What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-04 · 106 added, 95 removed, 278 unchanged (42% of the section changed)

1 unchanged sentence

MARRIOTT INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

($ in millions, except per share amounts)

Three Months Ended

March 31, 2022 March 31, 2021

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Base management fees $ 269 $ 156 $ 482 $ 262

6 unchanged sentences

Cost reimbursement revenue 3,920 2,338 7,066 4,118

5,338 3,149 9,537 5,465

OPERATING COSTS AND EXPENSES

4 unchanged sentences

Reimbursed expenses 3,827 2,255 7,006 4,088

4,388 2,663 8,029 4,895

OPERATING INCOME 950 486 1,508 570

3 unchanged sentences

Equity in earnings (losses) 15 ( 8 ) 17 ( 20 )

INCOME (LOSS) BEFORE INCOME TAXES 476 ( 27 )

INCOME BEFORE INCOME TAXES 878 381 1,354 354

(Provision) benefit for income taxes ( 200 ) 41 ( 299 ) 57

NET INCOME (LOSS) $ 377 $ ( 11 )

EARNINGS (LOSS) PER SHARE

Earnings (loss) per share - basic $ 1.15 $ ( 0.03 )

Earnings (loss) per share - diluted $ 1.14 $ ( 0.03 )

NET INCOME $ 678 $ 422 $ 1,055 $ 411

EARNINGS PER SHARE

Earnings per share - basic $ 2.06 $ 1.29 $ 3.21 $ 1.26

Earnings per share - diluted $ 2.06 $ 1.28 $ 3.20 $ 1.25

See Notes to Condensed Consolidated Financial Statements.

MARRIOTT INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

Three Months Ended

March 31, 2022 March 31, 2021

Net income (loss) $ 377 $ ( 11 )

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Net income $ 678 $ 422 $ 1,055 $ 411

Other comprehensive income (loss):

2 unchanged sentences

Total other comprehensive income (loss), net of tax ( 323 ) 96 ( 309 ) ( 59 )

Comprehensive income (loss) $ 391 $ ( 166 )

Comprehensive income $ 355 $ 518 $ 746 $ 352

See Notes to Condensed Consolidated Financial Statements.

43 unchanged sentences

($ in millions)

Three Months Ended

March 31, 2022 March 31, 2021

Six Months Ended

June 30, 2022 June 30, 2021

OPERATING ACTIVITIES

Net income (loss) $ 377 $ ( 11 )

Net income $ 1,055 $ 411

Adjustments to reconcile to cash provided by operating activities:

20 unchanged sentences

Issuance of Class A Common Stock — 2

Dividends paid ( 98 ) —

Purchase of treasury stock ( 300 ) —

Stock-based compensation withholding taxes ( 87 ) ( 83 )

4 unchanged sentences

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period (1)

$ 1,067 $ 642

(1) The 2022 amounts include beginning restricted cash of $ 28 million at December 31, 2021, and ending restricted cash of $ 25 million at March 31, 2022, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(1) The 2022 amounts include beginning restricted cash of $ 28 million at December 31, 2021, and ending restricted cash of $ 21 million at June 30, 2022, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

See Notes to Condensed Consolidated Financial Statements.

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and subsidiaries (referred to in this report as “we,” “us,” “Marriott,” or the “Company”).

In order to make this report easier to read, we also refer throughout to (1) our Condensed Consolidated Financial Statements as our “Financial Statements,” (2) our Condensed Consolidated Statements of Income (Loss) as our “Income Statements,” (3) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (4) our Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (5) our properties, brands, or markets in the United States and Canada as “U.S.

In order to make this report easier to read, we also refer throughout to (1) our Condensed Consolidated Financial Statements as our “Financial Statements,” (2) our Condensed Consolidated Statements of Income as our “Income Statements,” (3) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (4) our Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (5) our properties, brands, or markets in the United States and Canada as “U.S.

& Canada,” and (6) our properties, brands, or markets in our Caribbean and Latin America, Europe, Middle East and Africa, Greater China, and Asia Pacific excluding China regions, as “International.” In addition, references throughout to numbered “Notes” refer to these Notes to Condensed Consolidated Financial Statements, unless otherwise stated.

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Preparation of financial statements that conform with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities.

The uncertainty created by the coronavirus pandemic and efforts to contain it (“COVID-19”) has made such estimates more difficult and subjective.

The uncertainty created by the coronavirus pandemic (“COVID-19”) has made such estimates more difficult and subjective.

Accordingly, ultimate results could differ from those estimates.

The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of March 31, 2022 and December 31, 2021, the results of our operations for the three months ended March 31, 2022 and March 31, 2021, and cash flows for the three months ended March 31, 2022 and March 31, 2021.

The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2022 and December 31, 2021, the results of our operations for the three and six months ended June 30, 2022 and June 30, 2021, and cash flows for the six months ended June 30, 2022 and June 30, 2021.

Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations, as well as the impact of COVID-19.

2 unchanged sentences

The table below presents the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share:

Three Months Ended

(in millions, except per share amounts) March 31, 2022 March 31, 2021

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Computation of Basic Earnings Per Share

Net income (loss) $ 377 $ ( 11 )

Net income $ 678 $ 422 $ 1,055 $ 411

Shares for basic earnings per share 328.2 327.1 328.3 326.9

Basic earnings (loss) per share $ 1.15 $ ( 0.03 )

Basic earnings per share $ 2.06 $ 1.29 $ 3.21 $ 1.26

Computation of Diluted Earnings Per Share

Net income (loss) $ 377 $ ( 11 )

Net income $ 678 $ 422 $ 1,055 $ 411

Shares for basic earnings per share 328.2 327.1 328.3 326.9

2 unchanged sentences

Shares for diluted earnings per share 329.5 329.1 329.8 329.0

Diluted earnings (loss) per share $ 1.14 $ ( 0.03 )

(1) For the calculation of diluted loss per share for the three months ended March 31, 2021, we excluded stock-based compensation securities of 2.3 million because the effect was anti-dilutive.

Diluted earnings per share $ 2.06 $ 1.28 $ 3.20 $ 1.25

STOCK-BASED COMPENSATION

We granted 1.0 million restricted stock units (“RSUs”) during the 2022 first quarter to certain officers and employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date.

We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2022 first quarter to certain executives, which are earned, subject to continued employment and the satisfaction of certain performance and market conditions generally based on the degree of achievement of pre-established targets for 2024 adjusted EBITDA performance and relative total stockholder return over the 2022 to 2024 performance period.

RSUs, including PSUs, granted in the 2022 first quarter had a weighted average grant-date fair value of $ 169 per unit.

We recorded stock-based compensation expense for RSUs and PSUs of $ 42 million in the 2022 first quarter and $ 49 million in the 2021 first quarter.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 320 million at March 31, 2022 and $ 189 million at December 31, 2021.

We recorded a provision of $ 99 million with an effective tax rate of 20.7 percent for the 2022 first quarter and a benefit of $ 16 million with an effective tax rate of 59.2 percent for the 2021 first quarter.

The change in our effective tax rate was primarily due to a less favorable impact from stock-based compensation as a percentage of our pre-tax income in the 2022 first quarter compared to a percentage of our pre-tax loss in the 2021 first quarter.

We paid cash for income taxes, net of refunds, of $ 38 million in the 2022 first quarter and $ 33 million in the 2021 first quarter.

We granted 1.0 million restricted stock units (“RSUs”) during the 2022 first half to certain officers and employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date.

We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2022 first half to certain executives, which are earned, subject to continued employment and the satisfaction of certain performance and market conditions, generally based on the degree of achievement of pre-established targets for 2024 adjusted EBITDA performance and relative total stockholder return over the 2022 to 2024 performance period.

RSUs, including PSUs, granted in the 2022 first half had a weighted average grant-date fair value of $ 169 per unit.

We recorded stock-based compensation expense for RSUs and PSUs of $ 49 million in the 2022 second quarter, $ 41 million in the 2021 second quarter, $ 91 million in the 2022 first half, and $ 90 million in the 2021 first half.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 270 million at June 30, 2022 and $ 189 million at December 31, 2021.

Our effective tax rate was 22.8 percent for the 2022 second quarter compared to ( 10.9 ) percent for the 2021 second quarter, and 22.1 percent for the 2022 first half compared to ( 16.3 ) percent for the 2021 first half.

The changes in our effective tax rates were primarily due to the prior year tax benefit from the release of tax reserves due to the favorable resolution of Legacy-Starwood tax audits.

We paid cash for income taxes, net of refunds, of $ 125 million in the 2022 first half and $ 220 million in the 2021 first half.

COMMITMENTS AND CONTINGENCIES

We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at March 31, 2022 in the following table:

($ in millions)

9 unchanged sentences

If the owner exercises the put option, the closing is expected to occur in the 2024 fourth quarter, and we have the option to purchase, at the same time the put transaction closes, the fee simple interest in the underlying land for an additional $ 200 million in cash.

We account for the put option as a guarantee, and our recorded liability was $ 300 million at March 31, 2022 and December 31, 2021.

We account for the put option as a guarantee, and our recorded liability was $ 300 million at June 30, 2022 and December 31, 2021.

Starwood Data Security Incident

7 unchanged sentences

state and Canadian courts related to the incident.

All but one of the U.S.

cases were consolidated and transferred to the U.S.

The plaintiffs in the cases that remain pending, who generally purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief.

The active U.S.

cases are consolidated in the U.S.

District Court for the District of Maryland, pursuant to orders of the U.S.

Judicial Panel on Multidistrict Litigation (the “MDL”).

The plaintiffs in the U.S.

and Canadian cases, who generally purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief.

Among the U.S.

cases consolidated in the MDL proceeding was a putative class action lawsuit that was filed on December 1, 2018 against the Company and certain of our current and former officers and directors, alleging violations of the federal securities laws in connection with statements regarding our cybersecurity systems and controls, and seeking certification of a class of affected persons, unspecified monetary damages, costs and attorneys’ fees, and other related relief (the “Securities Case”).

We filed motions to dismiss in connection with all of the U.S.

Our motions to dismiss the Securities Case and three shareholder derivative complaints (two included in the MDL proceeding and one filed in the Delaware Court of Chancery) were granted in 2021.

The plaintiff in the Securities Case appealed the dismissal and the dismissal was affirmed by the U.S.

Court of Appeals for the Fourth Circuit in April 2022.

Motions to dismiss in the other MDL cases have been denied in part or in

whole and these cases remain at varying stages.

On May 3, 2022, the U.S.

District Court for the District of Maryland granted in part and denied in part class certification of various U.S.

groups of consumers and we are evaluating how to proceed.

groups of consumers.

We appealed the District Court’s decision, and on July 14, 2022, the U.S.

Court of Appeals for the Fourth Circuit granted our petition to appeal.

The Canadian cases have effectively been consolidated into a single case in the province of Ontario.

We dispute the allegations in the lawsuits described above and are vigorously defending against such claims.

In April 2019, we received a letter purportedly on behalf of a stockholder of the Company (also one of the named plaintiffs in the Securities Case described above) demanding that our Board of Directors take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and related claims arising from the Data Security Incident.

In October 2021, we received a letter purportedly on behalf of another stockholder of the Company (also one of the named plaintiffs in one of the dismissed MDL Derivative Cases described above) demanding that our Board of Directors take action against certain of the Company’s current and former officers and directors to recover damages for alleged breaches of fiduciary duties and other claims related to the Data Security Incident or associated disclosures.

The Board of Directors has constituted a demand review committee to investigate the claims made in these demand letters, and the committee has retained independent counsel to assist with the investigations.

The committee has completed its investigation and reported its findings and recommendations to our Board of Directors, which thereafter resolved, in February 2022, to reject the demands in their entirety.

In addition, on August 18, 2020, a purported representative action was brought against us in the High Court of Justice for England and Wales on behalf of an alleged claimant class of English and Welsh residents alleging breaches of the General Data Protection Regulation and/or the U.K.

Data Protection Act 2018 (the “U.K.

DPA”) in connection with the Data Security Incident.

On November 5, 2020, the court issued an order with the consent of all parties staying this action pending resolution of another case raising similar issues, but not involving the Company.

That other case was decided by the U.K.

Supreme Court on November 10, 2021.

The plaintiffs have informed us that they have decided not to pursue this case and the parties are in the process of preparing formal dismissal papers.

We dispute the allegations in these lawsuits and are vigorously defending against such claims.

On August 18, 2020, a purported representative action was brought against us in the High Court of Justice for England and Wales on behalf of an alleged claimant class of English and Welsh residents alleging breaches of the General Data Protection Regulation and/or the U.K.

Data Protection Act 2018 in connection with the Data Security Incident.

The plaintiffs informed us that they have decided not to pursue this case and the case was discontinued in May 2022.

In addition, numerous U.S.

federal, U.S.

state and foreign governmental authorities made inquiries, opened investigations, or requested information and/or documents related to the Data Security Incident and related matters, including Attorneys General offices from all 50 states and the District of Columbia, the Federal Trade Commission, the Securities and Exchange Commission, certain committees of the U.S.

Senate and House of Representatives, the Information Commissioner’s Office in the United Kingdom (the “ICO”) as lead supervisory authority in the European Economic Area, and regulatory authorities in various other jurisdictions.

With the exception of the ICO proceeding, which was resolved in October 2020, these matters generally remain open.

We are in discussions with the U.S.

state Attorneys General, the U.S.

Federal Trade Commission, and certain regulatory authorities in other jurisdictions to resolve their investigations and requests.

While we believe it is reasonably possible that we may incur additional losses associated with the above described proceedings and investigations related to the Data Security Incident, it is not possible to estimate the amount of loss or range of loss, if any, in excess of the amounts already incurred that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings and investigations based on the current stage of these proceedings and investigations, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and/or the lack of resolution of significant factual and legal issues.

state and foreign governmental authorities made inquiries, opened investigations, or requested information and/or documents related to the Data Security Incident and related matters.

Although some of these matters have been resolved or no longer appear to be active, some remain open.

We are in discussions with the Attorney General offices from 49 states and the District of Columbia, the Federal Trade Commission, and regulatory authorities in Canada and Australia to resolve their investigations and requests.

While we believe it is reasonably possible that we may incur additional losses associated with the above described MDL proceedings and regulatory investigations related to the Data Security Incident, it is not possible to reasonably estimate the amount of loss or range of loss, if any, in excess of the amounts already incurred that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings and investigations based on:

(i) in the case of the above described MDL proceedings, the current stage of these proceedings, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, and the lack of resolution of significant factual and legal issues;

and (ii) in the case of the above described regulatory investigations, the lack of resolution of significant factual and legal issues in our discussions with the Federal Trade Commission and the state Attorneys General.

LONG-TERM DEBT

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of March 31, 2022 and year-end 2021:

($ in millions) March 31,

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of June 30, 2022 and year-end 2021:

($ in millions) June 30,

2022 December 31,

Senior Notes:

Series L Notes, interest rate of 3.3 %, face amount of $ 173 , maturing September 15, 2022

Series L Notes, interest rate of 3.3 %, face amount of $ 173 , redeemed June 15, 2022

(effective interest rate of 3.4 %)

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$ 8,230 $ 9,333

We paid cash for interest, net of amounts capitalized, of $ 29 million in the 2022 first quarter and $ 38 million in the 2021 first quarter.

We paid cash for interest, net of amounts capitalized, of $ 179 million in the 2022 first half and $ 196 million in the 2021 first half.

In June 2022, we redeemed all $ 173 million aggregate principal amount of our outstanding Series L Notes due in September 2022.

We are party to a multicurrency revolving credit agreement (as amended, the “Credit Facility”) that provides for up to $ 4.5 billion of aggregate borrowings for general corporate needs, including working capital, capital expenditures, letters of credit, acquisitions, and to support our commercial paper program if and when we resume issuing commercial paper.

3 unchanged sentences

The Credit Facility expires on June 28, 2024.

In the 2022 first quarter, we made repayments of $ 250 million, reducing the total outstanding borrowings under the Credit Facility to $ 800 million as of March 31, 2022.

In April 2022, we repaid an additional $ 400 million of outstanding borrowings under the Credit Facility.

In July 2022, we repaid $ 275 million of outstanding borrowings under the Credit Facility.

We entered into amendments to the Credit Facility in April 2020 and January 2021 (the “Credit Facility Amendments”).

5 unchanged sentences

We present the carrying values and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments in the following table:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

($ in millions) Carrying Amount Fair Value Carrying Amount Fair Value

9 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE LOSS AND STOCKHOLDERS’ EQUITY

The following tables detail the accumulated other comprehensive loss activity for the 2022 first quarter and 2021 first quarter:

The following tables detail the accumulated other comprehensive loss activity for the 2022 first half and 2021 first half:

($ in millions) Foreign Currency Translation Adjustments Other Adjustments Accumulated Other Comprehensive Loss

1 unchanged sentence

Other comprehensive income before reclassifications (1)

( 313 ) 5 ( 308 )

Reclassification adjustments — ( 1 ) ( 1 )

Net other comprehensive income ( 313 ) 4 ( 309 )

Balance at March 31, 2022 $ ( 337 ) $ 9 $ ( 328 )

Balance at June 30, 2022 $ ( 664 ) $ 13 $ ( 651 )

($ in millions) Foreign Currency Translation Adjustments Other Adjustments Accumulated Other Comprehensive Loss

4 unchanged sentences

Net other comprehensive loss ( 59 ) — ( 59 )

Balance at March 31, 2021 $ ( 294 ) $ 4 $ ( 290 )

(1) Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in gains of $ 12 million for the 2022 first quarter and $ 27 million for the 2021 first quarter.

The following tables detail the changes in common shares outstanding and stockholders’ equity for the 2022 first quarter and 2021 first quarter:

Balance at June 30, 2021 $ ( 198 ) $ 4 $ ( 194 )

(1) Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in gains of $ 44 million for the 2022 first half and $ 18 million for the 2021 first half.

The following tables detail the changes in common shares outstanding and stockholders’ equity for the 2022 first half and 2021 first half:

(in millions, except per share amounts)

6 unchanged sentences

$ 1,772 $ 5 $ 5,831 $ 10,682 $ ( 14,418 ) $ ( 328 )

— Net income 678 — — 678 — —

— Other comprehensive loss ( 323 ) — — — — ( 323 )

— Dividends ($ 0.30 per share)

( 98 ) — — ( 98 ) — —

— Stock-based compensation plans 43 — 41 — 2 —

( 1.9 ) Purchase of treasury stock ( 300 ) — — — ( 300 ) —

325.4 Balance at June 30, 2022

$ 1,772 $ 5 $ 5,872 $ 11,262 $ ( 14,716 ) $ ( 651 )

Outstanding Total Class A Common Stock Additional Paid-in-Capital Retained Earnings Treasury Stock, at Cost Accumulated Other Comprehensive Loss

5 unchanged sentences

$ 234 $ 5 $ 5,787 $ 9,195 $ ( 14,463 ) $ ( 290 )

— Net income 422 — — 422 — —

— Other comprehensive income 96 — — — — 96

— Stock-based compensation plans 44 — 43 1 — —

325.6 Balance at June 30, 2021

$ 796 $ 5 $ 5,830 $ 9,618 $ ( 14,463 ) $ ( 194 )

CONTRACTS WITH CUSTOMERS

Our current and noncurrent liability for guest loyalty program increased by $ 118 million, to $ 6,589 million at March 31, 2022, from $ 6,471 million at December 31, 2021, primarily reflecting an increase in points earned by members.

Our current and noncurrent liability for guest loyalty program increased by $ 173 million, to $ 6,644 million at June 30, 2022, from $ 6,471 million at December 31, 2021, primarily reflecting an increase in points earned by members.

This includes a $ 128 million reclassification from deferred revenue to the liability for guest loyalty program primarily due to points that were earned during the period by members using our U.S.-issued co-brand credit cards, which were prepaid by the financial institutions in 2020.

The increase was partially offset by $ 567 million of revenue recognized in the 2022 first quarter, that was deferred as of December 31, 2021.

The increase was partially offset by $ 1,324 million of revenue recognized in the 2022 first half, that was deferred as of December 31, 2021.

The current portion of our liability for guest loyalty program increased compared to December 31, 2021, due to higher estimated redemptions in the short-term.

Current and noncurrent deferred revenue decreased by $ 73 million, to $ 1,454 million at March 31, 2022, from $ 1,527 million at December 31, 2021, primarily as a result of $ 92 million of revenue recognized in the 2022 first quarter that was deferred as of December 31, 2021, as well as the reclassification from deferred revenue to the liability for guest loyalty program, which we discuss above .

Current and noncurrent deferred revenue decreased by $ 138 million, to $ 1,389 million at June 30, 2022, from $ 1,527 million at December 31, 2021, primarily as a result of $ 186 million of revenue recognized in the 2022 first half that was deferred as of December 31, 2021, as well as the reclassification from deferred revenue to the liability for guest loyalty program, which we discuss above .

The decrease was partially offset by deferred cash received related to our co-brand credit cards and gift cards, as well as an increase in franchise application and relicensing fees.

Our current deferred revenue, which we present in the “Accrued expenses and other” caption of our Balance Sheets, was $ 333 million at March 31, 2022 and $ 346 million at year-end 2021.

Our allowance for credit losses increased to $ 200 million at March 31, 2022 from $ 187 million at December 31, 2021, primarily reflecting our provision for credit losses.

Our provision for credit losses totaled $ 19 million in the 2022 first quarter.

Our allowance for credit losses increased to $ 212 million at June 30, 2022 from $ 187 million at December 31, 2021, primarily reflecting our provision for credit losses.

Our provision for credit losses totaled $ 14 million in the 2022 second quarter and $ 33 million in the 2022 first half.

BUSINESS SEGMENTS

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Segment Revenues

The following table presents our revenues disaggregated by segment and major revenue stream for the 2022 first quarter and 2021 first quarter:

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

The following tables present our revenues disaggregated by segment and major revenue stream for the 2022 second quarter, 2021 second quarter, 2022 first half, and 2021 first half:

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

($ in millions) U.S.

10 unchanged sentences

$ 5,338 $ 3,149

Segment Profit and Loss

Three Months Ended

($ in millions) March 31, 2022 March 31, 2021

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

($ in millions) U.S.

& Canada International Total U.S.

& Canada International Total

Gross fee revenues $ 1,172 $ 389 $ 1,561 $ 623 $ 219 $ 842

Contract investment amortization ( 29 ) ( 14 ) ( 43 ) ( 26 ) ( 9 ) ( 35 )

Net fee revenues 1,143 375 1,518 597 210 807

Owned, leased, and other revenue 216 370 586 92 186 278

Cost reimbursement revenue 6,029 805 6,834 3,360 517 3,877

Total reportable segment revenue $ 7,388 $ 1,550 $ 8,938 $ 4,049 $ 913 $ 4,962

Unallocated corporate and other

Total revenue

$ 9,537 $ 5,465

Segment Profit

Three Months Ended Six Months Ended

($ in millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

& Canada $ 727 $ 344 $ 1,181 $ 487

1 unchanged sentence

Unallocated corporate and other

( 21 ) ( 47 )

Interest expense, net of interest income ( 89 ) ( 102 ) ( 177 ) ( 202 )

(Provision) benefit for income taxes ( 200 ) 41 ( 299 ) 57

Net income (loss) $ 377 $ ( 11 )

Net income $ 678 $ 422 $ 1,055 $ 411

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements