UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the plan year ended December 31, 2017 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to | ||
Commission file number 1-13881
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: | |
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’
PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: | |
MARRIOTT INTERNATIONAL, INC.
10400 Fernwood Road
Bethesda, Maryland 20817
REQUIRED INFORMATION
Financial Statements and Exhibits as follows:
1 | Financial statements |
•Report of Independent Registered Public Accounting Firm CohnReznick LLP
•Statements of Net Assets Available for Benefits as of December 31, 2017 and December 31, 2016
•Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2017
•Notes to Financial Statements
Certain schedules have been omitted because they are not applicable, not material or because the information is included in the financial statements or the notes thereto.
2 | Supplemental Schedule |
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
3 | Signatures |
4 | Exhibits |
23.1 Consent of Independent Registered Public Accounting Firm – CohnReznick LLP
Marriott International, Inc. Employees’ Profit Sharing,
Retirement and Savings Plan and Trust
Financial Statements and Supplemental Schedule With
Report of Independent Registered Public Accounting Firm
December 31, 2017 and 2016
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE WITH REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
DECEMBER 31, 2017 AND 2016
TABLE OF CONTENTS
PAGE | ||
Financial Statements | ||
Exhibit Index | ||
3
Report of Independent Registered Public Accounting Firm
The Profit Sharing Committee
Marriott International, Inc. Employees’ Profit Sharing,
Retirement and Savings Plan and Trust
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the Marriott International, Inc. Employees' Profit Sharing, Retirement and Savings Plan and Trust (the “Plan”) as of December 31, 2017 and 2016, and the related statement of changes in net assets available for benefits for the year ended December 31, 2017, and the related notes to the financial statements. In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2017 and 2016, and the changes in net assets available for benefits for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The schedule of assets (held at end of year) as of December 31, 2017 has been subjected to audit procedures performed in conjunction with the audit of the Plan's 2017 financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
We have served as the Plan's auditor since 2014.
/s/CohnReznick LLP
Bethesda, Maryland
June 25, 2018
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MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2017 AND 2016
December 31 | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Investments in Marriott International, Inc. Pooled Investment Trust for Participant-Directed Accounts, at fair value | $ | 6,702,657,942 | $ | 5,308,188,535 | ||||
Total investments | 6,702,657,942 | 5,308,188,535 | ||||||
Receivables: | ||||||||
Notes receivable from participants | 132,091,421 | 122,334,387 | ||||||
Due from Marriott International, Inc. for Company contribution | 86,453,717 | 80,937,156 | ||||||
Total receivables | 218,545,138 | 203,271,543 | ||||||
Total assets | 6,921,203,080 | 5,511,460,078 | ||||||
Liabilities | ||||||||
Accrued expenses | 481,501 | 453,266 | ||||||
Total liabilities | 481,501 | 453,266 | ||||||
Net assets available for benefits | $ | 6,920,721,579 | $ | 5,511,006,812 | ||||
The accompanying notes are an integral part of these financial statements.
5
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2017
Additions | |||
Interest income on notes receivable from participants | $ | 6,817,091 | |
Appreciation in investments from participation in Marriott International, Inc. Pooled Investment Trust for Participant-Directed Accounts | 1,421,931,649 | ||
Participants contributions | 234,312,208 | ||
Rollover contributions | 10,645,728 | ||
Marriott International, Inc. contributions | 88,487,408 | ||
Total additions | 1,762,194,084 | ||
Deductions | |||
Benefits paid to participants | 349,622,096 | ||
Administrative expenses | 2,857,221 | ||
Total deductions | 352,479,317 | ||
Net increase | 1,409,714,767 | ||
Net assets available for benefits at beginning of year | 5,511,006,812 | ||
Net assets available for benefits at end of year | $ | 6,920,721,579 | |
The accompanying notes are an integral part of these financial statements.
6
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
NOTE 1: | DESCRIPTION OF THE PLAN |
The following description of Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust (the “Plan”), sponsored by Marriott International, Inc. (the “Company”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering eligible employees of the Company who are eligible to participate after completing 90 days of service. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.
During 2017, the Plan was amended to automatically enroll in the Plan certain employees' of Starwood Hotels and Resorts Worldwide, LLC, a wholly-owned subsidiary of the Company, who were participants in the Starwood Hotels and Resorts Worldwide Savings and Retirement Plan (the "Starwood Plan"), effective January 1, 2018. Furthermore, the Starwood Plan is expected to merge with and into the Plan on June 30, 2018.
The Plan’s assets are held and invested on a commingled basis in the Marriott International, Inc. Pooled Investment Trust for Participant-Directed Accounts (the “Master Trust”) (see Note 3).
Contributions
Each pay period, participants may contribute up to 80% or a fixed dollar amount (minimum of $3 per week) of weekly compensation. The Plan administrator limits contributions by highly compensated employees to ensure satisfaction of nondiscrimination tests; for 2017 the limit on highly compensated employees was 7% of weekly compensation from January to September and 8% from October to December.
Participants may also contribute (rollover) amounts representing distributions from other qualified defined benefit or defined contribution plans.
Participants who are age 50 or older by the end of the applicable Plan year and have contributed the maximum contributions allowable by the Plan during the Plan year may make an additional catch-up contribution. The catch-up contribution is subject to the Internal Revenue Service limitation of $6,000 for the year ended December 31, 2017.
The Plan offers a Company discretionary contribution which is allocated proportionally to each allocation group (all participants eligible for the discretionary contribution at the same work location and in the same job classification, hourly or non-hourly). Each participant’s share of the discretionary contribution is determined proportionally based on the first 3% of eligible compensation contributed to the Plan, as compared to that contributed in total by all participants in the allocation group, and the second 3% of eligible compensation contributed to the Plan, as compared to that contributed in total by all participants in the allocation group.
To be eligible for the discretionary contributions, employees must be at least 21 years of age, completed 1,000 hours of service within a 12-month period beginning on the hire date or any anniversary of the hire date and be employed as of the last Friday of the Plan year, although employees whose employment ends due to retirement, disability or death will be eligible for a discretionary contribution on their contributions for the Plan year. In general, Company contributions are allocated among participants’ accounts after the close of the Plan year. The Company also makes supplemental contributions at select locations to non-management, non-highly compensated hourly associates who are eligible for the discretionary contribution in the Plan who are not, in most cases, in a collective bargaining agreement. Contributions are subject to certain limitations.
Participant Accounts
Individual accounts are maintained for each participant. Each participant account is credited with the participant contributions, the Company discretionary contribution (if any), the Company supplemental contribution (if eligible), an allocation of Plan earnings or losses, and charged with an allocation of administrative expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
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Vesting
Participants are immediately 100% vested in their contributions plus actual earnings thereon, as well as in Company contributions.
Notes Receivable from Participants
Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from 1 to 4 years or up to 10 years for the purchase of a primary residence. The loans are collateralized by the vested balance in the participant’s account. The interest rate is fixed at the time the loan is granted. Prior to July 2, 2012, Plan loans bore interest at the prime rate published by the Wall Street Journal plus one percentage point. For loans issued on and after July 2, 2012, loans bear interest at the prime rate as of the last business day of the prior calendar quarter as published by published by the Wall Street Journal plus two percentage points, except that for the loans issued in third quarter of 2016, loans bear an interest rate as of the last business day of the prior calendar quarter as published by the Wall Street Journal plus one percentage point. Interest rates on outstanding loans range from 4.25% to 10.5%.
Principal and interest are paid ratably through weekly or bi-weekly after-tax payroll deductions. In cases where payroll deductions are not available, loan repayments can be made via direct debit, certified check, cashiers’ check or money order. Participants generally are limited to one outstanding loan.
Payment of Benefits
Upon termination of service, death, disability, or retirement upon either age 55 and 10 years of service or 20 years of service regardless of age, a participant with an account balance greater than $5,000 can elect to receive a lump sum amount, partial distributions or installment payments equal to the value of the participant’s vested interest in his or her account. If a participant’s account balance is at least $1,000, but not more than $5,000, the participant’s vested account balance will be rolled-over into an individual retirement account established by the Plan if the participant does not elect, within time frames established by the Plan administrator, to receive a lump sum cash distribution or to make a direct rollover. The Plan provides for automatic lump sum distribution for participants who terminate employment with a vested account balance of less than $1,000.
Administration
The Profit Sharing Committee serves as the named fiduciary of the Plan. Administration of the Plan is under the direction of (i) the Profit Sharing Committee, all of whom are members of senior management of the Company; (ii) a trustee who is a corporate officer of the Company; and (iii) a Plan administrator, who is an employee of the Company. The Profit Sharing Committee is responsible for investment of the Plan assets, other than the Company Stock Fund and has delegated many responsibilities to the trustee and the investment managers it appoints. The Stock Fund Investment Committee is the sole named fiduciary of the Plan with regards to the investment of the Company Stock Fund.
Administrative and Investment Expenses
To the extent not paid by the Company, certain administrative and all investment expenses are paid by the Plan and then allocated to participants based on account balances.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.
Investment Options
Upon enrollment in the Plan, a participant may allocate employer and employee contributions to any of the available investment options. Participants may change their investment options on a daily basis.
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NOTE 2: | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Investments Valuation and Income Recognition
The Plan’s investments are stated at fair value. The fair value of the Plan’s interest in the Master Trust is based on the specific interest that the Plan has in underlying investments. The investments of the Master Trust are valued as described under Fair Value Measurements in Note 2.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and losses on investments bought and sold, as well as held during the year.
Payment of Benefits
Benefits are recorded when paid.
Fair Value Measurements
Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures establishes a framework for measuring fair value. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements), the next priority to quoted values based on observable inputs (Level 2 measurements), and the lowest priority to values based on unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy under ASC 820 are briefly described below:
Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. For example, stocks listed on a recognized exchange or listed mutual funds. | |
Level 2 | Inputs to the valuation methodology include: | |
• | Quoted prices for similar assets or liabilities in active markets; |
• | Quoted prices for identical or similar assets or liabilities in inactive markets; |
• | Inputs other than quoted prices that are observable for the asset or liability; |
• | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. For example, real estate using an independent appraisal process would be Level 3. | |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value as of December 31, 2017 and 2016.
Common and Preferred Stock – Securities are priced at the closing price reported on the active market on which individual securities are traded.
Corporate bonds – Valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks or a broker quote if available.
9
Mutual funds – Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.
Common Collective Trust – Valued at the NAV of units of a collective trust. The NAV, as provided by the custodian, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities.
Government Debt Securities – Valued using pricing models maximizing the use of observable inputs for similar securities.
The Company Stock Fund (the “Stock Fund”) is tracked on a unitized basis. The Stock Fund consists of Marriott International, Inc. common stock, funds held in the Northern Trust Company Collective Short-Term Investment Fund sufficient to meet the Stock Fund’s daily cash needs, as well as interest and dividends receivable. Unitizing the Stock Fund allows for daily trades. The value of a unit reflects the combined market value of Marriott International, Inc. common stock, valued at its quoted market price, and the cash investments and receivables held by the Stock Fund. At December 31, 2017, 17,753,791 units were outstanding with a value of $92.87 per unit. At December 31, 2016, 18,293,953 units were outstanding with a value of $56.93 per unit.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in valuation methodologies from December 31, 2016 to December 31, 2017.
Notes Receivable from Participants
Notes receivable from participants are recorded at principal less repayments plus accrued interest. Interest income is recorded on the accrual basis. A loan is considered in default if a payment is not made within 90 days after the due date; an outstanding loan balance is not repaid by the original due date; or there is a material misrepresentation in connection with the loan application. If the loan is deemed to be in default, the participant loan balance is reduced and a benefit payment is recorded.
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NOTE 3: | MASTER TRUST |
The Plan’s custodian is The Northern Trust Company (“Northern Trust”). The assets of the Plan are principally held and invested on a commingled basis in the Master Trust, which was established for the investment of the assets of the Plan and another retirement plan sponsored by the Company, Marriott International, Inc. Employees’ 401(k) Plan (the “401k Plan”).
The assets, interest and dividend income, investment expenses, and realized and unrealized appreciation (depreciation) in fair value of investments of the Master Trust are allocated to the participating plans based on the number of units outstanding in each fund in which the Plan invests at the conclusion of each business day, except for participant loans, which are based on actual loan balances of each plan’s participants. Participant loans are considered to be an asset held outside of the Master Trust. In addition, only the Plan’s participants can invest in the Marriott Common Stock Fund. At December 31, 2017 and 2016 the Plan’s overall interest in the net assets of the Master Trust was 99.55% and 99.54%, respectively.
The following table presents the net assets of the Master Trust as of December 31, 2017 and 2016:
2017 | 2016 | |||||||
Assets | ||||||||
Investments, at fair value | $ | 6,734,270,392 | $ | 5,338,474,323 | ||||
Receivables: | ||||||||
Receivables from sale of investments | 1,520,228 | 14,928,250 | ||||||
Accrued interest and dividends | 79,099 | 54,673 | ||||||
Total receivables | 1,599,327 | 14,982,923 | ||||||
Total assets | 6,735,869,719 | 5,353,457,246 | ||||||
Liabilities | ||||||||
Accounts payable on investments purchased | 596,343 | 18,798,899 | ||||||
Custodian and advisor fees payable | 2,451,361 | 2,186,673 | ||||||
Total liabilities | 3,047,704 | 20,985,572 | ||||||
Net assets available for benefits | $ | 6,732,822,015 | $ | 5,332,471,674 | ||||
The following table presents the changes in net assets of the Master Trust during the year ended December 31, 2017:
Net appreciation in fair value of investments | $ | 1,364,926,917 | |
Interest | 27,330,062 | ||
Dividends | 42,530,913 | ||
Investment gain before investment management fees | 1,434,787,892 | ||
Investment management fees | (8,675,373 | ) | |
Net transfers | (25,762,178 | ) | |
Increase in net assets | 1,400,350,341 | ||
Net assets: | |||
Beginning of year | 5,332,471,674 | ||
End of year | $ | 6,732,822,015 | |
The following table presents the net investment gains of the Master Trust for the year ended December 31, 2017:
Net realized and unrealized appreciation in fair value of investments | $ | 1,364,926,917 | |
Interest and dividend income | 69,860,975 | ||
Investment gain before investment management fees | 1,434,787,892 | ||
Investment management fees | (8,675,373 | ) | |
Net investment gains | $ | 1,426,112,519 | |
The net investment gains of the Master Trust is comprised of the net investment gain for the Plan of $1,421,931,649 and net investment gain for the 401k Plan of $4,180,870.
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NOTE 4: | FAIR VALUE MEASUREMENTS |
The following tables present the investments in the Master Trust that are measured at fair value on a recurring basis at December 31, 2017 and 2016. Classification within the fair vale hierarchy table is based on the lowest level of any input that is significant to the fair value measurement.
Assets at Fair Value as of December 31, 2017 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 5,851,653 | $ | — | $ | — | $ | 5,851,653 | ||||||||
Corporate bonds | — | 436,539,520 | — | 436,539,520 | ||||||||||||
Preferred stock | 4,003,836 | 2,922,689 | — | 6,926,525 | ||||||||||||
Common stock - Marriott International, Inc. | 1,657,412,196 | — | — | 1,657,412,196 | ||||||||||||
Common stock - others | 1,843,644,084 | 1,310,233 | — | 1,844,954,317 | ||||||||||||
Foreign government debt securities | — | 7,493,088 | — | 7,493,088 | ||||||||||||
U.S. government debt securities | — | 588,887,499 | — | 588,887,499 | ||||||||||||
Mutual funds | 278,928,438 | — | — | 278,928,438 | ||||||||||||
Total assets in the fair value hierarchy | 3,789,840,207 | 1,037,153,029 | — | 4,826,993,236 | ||||||||||||
Investments measured at net asset value (a) | — | — | — | 1,907,277,156 | ||||||||||||
Total investments at fair value | $ | 3,789,840,207 | $ | 1,037,153,029 | $ | — | $ | 6,734,270,392 | ||||||||
Assets at Fair Value as of December 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 5,182,470 | $ | — | $ | — | $ | 5,182,470 | ||||||||
Corporate bonds | — | 466,506,128 | — | 466,506,128 | ||||||||||||
Preferred stock | 3,508,938 | 2,305,562 | — | 5,814,500 | ||||||||||||
Common stock - Marriott International, Inc. | 1,047,950,810 | — | — | 1,047,950,810 | ||||||||||||
Common stock - others | 1,525,938,969 | 822,892 | — | 1,526,761,861 | ||||||||||||
Foreign government debt securities | — | 7,534,342 | — | 7,534,342 | ||||||||||||
U.S. government debt securities | — | 540,637,942 | — | 540,637,942 | ||||||||||||
Mutual funds | 510,214,381 | — | — | 510,214,381 | ||||||||||||
Total assets in the fair value hierarchy | 3,092,795,568 | 1,017,806,866 | — | 4,110,602,434 | ||||||||||||
Investments measured at net asset value (a) | — | — | — | 1,227,871,889 | ||||||||||||
Total investments at fair value | $ | 3,092,795,568 | $ | 1,017,806,866 | $ | — | $ | 5,338,474,323 | ||||||||
(a) | In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the statements of net assets available for benefits. |
There were no Level 3 investments at December 31, 2017 and 2016.
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The following table summarizes investments for which fair value is measured using Net Asset Value per share practical expedient as of December 31, 2017 and 2016. There are no participant redemption restrictions for these investments; the redemption notice period is applicable only to the Plan.
December 31, 2017 | December 31, 2016 | Redemption | Redemption | ||||||||
Fair Value | Fair Value | Frequency (if currently eligible) | Notice Period | ||||||||
COLTV Short-term Investment Fund | $ | 89,946,096 | $ | 87,639,886 | Daily | 30 days | |||||
Fidelity Contrafund | 356,835,529 | — | Daily | 90 days | |||||||
Fidelity Pyramis Emerging Equity Small Cap | 37,162,407 | 27,669,301 | Daily | 30 days | |||||||
Northern Trust Collective S&P 500 Index Fund | 270,339,083 | 219,748,678 | Daily | 30 days | |||||||
Vanguard Retirement 2015 | 111,308,611 | 97,637,506 | Daily | 60 days | |||||||
Vanguard Retirement 2025 | 312,352,912 | 244,845,581 | Daily | 60 days | |||||||
Vanguard Retirement 2035 | 293,807,870 | 225,546,241 | Daily | 60 days | |||||||
Vanguard Retirement 2045 | 245,474,395 | 179,139,898 | Daily | 60 days | |||||||
Vanguard Retirement 2055 | 79,572,623 | 49,750,108 | Daily | 60 days | |||||||
Vanguard Retirement Income | 110,477,630 | 95,894,690 | Daily | 60 days | |||||||
$ | 1,907,277,156 | $ | 1,227,871,889 | ||||||||
NOTE 5: | PARTY-IN-INTEREST |
The Plan may, at the discretion of Plan participants, invest an unlimited amount of its assets in securities issued by the Company. The Plan through the Stock Fund held 12,211,097 and 12,674,780 shares of common stock of the Company as of December 31, 2017 and 2016, respectively. Dividends on Marriott International, Inc. common stock were $15,773,673 and $14,847,356 for the years ended December 31, 2017 and 2016, respectively. The closing share price as listed on the Nasdaq stock exchange as of December 31, 2017 and 2016 was $135.73 and $82.68, respectively.
NOTE 6: | INCOME TAX STATUS |
The Plan received its most recent a determination letter from the Internal Revenue Service (“IRS”), dated August 11, 2016, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”), and therefore, the related Trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended, and Plan management believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code, and that the Plan and related Trust continue to be tax exempt.
U.S. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the organization has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
NOTE 7: | RISKS AND UNCERTAINTIES |
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term, and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.
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NOTE 8: | RECONCILIATION OF FINANCIAL STATEMENTS AND FORM 5500 |
The following is a reconciliation of net assets available for benefits as reported in the financial statements to the Form 5500:
December 31 | ||||||||
2017 | 2016 | |||||||
Net assets available for benefits as reported in financial statements at contract value | $ | 6,920,721,579 | $ | 5,511,006,812 | ||||
Loans deemed as distributions for financial statements reporting purposes | 6,896,758 | 6,244,172 | ||||||
Deemed distributions during the year for Form 5500 purposes | (658,724 | ) | (256,334 | ) | ||||
Net assets available for benefits as reported in Form 5500 | $ | 6,926,959,613 | $ | 5,516,994,650 | ||||
The following is a reconciliation of benefits paid to participants as reported in the financial statements to the Form 5500:
Benefits paid to participants as reported in the financial statements | $ | 349,622,096 | |
Loans deemed as distribution for financial statements reporting purposes as of December 31, 2017 | (6,896,758 | ) | |
Loans deemed as distribution for financial statements reporting purposes as of December 31, 2016 | 6,244,172 | ||
Net deemed distributions for the Form 5500 purposes for year ended December 31, 2017 | 658,724 | ||
Net deemed distributions for the Form 5500 purposes for year ended December 31, 2016 | (256,334 | ) | |
Benefits paid to participants as reported in the Form 5500 | $ | 349,371,900 | |
The following is a reconciliation of notes receivable from participants as reported in the financial statements to the Form 5500:
2017 | 2016 | |||||||
Notes receivable from participants per financial statements | $ | 132,091,421 | $ | 122,334,387 | ||||
Loans deemed as distributions for the purpose of financial statements | 6,896,758 | 6,244,172 | ||||||
Net deemed distributions during the year for the Form 5500 purposes | (658,724 | ) | (256,334 | ) | ||||
Notes receivable from participants per Form 5500 | $ | 138,329,455 | $ | 128,322,225 | ||||
The following is a reconciliation of the change in net assets available for benefits as reported in the financial statements to the Form 5500 for the year ended December 31, 2017:
Net increase in net assets available for benefits as reported in the financial statements | $ | 1,409,714,767 | |
Change in loans deemed as distributions for financial statements reporting purposes | 652,586 | ||
Change in net deemed distributions during the year for the Form 5500 purposes | (402,390 | ) | |
Net increase in net assets available for benefits as reported in the Form 5500 | $ | 1,409,964,963 | |
NOTE 9: | SUBSEQUENT EVENTS |
The Plan has evaluated events subsequent to December 31, 2017 and through June 25, 2018, the date the financial statements were available to be issued, and determined that there were no events that require adjustments to or disclosure in these financial statements.
14
SUPPLEMENTAL SCHEDULE
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
EIN: 52-2055918; Plan No.: 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
DECEMBER 31, 2017
Identity of Issue, Borrower, Lessor, or Similar Party | Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par, or Maturity Value | Cost** | Current Value | ||||
Notes receivable from Participants * | Interest rates range from 4.25% to 10.5%; varying maturities | $ | 138,329,455 | ||||
* Party-in-interest to the Plan
**Cost information not required
See Report of Independent Registered Public Accounting Firm
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST | ||
Dated: June 25, 2018 | /s/ Tracey Ballow | |
Plan Administrator | ||
16
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-223052 and 333-226146) of Marriott International, Inc. of our report dated June 25, 2018 relating to the 2017 financial statements and schedule of Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust as of December 31, 2017 and 2016 and for the year ended December 31, 2017, which are included in the 2017 Form 11-K of Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust.
/s/ CohnReznick LLP
Bethesda, Maryland
June 25, 2018