Financial Information

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Financing Activities Cash Flows

Debt. Debt increased by $1,593 million in 2019, to $10,940 million at year-end 2019 from $9,347 million at year-end 2018, primarily due to the issuance of our Series BB, CC and DD Notes and higher outstanding commercial paper borrowings ($951 million), partially offset by the maturity of our Series K Notes ($600 million) and Series T Notes ($181 million). See Note 9 for additional information on the debt issuances.

Our financial objectives include diversifying our financing sources, optimizing the mix and maturity of our long-term debt, and reducing our working capital. At year-end 2019, our long-term debt had a weighted average interest rate of 2.9 percent and a weighted average maturity of approximately 4.7 years. The ratio of our fixed-rate long-term debt to our total long-term debt was 0.5 to 1.0 at year-end 2019.

See the “Cash Requirements and Our Credit Facility,” caption in this “Liquidity and Capital Resources” section for more information on our Credit Facility.

Share Repurchases. We purchased 17.3 million shares of our common stock in 2019 at an average price of $130.79 per share, 21.5 million shares in 2018 at an average price of $130.67 per share, and 29.2 million shares in 2017 at an average price of $103.66 per share. At year-end 2019, 18.4 million shares remained available for repurchase under Board approved authorizations. For additional information, see “Fourth Quarter 2019 Issuer Purchases of Equity Securities” in Part II, Item 5.

Dividends. Our Board of Directors declared the following quarterly cash dividends in 2019: (1) $0.41 per share declared on February 15, 2019 and paid March 29, 2019 to shareholders of record on March 1, 2019, (2) $0.48 per share declared on May 10, 2019 and paid June 28, 2019 to shareholders of record on May 24, 2019, (3) $0.48 per share declared on August 8, 2019 and paid September 30, 2019 to shareholders of record on August 22, 2019, and (4) $0.48 per share declared on November 7, 2019 and paid December 31, 2019 to shareholders of record on November 21, 2019. Our Board of Directors declared a cash dividend of $0.48 per share on February 14, 2020, payable on March 31, 2020 to shareholders of record on February 28, 2020.

Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations

The following table summarizes our contractual obligations at year-end 2019:

Financial Table

(1)  Includes principal as well as interest payments.

The preceding table does not reflect projected Transition Tax payments totaling $447 million as a result of the 2017 Tax Act at year-end 2019. In addition, the table does not reflect unrecognized tax benefits at year-end 2019 of $570 million.

In addition to the purchase obligations noted in the preceding table, in the normal course of business we enter into purchase commitments to manage the daily operating needs of the hotels that we manage. Since we are reimbursed from the cash flows of the hotels, these obligations have minimal impact on our net income and cash flow.

Other Commitments

The following table summarizes our guarantee, investment, and loan commitments at year-end 2019:

Financial Table

In conjunction with financing obtained for specific projects or properties owned by joint ventures in which we are a party, we may provide industry standard indemnifications to the lender for loss, liability, or damage occurring as a result of our actions or the actions of the other joint venture owner.

In addition, we granted a hotel owner a one-time right to require us to purchase the leasehold interest in the land and hotel for $300 million in cash, exercisable in 2022. See Note 7 for more information.

For further information, including the nature of the commitments and their expirations, see the “Commitments” caption in Note 7.

Letters of Credit

At year-end 2019, we had $145 million of letters of credit outstanding (all outside the Credit Facility, as defined in Note 9), most of which were for our self-insurance programs. Surety bonds issued as of year-end 2019 totaled $160 million, most of which state governments requested in connection with our self-insurance programs.