MARMarriott International

We note you provide ranges for Adjusted EPS - diluted for your first quarter 2023 and full-year fiscal 2023 guidance. However, you did not provide reconciliations to the most directly comparable GAAP measures. In future filings, please provide the reconciliations required by Item 10(e)(1)(i) of Regulation S-K.

Rest of the question

To the extent you are relying on the “unreasonable efforts” exception in Item 10(e)(1)(i)(B), revise future filings to disclose this fact and identify any information that is unavailable and its probable significance. Reference is made to Question 102.10 of the Division’s Compliance and Disclosure Interpretations for Non-GAAP Financial Measures.

#1

Marriott respectfully advises the Staff that it is relying on the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K to not provide reconciliations to the most directly comparable GAAP measure for the Adjusted EPS—diluted guidance for its first quarter 2023 and full-year fiscal 2023 included on page 5 of Exhibit 99.

When we provided ranges for the Adjusted EPS – diluted metrics on page 5 of Exhibit 99, we footnoted this disclosure with the following footnote #3:

“3 Adjusted EBITDA and Adjusted EPS – diluted for first quarter and full year 2023 do not include cost

Rest of the answer

reimbursement revenue, reimbursed expenses, restructuring, merger-related charges, and other expenses, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy, and which may be significant.”

Marriott believes this footnote satisfies the requirements of Item 10(e)(1)(i)(B) of Regulation S-K as it explains that Marriott cannot “forecast with sufficient accuracy” certain items. It also identifies what information is unavailable (“cost reimbursement revenue, reimbursed expenses, restructuring, merger-related charges, and other expenses, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy”) and its probable significance (“which may be significant”). However, Marriott will revise future filings to make clear that it is relying on the “unreasonable efforts” exception by adding the underlined text to the relevant disclosure:

“3 Adjusted EBITDA and Adjusted EPS – diluted for first quarter and full year 2023 do not include cost reimbursement revenue, reimbursed expenses, restructuring, merger-related charges, and other expenses, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.”

* * *

We acknowledge that Marriott is responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff.

Read in the reply ↗

We note your auditor has concluded in their report that the Company has maintained effective internal control over financial reporting as of December 31, 2020. Separately, on page 42, the auditor’s report indicates an adverse opinion has been expressed. Please clarify.

#1

Shortly before receiving the Staff’s comment, we identified a typographical error in Ernst & Young LLP’s (“EY”) financial statement audit opinion that incorrectly referred to the separate attestation on internal control over financial reporting (“ICFR”) as being “adverse” due to an oversight in updating the audit report from the prior year. Both management and EY had concluded, as stated in management’s report on ICFR and EY’s attestation report on ICFR, that Marriott’s ICFR was effective as of December 31, 2020.

Rest of the answer

We have evaluated the error and, in light of the totality of the disclosures in the 2020 Form 10-K, we do not believe an amended filing is necessary.

In Part II, Item 8 of the 2020 Form 10-K, on page 40 is management’s report on ICFR, in which management states its conclusion that, as of December 31, 2020, Marriott’s ICFR was effective to provide reasonable assurance of the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. On page 41 is EY’s February 18, 2021 report on ICFR, in which EY states its unqualified opinion that Marriott maintained, in all material respects, effective ICFR as of December 31, 2020. There is no description of any material weakness in either management’s report or EY’s report. On page 42 is EY’s report on Marriott’s financial statements, which report contains an incorrect cross-reference describing EY’s separate opinion on ICFR. Instead of correctly stating that EY expressed an “unqualified” opinion on ICFR, the report states that EY expressed an “adverse” opinion.

We believe that a reasonable investor would not be misled by this typographical and immaterial error in the financial statement opinion given EY’s attestation report on ICFR on the prior page, management’s report on ICFR on the page before that, and the absence of any disclosures of material weaknesses. There might be a concern if the audit report inappropriately implied that EY’s ICFR opinion was unqualified when, in fact, it was not. However, this is not our circumstance.

Accordingly, we do not believe that an amendment to the 2020 Form 10-K is necessary.

* * *

We acknowledge that Marriott is responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff.

Read in the reply ↗

We note your response to our prior comment and are unable to agree that an amended filing is not necessary. Please amend your 2020 10-K to correct the error in your auditor's report.

#1

On April 2, 2021, Marriott filed an amendment to its 2020 Form 10-K to correct the error in its auditor’s report.

* * *

We acknowledge that Marriott is responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff. Read in the reply ↗