 first quarter. That amount included a $92 million reduction in net deferred taxes.

For the first quarter of 2010, we decreased unrecognized tax benefits by $27 million (from $249 million at year-end 2009), primarily representing the settlement of an unfavorable U.S. Court of Federal Claims decision involving a refund claim associated with a 1994 transaction. The unrecognized tax benefits balance of $222 million at the end of the 2010 first quarter included $110 million of tax positions that, if recognized, would impact the effective tax rate.

As a large taxpayer, we are under continual audit by the IRS and other taxing authorities. We anticipate concluding U.S. federal appeals negotiations for the 2005, 2006, 2007, and 2008 tax years in the next 12 months where the items under consideration include the taxation of our loyalty and gift card programs and the treatment of funds received from foreign subsidiaries. The conclusion of the negotiations could have a material impact on our unrecognized tax benefit balances.

Share-Based Compensation

3 Months Ended

Mar. 26, 2010

Share-Based Compensation

4.	Share-Based Compensation

Under our 2002 Comprehensive Stock and Cash Incentive Plan (the “Comprehensive Plan”), we award: (1) stock options to purchase our Class A Common Stock (“Stock Option Program”); (2) stock appreciation rights (“SARs”) for our Class A Common Stock (“Stock Appreciation Right Program”); (3) restricted stock units (“RSUs”) of our Class A Common Stock; and (4) deferred stock units. We grant awards at exercise prices or strike prices that are equal to the market price of our Class A Common Stock on the date of grant.

RSUs

We granted 3.7 million RSUs during the first quarter of 2010 to certain officers and key employees, and those units vest generally over four years in equal annual installments commencing one year after the date of grant. The weighted average grant-date fair value of the RSUs granted in the first quarter of 2010 was $27.

SARs

We granted 1.1 million SARs to officers and key employees during the 2010 first quarter. These SARs expire 10 years after the date of grant and both vest and are exercisable in cumulative installments of one quarter at the end of each of the first four years following the date of grant. The weighted average grant-date fair value of these SARs was $10, and the weighted average exercise price was $27.

To estimate the fair value of each SAR granted, we use a binomial method. The weighted average expected SARs terms were a product of the lattice-based binomial valuation model that uses suboptimal exercise factors to calculate the expected terms. Historical data is used to estimate exercise behaviors for separate groups of retirement eligible and non-retirement eligible employees.

The assumptions for the Employee SARs granted during the first quarter of 2010 are shown in the following table.


Expected volatility	32	%
Dividend yield	0.71	%
Risk-free rate	3.3	%
Expected term (in years)	7

The risk-free rates are based on the corresponding U.S. Treasury spot rates for the expected duration at the date of grant, converted to a continuously compounded rate.

SARs granted during the first quarter of 2010 utilized a weighted average historical volatility where periods with atypical stock movement were given a lower weight to reflect stabilized long-term mean volatility.

Other Information

At the end of the 2010 first quarter, 65.6 million shares were reserved under the Comprehensive Plan, including 36 million shares under the Stock Option Program and Stock Appreciation Right Program.

Fair Value Of Financial Instruments

3 Months Ended

Mar. 26, 2010

Fair Value of Financial Instruments

5.	Fair Value of Financial Instruments

We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. The following table shows the carrying values and the fair values of non-current financial assets and liabilities that qualify as financial instruments, determined in accordance with the guidance for disclosures about fair value of financial instruments.


	At March 26, 2010						At Year-End 2009
*($ in millions)*	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cost method investments	$	42		$	41		$	41		$	43
Loans to timeshare owners – securitized		897			975			0			0
Loans to timeshare owners – non-securitized		276			288			352			368
Senior, mezzanine, and other loans – non-securitized		95			74			100			77
Residual interests and effectively owned notes		0			0			197			197
Restricted cash		36			36			22			22
Marketable securities		18			18			18			18

Total long-term financial assets	$	1,364		$	1,432		$	730		$	725

Non-recourse debt associated with securitized notes receivable	$	(923	)	$	(923	)	$	0		$	0
Senior Notes		(1,628	)		(1,722	)		(1,627	)		(1,707	)
$2,404 Effective Credit Facility		(396	)		(396	)		(425	)		(425	)
Other long-term debt		(151	)		(143	)		(154	)		(154	)
Other long-term liabilities		(78	)		(70	)		(86	)		(75	)
Long-term derivative liabilities		(2	)		(2	)		(1	)		(1	)

Total long-term financial liabilities	$	(3,178	)	$	(3,256	)	$	(2,293	)	$	(2,362	)

We estimate the fair value of our securitized and a portion of our non-securitized long-term loans to timeshare owners using a discounted cash flow model. We believe this model is comparable to what would be used in the current market by an independent third party. Our model uses default rates, prepayment rates, coupon rates and loan terms for the legally sold note portfolio as key drivers of risk and relative value, that when applied in combination with pricing parameters, determines the fair value of the underlying notes receivable. For those non-securitized loans to timeshare owners that we do not value using our pricing model, we believe their carrying value approximates fair value as the loans’ stated interest rates are consistent with current market rates and the reserve for these loans accounts for risks in default rates, prepayment rates, and loan terms. We estimate the fair value of our senior, mezzanine, and other loans by discounting cash flows using risk-adjusted rates.

We estimate the fair value of our cost method investments by applying a cap rate to stabilized earnings (a market approach). The carrying value of our restricted cash approximates its fair value.

We estimate the fair value of our non-recourse debt associated with securitized loans to timeshare owners by obtaining indicative bids from investment banks that actively issue and facilitate the secondary market for timeshare securities. As an additional measure, we internally generate cash flow estimates by modeling all bond tranches for active securitization transactions, with consideration for the collateral specific to each tranche. The key drivers in this analysis include default rates, prepayment rates, bond interest rates and other structural factors, which are used to estimate the projected cash flows. We reviewed market spreads from timeshare note securitizations and other asset-backed transactions during the fourth quarter of 2009 and the first quarter of 2010, in order to estimate market credit spreads by rating. We applied market spreads to swap rates in order to estimate an underlying discount rate for calculating the fair value of the active bonds. After comparing the results of our internal analysis to the bids we received from the investment banks, we concluded that the fair value of the bonds approximates book value.

We estimate the fair value of our other long-term debt, excluding leases, using expected future payments discounted at risk-adjusted rates, and we determine the fair value of our senior notes using quoted market prices. We believe the carrying value of our credit facility approximates its fair value due to the short maturity dates of the draws we have executed to date. Other long-term liabilities represent guarantee costs and reserves and deposit liabilities. The carrying values of our guarantee costs and reserves approximate their fair values. We estimate the fair value of our deposit liabilities primarily by discounting future payments at a risk-adjusted rate.

We are required to carry our marketable securities at fair value. The carrying value of our marketable securities at the end of our 2010 first quarter of $18 million included debt securities of the U.S. Government, its sponsored agencies and other U.S. corporations invested for our self-insurance programs. These securities are valued using directly observable Level 1 inputs as described in Footnote No. 1, “Basis of Presentation.”

We are also required to carry our derivative assets and liabilities at fair value. As of the end of our 2010 first quarter, we had derivative instruments in a current asset position of $1 million, which we valued using Level 1 inputs, $2 million in a current liability position valued using Level 2 inputs, and $2 million in a long-term liability position valued using Level 3 inputs. We value our Level 3 input derivatives using valuations that are calibrated to the initial trade prices. Subsequent valuations are based on unobservable inputs to the valuation model including interest rates and volatilities.

As discussed in more detail in Footnote No. 1, “Basis for Presentation” and Footnote No. 15, “Variable Interest Entities,” we periodically sell notes receivable originated by our Timeshare segment. We continue to service the notes after the sale, and we retain servicing assets and other interests in the notes. Historically, we accounted for these residual interests, including the servicing assets, as trading securities according to the then-applicable standards for accounting for certain investments in debt and equity securities. At the dates of sale and at the end of each reporting period, we estimated the fair value of our residual interests using a discounted cash flow model using Level 3 inputs. However, during the first quarter of 2010, we adopted new accounting topics for accounting for transfers and servicing of financial assets and extinguishments of liabilities as discussed in Footnote No. 1, “Basis of Presentation.” As a result, we reestablished notes receivable (net of reserves) associated with past securitization transactions, we recorded the debt obligations associated with third-party interests held in these special purpose entities and we correspondingly, eliminated our residual interests (including servicing assets) associated with these transactions. We have included the carrying amounts and the estimated fair values for the long-term portion of the securitized notes receivable and the debt obligations in the preceding table.

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Earnings Per Share

3 Months Ended

Mar. 26, 2010

Earnings per Share

6.	Earnings Per Share

The table below illustrates the reconciliation of the earnings (losses) and number of shares used in our calculations of basic and diluted earnings per share attributable to Marriott shareholders.


	Twelve Weeks Ended
*(in millions, except per share amounts)*	March 26, 2010		March 27, 2009
Computation of Basic Earnings Per Share Attributable to Marriott Shareholders
Income (loss) attributable to Marriott shareholders	$	83	$	(23	)
Weighted average shares outstanding		359.4		354.4

Basic earnings (losses) per share attributable to Marriott shareholders	$	0.23	$	(0.06	)

Computation of Diluted Earnings Per Share Attributable to Marriott Shareholders
Income (loss) attributable to Marriott shareholders	$	83	$	(23	)

Weighted average shares outstanding		359.4		354.4
Effect of dilutive securities
Employee stock option and SARs plans		9.9		0
Deferred stock incentive plans		1.2		0
Restricted stock units		2.8		0

Shares for diluted earnings per share attributable to Marriott shareholders		373.3		354.4

Diluted earnings (losses) per share attributable to Marriott shareholders	$	0.22	$	(0.06	)

We compute the effect of dilutive securities using the treasury stock method and average market prices during the period. We determine dilution based on earnings attributable to Marriott shareholders. As there was a loss for the 2009 first quarter, the “Effect of dilutive securities” caption in the preceding table does not include 3.9 million employee stock option and SARs plan shares, 1.7 million deferred stock incentive plans shares, or 0.5 million restricted stock units shares because including those shares would have been antidilutive.

Additionally, in accordance with the guidance for calculating earnings per share, we have not included the following stock options and SARs in our calculation of diluted earnings per share attributable to Marriott shareholders because the exercise prices were greater than the average market prices for the applicable periods:

(a)

for the twelve-week period ended March 26, 2010, 3.8 million options and SARs, with exercise prices ranging from $31.05 to $49.03; and

(b)

for the twelve-week period ended March 27, 2009, 19.5 million options and SARs, with exercise prices ranging from $16.22 to $49.03.

Inventory

3 Months Ended

Mar. 26, 2010

Inventory

7.	Inventory

Inventory, totaling $1,503 million and $1,444 million as of March 26, 2010, and January 1, 2010, respectively, consists primarily of Timeshare segment interval, fractional ownership, and residential products totaling $1,485 million and $1,426 million as of March 26, 2010, and January 1, 2010, respectively. Inventory totaling $18 million as of both March 26, 2010, and January 1, 2010, primarily relates to hotel operating supplies for the limited number of properties we own or lease. We primarily value Timeshare segment interval, fractional ownership, and residential products at the lower of cost or fair market value, as defined in the accounting guidance for the impairment or disposal of long-lived assets, and generally value operating supplies at the lower of cost (using the first-in, first-out method) or market. Consistent with recognized industry practice, we classify Timeshare segment interval, fractional ownership, and residential products inventory, which has an operating cycle that exceeds 12 months, as a current asset.

The following table details the composition of our Timeshare segment inventory balances at March 26, 2010, and January 1, 2010.


*($ in millions)*	March 26, 2010		January 1, 2010
Finished goods	$	797	$	721
Work-in-process		168		198
Land and infrastructure		520		507

	$	1,485	$	1,426

Property And Equipment

3 Months Ended

Mar. 26, 2010

Property and Equipment

8.	Property and Equipment

The following table details the composition of our property and equipment balances at March 26, 2010, and January 1, 2010.


*($ in millions)*	March 26, 2010			January 1, 2010
Land	$	453		$	454
Buildings and leasehold improvements		926			935
Furniture and equipment		985			996
Construction in progress		173			163

		2,537			2,548
Accumulated depreciation		(1,198	)		(1,186	)

	$	1,339		$	1,362

Notes Receivable

3 Months Ended

Mar. 26, 2010

Notes Receivable

9.	Notes Receivable

As discussed in Footnote No. 1, “Basis of Presentation,” on the first day of fiscal year 2010, we consolidated certain entities associated with past timeshare notes receivable securitization transactions. Prior to the 2010 first quarter, we were not required to consolidate the special purpose entities utilized to securitize the notes.

The following table details the composition of our notes receivable balances (net of reserves) at March 26, 2010, and January 1, 2010.


*($ in millions)*	March 26, 2010			January 1, 2010
Loans to timeshare owners – securitized	$	1,009		$	0
Loans to timeshare owners – non-securitized		334			424
Senior, mezzanine, and other loans – non-securitized		188			196

		1,531			620
Less current portion
Loans to timeshare owners – securitized		(112	)		0
Loans to timeshare owners – non-securitized		(58	)		(72	)
Senior, mezzanine, and other loans – non-securitized		(93	)		(96	)

	$	1,268		$	452

We classify notes receivable due within one year as current assets in the caption “Accounts and notes receivable” in the accompanying Condensed Consolidated Balance Sheets. Total long-term notes receivable as of March 26, 2010, and January 1, 2010, of $1,268 million and $452 million, respectively, consisted of loans to timeshare owners of $1,173 million and $352 million, respectively, loans to equity method investees of $6 million and $10 million, respectively, and other notes receivable of $89 million and $90 million, respectively.

The following tables provide securitized and non-securitized notes receivable detail regarding: 1) future notes receivable principal payments due (net of reserves and unamortized discounts), weighted average interest rates and ranges of stated interest rates; 2) notes receivable reserves; and 3) unamortized discounts.

Notes Receivable Principal Payments (net of reserves and unamortized discounts) and Interest Rates


*($ in millions)*	Non-Securitized Notes Receivable			Securitized Notes Receivable			Total
2010	$	143		$	93		$	236
2011		49			114			163
2012		55			118			173
2013		34			122			156
2014		32			123			155
Thereafter		209			439			648

Balance at March 26, 2010	$	522		$	1,009		$	1,531

Weighted average interest rate at March 26, 2010		10.0	%		13.0	%		12.0	%

Range of stated interest rates at March 26, 2010		0 to 19.5	%		5.2 to 19.5	%		0 to 19.5	%

Notes Receivable Reserves


*($ in millions)*	Non-Securitized Notes Receivable		Securitized Notes Receivable		Total
Balance at year-end 2009	$	210	$	0	$	210

Balance at March 26, 2010	$	210	$	126	$	336

Notes Receivable Unamortized Discounts


*($ in millions)*	Non-Securitized Notes Receivable		Securitized Notes Receivable		Total
Balance at year-end 2009	$	16	$	0	$	16

Balance at March 26, 2010	$	13	$	0	$	13

Senior, Mezzanine, and Other Loans

We reflect interest income associated with “Senior, mezzanine, and other loans” in the “Interest income” caption in the accompanying Consolidated Statements of Income. For financial statement purposes, we generally do not accrue interest on “Senior, mezzanine, and other loans” that are impaired. At the end of the 2010 first quarter, our recorded investment in impaired “Senior, mezzanine, and other loans” was $87 million. We had a $79 million notes receivable reserve representing an allowance for credit losses, leaving $8 million of our investment in impaired loans, for which we had no related allowance for credit losses. At year-end 2009, our recorded investment in impaired “Senior, mezzanine, and other loans” was $191 million. We had a $183 million notes receivable reserve representing an allowance for credit losses, leaving $8 million of our investment in impaired loans, for which we had no related allowance for credit losses.

The following table summarizes the activity related to our “Senior, mezzanine, and other loans” notes receivable reserve for the 2010 first quarter:


*($ in millions)*	Notes Receivable Reserve
Year-end 2009 balance	$	183
Additions		1
Write-offs		(105	)

Balance at March 26, 2010	$	79

Loans to Timeshare Owners

We reflect interest income associated with “Loans to timeshare owners” of $45 million and $13 million for the 2010 and 2009 first quarters, respectively, in the accompanying Consolidated Statements of Income in the “Timeshare sales and services” revenue caption. For the $45 million of interest income recognized in the 2010 first quarter, $36 million was associated with securitized loans and $9 million was associated with non-securitized loans, whereas the $13 million recognized in the 2009 first quarter was associated only with non-securitized loans.

The following table summarizes the activity related to our “Loans to timeshare owners” notes receivable reserve for the 2010 first quarter:


*($ in millions)*	Non-Securitized Notes Receivable Reserve			Securitized Notes Receivable Reserve			Total
Year-end 2009 balance	$	27		$	0		$	27
Additions for current year sales		7			0			7
Write-offs		(15	)		0			(15	)
One-time impact of ASU Nos. 2009-16 and 2009-17 ⁽¹⁾		84			135			219
Other		28			(9	)		19

Balance at March 26, 2010	$	131		$	126		$	257

⁽¹⁾ The non-securitized notes receivable reserve relates to the implementation of ASU Nos. 2009-16 and 2009-17, which required us to establish reserves for certain previously securitized and subsequently repurchased notes held at January 2, 2010.

We record an estimate of expected uncollectibility on notes receivable that we receive from timeshare purchasers as a reduction of revenue at the time we recognize profit on a timeshare sale. We have fully reserved all defaulted notes in addition to recording a reserve on the estimated uncollectible portion of the remaining notes. For those notes not in default, we assess collectibility based on pools of receivables, because we hold large numbers of homogenous timeshare notes receivable. We estimate uncollectibles based on historical activity for similar timeshare notes receivable. In addition to a static pool analysis, which tracks uncollectibles for each year’s sales over the life of those notes, we utilized internal cash flow models to estimate future defaults. As of March 26, 2010, we estimated average remaining default rates of 9.1 percent and 7.1 percent for outstanding non-securitized and securitized timeshare notes receivable, respectively.

We do not record accrued interest on “Loans to timeshare owners” that are over 90 days past due.

The following table provides securitized and non-securitized timeshare notes receivable detail regarding our recorded investment in loans on nonaccrual status.


*($ in millions)*	Non-Securitized Notes Receivable		Securitized Notes Receivable		Total
Investment in loans on nonaccrual status at March 26, 2010	$	111	$	25	$	136

Investment in loans on nonaccrual status at January 1, 2010	$	113	$	0	$	113

Long-term Debt

3 Months Ended

Mar. 26, 2010

Long-term Debt

10.

Long-term Debt

As discussed in Footnote No. 1, “Basis of Presentation,” on the first day of fiscal year 2010, we consolidated certain entities associated with past timeshare notes receivable securitization transactions, resulting in consolidation of the related debt obligations. Prior to the 2010 first quarter, we were not required to consolidate these entities. We securitized the notes receivable through bankruptcy-remote entities, and the entities’ creditors have no recourse to us.

Our long-term debt at March 26, 2010, and January 1, 2010, consisted of the following:


*($ in millions)*	March 26, 2010			January 1, 2010
Non-recourse debt associated with securitized notes receivable, interest rates ranging from 0.22% to 7.20% (weighted average interest rate of 5.20%)	$	1,043		$	0
Less current portion		(120	)		0

		923			0

Senior Notes:
Series F, interest rate of 4.625%, face amount of $348, maturing June 15, 2012 (effective interest rate of 5.02%)		347			347
Series G, interest rate of 5.810%, face amount of $316, maturing November 10, 2015 (effective interest rate of 6.53%)		303			302
Series H, interest rate of 6.200%, face amount of $289, maturing June 15, 2016 (effective interest rate of 6.30%)		289			289
Series I, interest rate of 6.375%, face amount of $293, maturing June 15, 2017 (effective interest rate of 6.45%)		291			291
Series J, interest rate of 5.625%, face amount of $400, maturing February 15, 2013 (effective interest rate of 5.71%)		398			398
$2,404 Effective Credit Facility, average interest rate of 0.7794% at March 26, 2010		396			425
Other		202			246

		2,226			2,298
Less current portion		(25	)		(64	)

		2,201			2,234

	$	3,124		$	2,234

At March 26, 2010, except for non-recourse debt associated with securitized notes receivable that was secured by the related notes receivable, all other debt was recourse to us and unsecured. At March 26, 2010, we had long-term public debt ratings associated with our Senior Notes of BBB- from Standard and Poor’s and Baa3 from Moody’s Investor Service.

We are party to a multicurrency revolving credit agreement (the “Credit Facility”) that provides for $2.404 billion of aggregate effective borrowings to support general corporate needs, including working capital and capital expenditures, and letters of credit that have supported our commercial paper program. The Credit Facility expires on May 14, 2012. Borrowings under the Credit Facility bear interest at the London Interbank Offered Rate (LIBOR) plus a fixed spread. We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating.

Each of our securitized notes receivable pools contains various triggers relating to the performance of the underlying notes receivable. If a pool of securitized notes receivable fails to perform within the pool’s established parameters (default or delinquency thresholds by deal) there are provisions pursuant to which the excess spread we typically receive each month from that pool (related to the interests we retained) is effectively redirected to accelerate the principal payments to investors based on the subordination of the different tranches until the performance trigger is cured. During the first quarter of 2010, one pool that reached a performance trigger at year-end 2009 returned to compliance while three others reached performance triggers. As a result, an additional $2 million in cash of excess spread was used to pay down debt during the first quarter of 2010. As of March 26, 2010, only one of our 13 securitized notes receivable pools was out of compliance with applicable triggers.

The following tables provide securitized and non-securitized debt detail regarding: 1) future debt principal payments due (net of unamortized discounts), and 2) unamortized debt discounts.

Debt Principal Payments (net of unamortized discounts)


*($ in millions)*	Non-Recourse Debt		Other Debt		Total
2010	$	106	$	21	$	127
2011		128		13		141
2012		132		754		886
2013		136		410		546
2014		137		12		149
Thereafter		404		1,016		1,420

Balance at March 26, 2010	$	1,043	$	2,226	$	3,269

As the contractual terms of the underlying securitized notes receivable determine the maturities of the non-recourse debt associated with them, actual maturities may differ because of prepayments by the notes receivable obligors.

Unamortized Debt Discounts


*($ in millions)*	Non-Recourse Debt		Other Debt		Total
Balance at January 1, 2010	$	0	$	20	$	20

Balance at March 26, 2010	$	0	$	19	$	19

Cash paid for interest, net of amounts capitalized, was $27 million in the 2010 first quarter and $13 million in the 2009 first quarter.

Comprehensive Income And Capital Structure

3 Months Ended

Mar. 26, 2010

Comprehensive Income and Capital Structure

11.

Comprehensive Income and Capital Structure

The following tables detail comprehensive income attributable to Marriott, comprehensive income attributable to noncontrolling interests, and consolidated comprehensive income for the twelve weeks ended March 26, 2010, and March 27, 2009.


	Attributable to Marriott						Attributable to Noncontrolling Interests					Consolidated
*($ in millions)*	Twelve Weeks Ended						Twelve Weeks Ended					Twelve Weeks Ended
	March 26, 2010			March 27, 2009			March 26, 2010		March 27, 2009			March 26, 2010			March 27, 2009
Net income (loss)	$	83		$	(23	)	$	0	$	(2	)	$	83		$	(25	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(13	)		(11	)		0		0			(13	)		(11	)
Other derivative instrument adjustments		0			1			0		0			0			1
Unrealized losses on available-for-sale securities		0			(2	)		0		0			0			(2	)

Total other comprehensive (loss) income, net of tax		(13	)		(12	)		0		0			(13	)		(12	)

Comprehensive income (loss)	$	70		$	(35	)	$	0	$	(2	)	$	70		$	(37	)

The following table details changes in shareholders’ equity attributable to Marriott shareholders. Equity attributable to the noncontrolling interests was zero as of March 26, 2010 and January 1, 2010. The following table also includes the cumulative effect of a change in accounting principle of $146 million recorded directly to retained earnings on the first day of the 2010 fiscal year as a result of our adopting ASU Nos. 2009-16 and 2009-17. See Footnote No. 1, “Basis of Presentation” for additional information regarding the adoption of those updates.


*($ in millions, except per share amounts)*					Equity Attributable to Marriott Shareholders
Common Shares Outstanding		Total			Class A Common Stock		Additional Paid-in-Capital			Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income
358.2	Balance at year-end 2009	$	1,142		$	5	$	3,585		$	3,103		$	(5,564	)	$	13
0	Impact of adoption of ASU 2009-16 and ASU 2009-17		(146	)		0		0			(146	)		0			0

358.2	Opening balance fiscal year 2010	$	996		$	5	$	3,585		$	2,957		$	(5,564	)	$	13
0	Net income		83			0		0			83			0			0
0	Other comprehensive income		(13	)		0		0			0			0			(13	)
0	Dividends ($0.0400 per share)		(14	)		0		0			(14	)		0			0
2.9	Employee stock plan issuance		18			0		(61	)		12			67			0

361.1	Balance at March 26, 2010	$	1,070		$	5	$	3,524		$	3,038		$	(5,497	)	$	0

Contingencies

3 Months Ended

Mar. 26, 2010

Contingencies

12.

Contingencies

Guarantees

We issue guarantees to certain lenders and hotel owners primarily to obtain long-term management contracts. The guarantees generally have a stated maximum amount of funding and a term of three to 10 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 the end of the term. The terms of the guarantees to hotel owners generally require us to fund if the hotels do not attain specified levels of operating profit. Guarantee fundings to lenders and hotel owners are generally recoverable as loans repayable to us out of future hotel cash flows and/or proceeds from the sale of hotels. We also enter into project completion guarantees with certain lenders in conjunction with hotels and Timeshare segment properties that we or our joint venture partners are building.

The maximum potential amount of future fundings for guarantees where we are the primary obligor and the carrying amount of the liability for expected future fundings at March 26, 2010, are as follows:


*($ in millions)*
Guarantee Type	Maximum Potential Amount of Future Fundings		Liability for Expected Future Fundings at March 26, 2010
Debt service	$	37	$	3
Operating profit		132		23
Other		59		2

Total guarantees where we are the primary obligor	$	228	$	28

The liability for expected future fundings at March 26, 2010, is included in our Condensed Consolidated Balance Sheets as follows: $6 million in the “Other current liabilities” line item and $22 million in the “Other long-term liabilities” line item.

Our guarantees of $228 million listed in the preceding table include $32 million of operating profit guarantees that will not be in effect until the underlying properties open and we begin to operate the properties, $3 million of debt service guarantees that will not be in effect until the underlying debt has been funded, and $8 million of other guarantees.

The guarantees of $228 million in the preceding table do not include $162 million of guarantees related to Senior Living Services lease obligations totaling $109 million (expiring in 2013) and lifecare bonds of $53 million (estimated to expire in 2016), for which we are secondarily liable. Sunrise Senior Living, Inc. (“Sunrise”) is the primary obligor of the leases and $8 million of the lifecare bonds, and CNL Retirement Properties, Inc. (“CNL”), which subsequently merged with Health Care Property Investors, Inc., is the primary obligor of $43 million of the lifecare bonds. Five Star Senior Living is the primary obligor of the remainder of the lifecare bonds. Prior to our sale of the Senior Living Services business in 2003, these preexisting guarantees were guarantees by us of obligations of consolidated Senior Living Services subsidiaries. Sunrise and CNL have indemnified us for any guarantee fundings we may be called upon to make in connection with these lease obligations and lifecare bonds. While we currently do not expect to fund under the guarantees, according to SEC filings made by Sunrise, because of Sunrise’s financial position and reduced access to liquidity, Sunrise’s continued ability to meet these guarantee obligations cannot be assured.

The table also does not include lease obligations, for which we became secondarily liable when we acquired the Renaissance Hotel Group N.V. in 1997, consisting of annual rent payments of approximately $6 million and total remaining rent payments through the initial term of approximately $57 million. Most of these obligations expire at the end of 2020. CTF Holdings Ltd. (“CTF”) had originally made available €35 million in cash collateral in the event that we are required to fund under such guarantees (approximately €6 million ($8 million) remained at March 26, 2010). Our contingent liability exposure of approximately $57 million will decline to the extent that CTF obtains releases from the landlords or these hotels exit the system. Since the time we assumed these guarantees, we have not funded any amounts and we do not expect to fund any amounts under these guarantees in the future.

In addition to the guarantees noted in the preceding table, we provided a project completion guarantee to a lender for a project with an estimated aggregate total cost of $586 million. We are liable on a several basis with our partners in an amount equal to our pro rata ownership in the joint venture, which is 34 percent. The carrying value of our liability at March 26, 2010, related to this guarantee was $28 million as further discussed in Footnote No. 15, “Variable Interest Entities.” The preceding table also does not include a project completion guarantee that we provided to another lender for a project with an estimated aggregate total cost of CAD $466 million (USD $439 million). The joint venture will satisfy payments for cost overruns for this project through contributions from the partners or from borrowings, and we are liable on a several basis with our partners in an amount equal to our pro rata ownership in the joint venture, which is 20 percent. We do not expect to fund under the guarantee. At March 26, 2010, the carrying value of our liabilities associated with this project completion guarantee was $3 million.

In addition to the guarantees described in the preceding paragraphs, in conjunction with financing obtained for specific projects or properties owned by joint ventures, in which we are a party, we may provide industry standard indemnifications to the lender for loss, liability, or damage occurring as a result of the actions of the other joint venture owner or our own actions.

Commitments and Letters of Credit

In addition to the guarantees noted in the preceding paragraphs, as of March 26, 2010, we had the following commitments outstanding:

•

$4 million of loan commitments that we have extended to owners of lodging properties. We expect to fund approximately $2 million of these commitments within three years, and do not expect to fund the remaining $2 million of commitments, $1 million of which will expire within three years and $1 million of which will expire after five years.

•

Commitments to invest up to $48 million of equity for noncontrolling interests in partnerships that plan to purchase North American full-service and limited-service properties or purchase or develop hotel-anchored mixed-use real estate projects. We expect to fund $11 million of these commitments in one to two years and $27 million within three years and $10 million after three years. If not funded, $28 million of these investment commitments will expire within one to two years and $20 million will expire in more than three years.

•

A commitment, with no expiration date, to invest up to $11 million in a joint venture for development of a new property that we expect to fund within three years.

•

A commitment, with no expiration date, to invest up to $7 million in a joint venture that we do not expect to fund.

•

A commitment, subject to certain conditions, to invest up to $47 million (€35 million) into a new fund to purchase or develop managed Marriott brand hotels in Western Europe that will be managed exclusively by us. The commitment will terminate on June 30, 2010 if marketing of the fund has not begun by that date. Based on current fundraising conditions, we do not expect marketing to commence by June 30, 2010, at which point the commitment will expire unless extended by mutual agreement.

•

A commitment to invest up to $27 million (€20 million) in a joint venture in which we are a partner. We do not expect to fund under this commitment.

•

A commitment to subscribe for shares up to $1.0 million (€0.8 million) in a joint venture in which we are a partner. We expect to fund this commitment within a year.

•

Two commitments for an aggregate of $130 million to purchase timeshare and fractional units upon completion of construction for use in our Asia Pacific points and The Ritz-Carlton Destination Club programs. We have already made deposits of $22 million in conjunction with these commitments. With regard to the payment of the remaining $108 million, the payment of $100 million is conditioned on satisfaction of certain conditions, and we have certain claims and contingencies that may have the effect of delaying and/or reducing the amount of such payment, which could otherwise become due in the third or fourth quarter of this year.

•

$4 million (€3 million) of other purchase commitments that will be funded over the next 5 years, as follows: $1 million in each of 2011, 2012, 2013 and 2014.

At March 26, 2010, we had $109 million of letters of credit outstanding, the majority of which related to our self-insurance programs. Surety bonds issued as of March 26, 2010, totaled $329 million, the majority of which were requested by federal, state or local governments related to our lodging operations, including our Timeshare segment and self-insurance programs.

Business Segments

3 Months Ended

Mar. 26, 2010

Business Segments

13.

Business Segments

We are a diversified hospitality company with operations in five business segments:

•

North American Full-Service Lodging, which includes the Marriott Hotels & Resorts, Marriott Conference Centers, JW Marriott, Renaissance Hotels, Renaissance ClubSport, and Autograph Collection properties located in the continental United States and Canada;

•

North American Limited-Service Lodging, which includes the Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites, and Marriott ExecuStay properties located in the continental United States and Canada;

•

International Lodging, which includes the Marriott Hotels & Resorts, JW Marriott, Renaissance Hotels, Courtyard, Fairfield Inn & Suites, Residence Inn, and Marriott Executive Apartments properties located outside the continental United States and Canada;

•

Luxury Lodging, which includes The Ritz-Carlton and Bulgari Hotels & Resorts properties worldwide (together with residential properties associated with some Ritz-Carlton hotels), as well as EDITION, for which no properties are yet open; and

•

Timeshare, which includes the development, marketing, operation, and sale of Marriott Vacation Club, The Ritz-Carlton Destination Club, The Ritz-Carlton Residences, and Grand Residences by Marriott timeshare, fractional ownership, and residential properties worldwide.

We evaluate the performance of our segments based primarily on the results of the segment without allocating corporate expenses, income taxes, or indirect general, administrative, and other expenses. With the exception of the Timeshare segment, we do not allocate interest income or interest expense to our segments. Prior to the 2010 first quarter, we included note sale gains/(losses) in our Timeshare segment results. Due to our adoption of ASU Nos. 2009-16 and 2009-17, as discussed in Footnote No. 1, “Basis of Presentation,” we no longer account for note receivable securitizations as sales but rather as secured borrowings as defined in these topics, and therefore, we do not expect to recognize gains or losses on future note receivable securitizations. We include interest income and interest expense associated with our Timeshare segment notes in our Timeshare segment results because financing sales and securitization transactions are an integral part of that segment’s business. In addition, we allocate other gains and losses, equity in earnings or losses from our joint ventures, divisional general, administrative, and other expenses, and income or losses attributable to noncontrolling interests to each of our segments. “Other unallocated corporate” represents that portion of our revenues, general, administrative, and other expenses, equity in earnings or losses, and other gains or losses that are not allocable to our segments.

We aggregate the brands presented within our North American Full-Service, North American Limited-Service, International, Luxury, and Timeshare segments considering their similar economic characteristics, types of customers, distribution channels, the regulatory business environment of the brands and operations within each segment and our organizational and management reporting structure.

Revenues


	Twelve Weeks Ended
*($ in millions)*	March 26, 2010		March 27, 2009
North American Full-Service Segment	$	1,163	$	1,166
North American Limited-Service Segment		461		441
International Segment		267		247
Luxury Segment		366		351
Timeshare Segment		358		277

Total segment revenues		2,615		2,482
Other unallocated corporate		15		13

	$	2,630	$	2,495

Income (Loss) Attributable to Marriott


	Twelve Weeks Ended
*($ in millions)*	March 26, 2010			March 27, 2009
North American Full-Service Segment	$	71		$	69
North American Limited-Service Segment		59			33
International Segment		33			37
Luxury Segment		21			(22	)
Timeshare Segment		25			(17	)

Total segment financial results		209			100
Other unallocated corporate		(53	)		(66	)
Interest expense and interest income ⁽¹⁾		(27	)		(23	)
Income taxes		(46	)		(34	)

	$	83		$	(23	)

⁽¹⁾ Of the $45 million of interest expense shown on the Condensed Consolidated Statement of Income for the 2010 first quarter, we allocated $14 million to our Timeshare Segment.

Net Losses Attributable to Noncontrolling Interests


	Twelve Weeks Ended
*($ in millions)*	March 26, 2010			March 27, 2009
Timeshare Segment net losses attributable to noncontrolling interests	$	0		$	3
Provision for income taxes		0			(1	)

	$	0		$	2


Equity in Losses of Equity Method Investees
	Twelve Weeks Ended
*($ in millions)*	March 26, 2010			March 27, 2009
North American Limited-Service Segment		(5	)		(3	)
Luxury Segment		(1	)		(30	)
Timeshare Segment		(5	)		(1	)

		(11	)		(34	)

Assets


	At Period End
*($ in millions)*	March 26, 2010		January 1, 2010
North American Full-Service Segment	$	1,179	$	1,175
North American Limited-Service Segment		478		468
International Segment		837		849
Luxury Segment		648		653
Timeshare Segment		3,448		2,653

Total segment assets		6,590		5,798
Other unallocated corporate		2,203		2,135

	$	8,793	$	7,933

We estimate that, for the 20-year period from 2010 through 2029, the cost of completing all phases of our existing portfolio of owned timeshare properties will be approximately $2.9 billion. This estimate is based on our current development plans, which remain subject to change.

Restructuring Costs And Other Charges

3 Months Ended

Mar. 26, 2010

Restructuring Costs and Other Charges

14.

Restructuring Costs and Other Charges

During the latter part of 2008, we experienced a significant decline in demand for domestic and international hotel rooms based in part on the failures and near failures of a number of large financial service companies in the fourth quarter of 2008 and the dramatic downturn in the economy. Our capital-intensive Timeshare business was also hurt globally by the downturn in market conditions and particularly the significant deterioration in the credit markets, which resulted in our decision not to complete a note sale in the fourth quarter of 2008 (although we did complete note sales in the first and fourth quarters of 2009). These declines resulted in reduced management and franchise fees, cancellation of development projects, reduced timeshare contract sales, and anticipated losses under guarantees and loans. In the fourth quarter of 2008, we put certain company-wide cost-saving measures in place in response to these declines, with individual company segments and corporate departments implementing further cost saving measures. Upper-level management responsible for the Timeshare segment, hotel operations, development, and above-property level management of the various corporate departments and brand teams individually led these decentralized management initiatives.

The various initiatives resulted in aggregate restructuring costs of $55 million that we recorded in the fourth quarter of 2008. We also recorded $137 million of other charges in the 2008 fourth quarter. For information regarding the fourth quarter 2008 charges, see Footnote No. 20, “Restructuring Costs and Other Charges,” in our 2008 Form 10-K. As part of the restructuring actions we began in the fourth quarter of 2008, we initiated further cost savings measures in 2009 associated with our Timeshare segment, hotel development, above-property level management, and corporate overhead that resulted in additional restructuring costs of $51 million in 2009, including $2 million in restructuring costs in the 2009 first quarter. We completed this restructuring in 2009 and do not expect to incur additional expenses in connection with these initiatives. We also recorded $162 million of other charges in 2009, including $127 million of other charges in the 2009 first quarter. For information regarding the 2009 charges, see Footnote No. 21, “Restructuring Costs and Other Charges,” in our 2009 Form 10-K.

Summary of Restructuring Costs and Liability

The following table provides additional information regarding our restructuring, including the balance of the liability at the end of the first quarter of 2010 and total costs incurred through the end of the restructuring in 2009.


*($ in millions)*	Restructuring Costs Liability at January 1, 2010		Cash Payments in the 2010 First Quarter		Restructuring Costs Liability at March 26, 2010		Total Cumulative Restructuring Costs through 2009⁽¹⁾
Severance-Timeshare	$	4	$	2	$	2	$	29
Facilities exit costs-Timeshare		18		1		17		34
Development cancellations-Timeshare		0		0		0		10

Total restructuring costs-Timeshare		22		3		19		73

Severance-hotel development		1		0		1		4
Development cancellations-hotel development		0		0		0		22

Total restructuring costs-hotel development		1		0		1		26

Severance-above property-level management		2		1		1		7

Total restructuring costs-above property-level management		2		1		1		7

Total restructuring costs	$	25	$	4	$	21	$	106

⁽¹⁾	Includes charges recorded in the 2008 fourth quarter through year-end 2009. We did not incur and do not expect to incur additional expenses as part of the restructuring.

Variable Interest Entities

3 Months Ended

Mar. 26, 2010

Variable Interest Entities

15.

Variable Interest Entities

In accordance with the guidance for the consolidation of variable interest entities, we analyze our variable interests, including loans, guarantees, and equity investments, 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 analyses to determine if we must consolidate a variable interest entity as the primary beneficiary.

We periodically sell, without recourse, through special purpose entities, notes receivable originated by our Timeshare segment in connection with the sale of timeshare interval and fractional products. These securitizations provide funding for the Company and transfer the economic risks and substantially all the benefits of the loans to third parties. In a securitization, various classes of debt securities that the special purpose entities issue are generally collateralized by a single tranche of transferred assets, which consist of timeshare notes receivable. The Company services the notes receivable. With each securitization, we may retain a portion of the securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized receivables or, in some cases, overcollateralization and cash reserve accounts.

Pursuant to generally accepted accounting principles that existed prior to fiscal year 2010, these entities met the definition of QSPEs, and we were not required to evaluate them for consolidation. Upon implementation in the 2010 first quarter of the new accounting topics related to transfers of financial assets (see Footnote No. 1, “Basis of Presentation” for additional information), the Company evaluated these entities for consolidation. We created these entities to serve as a mechanism for holding assets and related liabilities, and the entities have no equity investment at risk, making them variable interest entities. We continue to service the notes and transfer all proceeds collected to these special purpose entities and retain rights to receive benefits that are potentially significant to the entities. Thus, under the new accounting topics, we have concluded that we are the entities’ primary beneficiary and, therefore, we consolidate them. Please see Footnote No. 1, “Basis of Presentation” for the impact of initial consolidation of these entities.

At March 26, 2010, the carrying amount of consolidated assets included within our Condensed Consolidated Balance Sheet that are collateral for the variable interest entities’ obligations totaled $1,056 million, comprised primarily of $112 million and $897 million of current and long-term notes receivable (net of reserves), respectively. In addition, we consolidated $31 million and $16 million of current and long-term restricted cash, respectively. Further, at March 26, 2010, the carrying amount of the consolidated liabilities included within our Condensed Consolidated Balance Sheet for these variable interest entities totaled $1,047 million, comprised of $4 million of interest payable, $120 million of current portion of long-term debt and $923 million of long-term debt. The noncontrolling interest balance was zero. The creditors of these entities do not have general recourse to us.

Under the terms of our timeshare note sales, we have the right at our option to repurchase defaulted mortgage notes at the outstanding principal balance. The transaction documents typically limit such repurchases to 10 to 15 percent of the transaction’s initial mortgage balance. Voluntary repurchases by us of defaulted notes during the 2010 and 2009 first quarters were $17 million and $11 million, respectively.

We have an equity investment in and a loan receivable due from a variable interest entity that develops and markets fractional ownership and residential interests, and we consolidate the entity because we are the primary beneficiary. We concluded that the entity is a variable interest entity because the voting rights are not proportionate to the economic interests. The loan we provided to the entity replaced the original senior loan, and at March 26, 2010, had a principal balance of $88 million and an accrued interest balance of $6 million. The variable interest entity uses the loan facility to fund its net cash flow. The loan’s outstanding principal balance did not increase during the 2010 first quarter.

At March 26, 2010, the carrying amount of consolidated assets included within our Condensed Consolidated Balance Sheet that are collateral for the variable interest entity’s obligations totaled $33 million and comprised $30 million of real estate held for development, property, equipment, and other assets and $3 million of cash. Further, at March 26, 2010, the carrying amount of the consolidated liabilities included within our Condensed Consolidated Balance Sheet for this variable interest entity totaled $4 million and the noncontrolling interest was zero. The creditors of this entity do not have general recourse to us. We have contracted to purchase the noncontrolling interest in the entity for less than $1 million. The acquisition will occur in stages. We acquired 3 percent of the noncontrolling interest in the entity during the 2009 third quarter, which provided us with a majority voting interest, and 47 percent of the noncontrolling interest in the entity during the 2010 first quarter. The acquisition is expected to be completed in the 2010 third quarter. Our involvement with the entity did not have a material effect on financial performance or cash flows during the 2010 first quarter.

Our Timeshare segment uses several special purpose entities to maintain ownership of real estate in certain jurisdictions in order to facilitate sales within pooled ownership structures (the “Clubs”). We absorb the variability in the assets of the Clubs to the extent that inventory has not been sold to the ultimate Club member. The Clubs are variable interest entities because the equity investment at risk is not sufficient to permit the entities to finance their activities without additional support from other parties.

We contributed all of the Clubs’ assets to them, in exchange for all of the entities’ beneficial interests. We determined that we are the primary beneficiary of two of the Clubs as we have the power to direct the activities that most significantly impact the economic performance of the entities through our rights to market and sell the assets of the entities and our rights to the proceeds from such sale. At the end of the 2010 first quarter, the carrying amount of assets included in our Condensed Consolidated Balance Sheet associated with the consolidated Clubs was $19 million, comprised entirely of inventory. The carrying amount of liabilities included in our Condensed Consolidated Balance Sheet was less than $1 million, and there were no noncontrolling interests. Our involvement with the Clubs did not have a material effect on our financial position, financial performance or cash flows during the 2010 first quarter. The creditors of these entities do not have general recourse to us.

We determined that we were not the primary beneficiary of one previously consolidated Club beginning in the 2010 first quarter. By virtue of transfer of variable interests to third parties, the power to direct the activities that most significantly impact economic performance of the entity is now shared amongst the variable interest holders. Our maximum exposure to loss is $26 million, the carrying value of our interest in this entity, which is classified as inventory, and the carrying costs during the holding period.

We have a call option on the equity of a variable interest entity that holds property and land acquired for timeshare development that is currently operated by us as a hotel, which gives us ultimate power to direct the activities of the entity that most significantly impact economic performance. The entity is a variable interest entity because the equity investment at risk is not sufficient to permit the entity to finance its activities without additional support from other parties. At March 26, 2010, the carrying amount of the entity’s assets included within our Condensed Consolidated Balance Sheet totaled $19 million, entirely comprised of property and land. The carrying amount of the liabilities included within our Condensed Consolidated Balance Sheet for this variable interest entity totaled less than $1 million and the noncontrolling interest was zero. Our involvement with the entity did not have a material affect on our financial performance or cash flows during the 2010 first quarter. The creditors of this entity do not have general recourse to us.

We have an equity investment in and a loan receivable due from a variable interest entity that develops and markets fractional ownership and residential interests, and we do not consolidate the entity because we are not the primary beneficiary. We concluded that the entity is a variable interest entity because the equity investment at risk is not sufficient to permit the entity to finance its activities without additional support from other parties. We have determined that we are not the primary beneficiary as power to direct the activities that most significantly impact economic performance of the entity is shared amongst the variable interest holders. During the first quarter of 2010, we advanced less than $1 million in additional loans to fund progress toward completion of the project. In the 2009 third quarter, we fully impaired our equity investment and certain loans receivable due from the entity. We may fund up to an additional $28 million and do not expect to recover this amount, which has been accrued and is included in current liabilities. See Footnote No. 20, “Timeshare Strategy-Impairment Charges,” in the 2009 Form 10-K for additional information. Coupled with the outstanding balance of $4 million on our loan receivable, our maximum exposure to loss is $32 million.

In conjunction with the transaction with CTF described more fully in Footnote No. 8, “Acquisitions and Dispositions,” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2007, under the caption “2005 Acquisitions,” we manage 12 hotels on behalf of four tenant entities 100 percent owned by CTF, which lease the hotels from third-party owners. Due to certain provisions in the management agreements, we account for these contracts as operating leases. The entities have minimal equity and minimal assets comprised of hotel working capital and furniture, fixtures, and equipment. In conjunction with the 2005 transaction, CTF had placed money in a trust account to cover cash flow shortfalls and to meet rent payments. In turn, we released CTF from their guarantees fully in connection with eight of these properties and partially in connection with the other four properties. At March 26, 2010, the trust account held approximately $7 million. The tenant entities are variable interest entities because the holder of the equity investment at risk, CTF, lacks the ability through voting rights to make key decisions about the entities’ activities that have a significant effect on the success of the entities. We do not consolidate the entities because we do not bear the majority of the expected losses. We are secondarily liable (after exhaustion of funds from the trust account) for rent payments for eight of the 12 hotels in the event that there are cash flow shortfalls. Future minimum lease payments through the end of the lease term for these hotels totaled approximately $63 million at March 26, 2010. In addition, we are secondarily liable for rent payments of up to an aggregate cap of $19 million for the four other hotels in the event that there are cash flow shortfalls. Our maximum exposure to loss is limited to the rent payments and certain other tenant obligations under the lease, for which we are secondarily liable.

- Definition

Disclosure of variable interest entities (VIE), including, but not limited to the nature, purpose, size, and activities of the VIE, the carrying amount and classification of consolidated assets that are collateral for the VIE's obligations, lack of recourse if creditors (or beneficial interest holders) of a consolidated VIE have no recourse to the general credit of the primary beneficiary. An enterprise that holds a significant variable interest in a VIE but is not the primary beneficiary may disclose the nature of its involvement with the VIE and when that involvement began, the nature, purpose, size, and activities of the VIE and the enterprise's maximum exposure to loss as a result of its involvement with the VIE.

+ References+ Details