Financial Information

PART I

Item 1A. Risk Factors.

Risks Relating to Our Integration of Starwood

Some of the anticipated benefits of combining Starwood and Marriott may still not be realized and challenges related to our integration efforts could have adverse effects on our business. Although we have achieved substantial benefits from the Starwood Combination, we cannot assure you when or that we will be able to fully realize additional benefits that we anticipated when we decided to acquire Starwood, including enhancing revenues or achieving other operating efficiencies or cost savings. We also cannot assure you that challenges we encountered with the harmonization of our systems, our Loyalty Program, and other business practices (some of which still place a significant burden on our management and internal resources) will not have significant adverse effects on our business or reputation.

Program changes associated with our integration efforts could have a negative effect on guest preference or behavior. Our integration efforts involved significant changes to certain of our guest programs and services, including our Loyalty Program, co-brand credit card arrangements, and consumer-facing technology platforms and services. While we believe such changes enhance these programs and services for our guests and will drive guest preference and satisfaction, these changes remain subject to various uncertainties, including whether the changes could be negatively perceived by certain guests and consumers, could affect guest preference or could alter reservation, spending or other guest or consumer behavior, all of which could adversely affect our market share, reputation, business, financial condition, or results of operations.