Financial Information

PART II

Item 8. Financial Statements and Supplementary Data.

MARRIOTT INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. PROPERTY AND EQUIPMENT

The following table presents the composition of our property and equipment balances at year-end 2016 and 2015:

We record property and equipment at cost, including interest and real estate taxes we incur during development and construction. Interest we capitalized as a cost of property and equipment totaled $1 million in 2016, $9 million in 2015, and $33 million in 2014. We capitalize the cost of improvements that extend the useful life of property and equipment when we incur them. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. We expense all repair and maintenance costs when we incur them. We compute depreciation using the straight-line method over the estimated useful lives of the assets (generally three to 40 years), and we amortize leasehold improvements over the shorter of the asset life or lease term. Our gross depreciation expense totaled $157 million in 2016, $132 million in 2015, and $135 million in 2014 (of which $76 million in 2016, $58 million in 2015, and $51 million in 2014 we included in reimbursed costs). Fixed assets attributed to operations located outside the United States were $1,000 million in 2016 and $229 million in 2015.