HOT Starwood Hotels & Resorts Worldwide, Inc.

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

The following description of the Starwood Hotels & Resorts Worldwide Savings and Retirement Plan (the “Plan”), provides only general information. Employees participating in the Plan (Participants) should refer to the Summary Plan Description and the formal Plan document for a more complete description of the Plan’s provisions. The Plan was originally established effective April 1, 1997.

The Plan is sponsored by Starwood Hotels and Resorts Worldwide, LLC (“Starwood” or the “Company”). Effective September 23, 2016, Starwood became a wholly-owned subsidiary of Marriott International, Inc. (“Marriott”). Prior to September 23, 2016, Starwood was named Starwood Hotels and Resorts Worldwide, Inc. and the Plan was named Starwood Hotels & Resorts Worldwide, Inc. Savings and Retirement Plan.

General

The Plan is a defined contribution plan that qualifies under Section 401(a) of the Internal Revenue Code (the Code) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. The Plan provides for employee pre-tax contributions and matching employer contributions in accordance with Section 401(k) and 401(m) of the Code. The Plan’s assets are held in a trust (Trust) pursuant to a trust agreement with the Company and State Street Bank and Trust Company (“State Street”).

Eligibility

Company employees become eligible to participate in the Plan when they are 21 years of age and have completed an hour of service. The Company begins to match contributions once the Participant has completed one “year of service” as that term is defined by the Plan.

Administration

Effective September 23, 2016, the Profit Sharing Committee serves as the named fiduciary of the Plan. The Profit Sharing Committee has appointed a Plan Administrator, who is an employee of Marriott. The Profit Sharing Committee, all of whom are members of senior management of Marriott, is responsible for investment of the Plan assets, other than the Company Stock Fund, and has delegated many responsibilities to the investment managers it appoints. Effective September 23, 2016, the Marriott Stock Fund Investment Committee is the sole named fiduciary of the Plan with regards to the investment of the Company Stock Fund. Prior to September 23, 2016, Starwood was the Plan Administrator and the named fiduciary of the Plan, and had delegated its duties to the Starwood Global Benefits Committee.  

Contributions

Participants may contribute up to 50% of eligible compensation on a pre-tax basis, subject to the Internal Revenue Service limitation of $18,000 for the year ended December 31, 2016. The Company makes a matching contribution in an amount equal to 100% for Participant contributions up to 1% of eligible compensation and 50% for Participant contributions between 2% and 7% of eligible compensation. Participants direct the investment of their contributions and the Company’s matching contributions into various investment options offered by the Plan. Participants can make changes to their investment options daily.

Participants who are age 50 or older by the end of the applicable Plan year and have contributed the maximum pre-tax contributions allowable by the Plan during the Plan year may make an additional pre-tax catch-up contribution. The catch-up contribution is subject to the Internal Revenue Service limitation of $6,000 for the year ended December 31, 2016.

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

Participants who do not enroll on their own and who do not opt out are automatically enrolled after 90 days, pursuant to the safe harbor for automatic contribution arrangements in Code Section 401(k) (13). The initial contribution rate for those who are auto-enrolled is 3% of eligible compensation. The 3% contribution rate increases by one percentage point each year to a maximum of 6% of eligible compensation. Participants are free to elect out of automatic enrollment at any time.

Vesting

Participants are immediately vested in their voluntary contributions and earnings thereon. Participants become 100% vested in the Company’s matching contributions and earnings thereon after two years of service.

Rollovers to the Plan

Participants may roll over to the Plan their qualifying balance from any rollover account permitted for this purpose (e.g., the trust of a qualified plan, an individual retirement account (IRA) or an individual retirement annuity) (rollover account) provided they do so no later than the 60 ^th day following the day on which the Participant receives the distribution from such rollover account.

Participants’ accounts

Separate accounts are maintained with respect to each Participant’s pre-tax contributions, employer matching contributions, and rollover contributions. Each Participant’s account is credited with the Participant’s contributions and share of investment earnings or losses and is charged with the Participant’s share of Plan expenses. Allocations of Plan earnings and losses and of investment expenses are based on the proportion of each Participant’s account balance to the total of all account balances for each investment type. Administrative expenses are allocated as described below. Plan expenses and fees are explained in detail in a mailing sent to Participants annually. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Notes receivable from Participants (Plan loans)

Participants may borrow from the vested portion of their accounts. The minimum loan amount is $1,000, restricted to 50% of the Participant’s vested account balance. The maximum loan amount is the lesser of $50,000 or 50% of the Participant’s vested account balance, reduced by any outstanding loan balance in the prior year. A Participant may have no more than two loans outstanding at one time. The repayment period may not exceed five years from the date of the loan (ten years if the loan proceeds are used to acquire the Participant’s principal residence). The loans are collateralized by the balance in the Participant’s account at the time the loan is made. The loans bear interest at a fixed rate equal to the prime interest rate as of the first business day of the month when the loan was issued, plus 1%.

Notes receivable from Participants are measured at their unpaid principal balance plus accrued interest.

Payment of benefits

Participants are eligible for distribution of vested benefits upon retirement, death, disability or termination of employment. Participants may elect to receive a lump-sum amount or, subject to certain conditions, equal monthly or annual installments over a period not greater than 20 years. Participants may also elect to defer distributions, but in no event beyond April 1 of the year following the year in which the Participant turns 70  ¹ / ₂ .

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

Withdrawals of a Participant’s vested benefits are also permitted upon attainment of age 59  ¹ / ₂ or, subject to Plan provisions, as a hardship distribution.

Participants leaving the Plan may roll over the qualifying portion of their distributions to a qualifying rollover account. If a terminating participant who has an account balance of between $1,000 and $5,000 does not take a distribution upon termination, the Plan automatically rolls over the Participant’s account balance to a qualified IRA in the Participant’s name. If a terminating participant with an account balance of under $1,000 does not elect to take a distribution upon termination, the Plan automatically distributes the account balance to the Participant.

Forfeitures

Forfeitures of nonvested Company contributions are applied to reduce future Company contributions. Unallocated forfeited nonvested accounts totaled $44,966 and $285,353 as of December 31, 2016 and 2015 respectively. During the years ended December 31, 2016 and 2015, forfeited nonvested accounts reduced Company contributions by $543,275 and $313,196, respectively.

Administrative expenses

Administrative expenses, including investment management and recordkeeping fees, are paid from Plan assets, except to the extent the Company pays such expenses. For the year ended December 31, 2016, recordkeeping fees and participant–level investment advisor services were paid directly from Participant accounts. Other administrative expenses were paid by the Plan other than legal and audit fees, which were paid by the Company. The Plan imposes fees that are deducted directly from Participant accounts for initiating Plan loans ($75), processing domestic relations orders ($450), hardship distributions ($50), and overnight mailings ($50). Participants who elect to work with a Professional Account Manager through the Voya Advisor Service pay a fee that is a percentage of their account balance, and that is deducted directly from their accounts.

Changes in employer contributions and termination of the Plan

Although it has not expressed any intent to do so, the Company has the right under the Plan to suspend, reduce, or partially or completely discontinue Company contributions at any time and to terminate the Plan, the trust agreement, and the trust thereunder, subject to the provisions of ERISA. In the event of Plan termination, partial termination or complete discontinuance of contributions, affected Participants may have the right to become fully vested in the Company contributions and to receive a full distribution of such amounts to the extent required under applicable law and the terms of the Plan document.

Basis of presentation

The Financial Accounting Standards Board (FASB) sets accounting principles generally accepted in the United States of America (GAAP) to ensure consistent reporting. References to GAAP issued by the FASB in the accompanying notes are to the FASB Accounting Standards Codification (FASB ASC).

The accompanying financial statements have been prepared on the accrual basis of accounting. Accordingly, income is recognized when earned and expenses are recorded when incurred.

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and net assets and the reported amount of additions to and deductions from net assets. Actual results could differ from those estimates.

Concentration of credit risk and market risk

The Plan provides for various investment fund options, which in turn invest in any combination of stocks, bonds and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. The Plan’s risk of credit loss is limited to the carrying value of the investments. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect Participants’ account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.

New Accounting Pronouncement

In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820), Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent ). The amendments in ASU 2015-07 apply to reporting entities that measure an investment’s fair value using the net asset value per share (or its equivalent) practical expedient. The ASU eliminates the requirement to classify the investment within the fair value hierarchy. In addition, the requirement to make certain disclosures for all investments eligible to be assessed at fair value with the net asset value per share practical expedient has been removed. Instead, such disclosures are restricted only to investments that the entity has elected to measure using the practical expedient. These investments should be disclosed as a reconciling item between the amounts reported in the fair value hierarchy table and the balance sheet. If an investment is measured using the net asset value per share as a practical expedient and that investment is in a fund that files a Form 5500, as a direct filing entity (“DFE”), disclosure of that investment’s strategy will no longer be required. The table showing the unfunded commitment, redemption frequency and redemption notice period is still required. The Plan adopted ASU 2015-07 for the plan year ended December 31, 2016.

Subsequent events

In preparing these financial statements, management has evaluated subsequent events through June 23, 2017, the date the Plan financial statements were issued.

Fair value measurements

FASB ASC 820, Fair Value Measurements and Disclosures, establishes a common definition for fair value, establishes a framework for measuring fair value, and expands disclosures about such fair value measurements. It also establishes a hierarchy for ranking the quality and reliability of the information used to determine fair value by requiring that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

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The investment’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for investments measured at fair value.

Money Market Fund: Valued at cost, which approximates fair value.

Collective Trusts: Investments in common/collective trusts are valued at unit value, which is based on the aggregate current fair values of the underlying assets in relation to the total number of units outstanding. Unit value, or the equivalent of net asset value, is a practical expedient for estimating the fair values of those investments. The common collective trusts have no unfunded commitments as of December 31, 2016 and 2015, and can be redeemed daily with no redemption notice period or other redemption restrictions.

Mutual Funds: Valued using quoted market prices in active markets.

Marriott or Starwood Common Stock: Valued using quoted market prices in active markets.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair value. Furthermore, while management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in different fair value measurements at the reporting date.

Benefits paid to Participants

Benefits paid to Participants are recorded in the period in which they are paid.

Assets transferred to other plans, net

If a Participant transfers employment between Starwood and an employer who (i) has a business relationship with Starwood (but is not in the Starwood controlled group within the meaning of Code section 414) and (ii) sponsors an unrelated individually-designed retirement plan designated by Starwood, the Participant’s account balance is automatically transferred to the retirement plan sponsored by the receiving employer.

In May 2016, Starwood completed the spin-off of its vacation ownership business, Vistana Signature Experiences, Inc. (Vistana). As a result of the transaction, plan assets of $139,596,977 that were associated with Participants included in the spin-off were transferred out of the Plan. These transfers are included in the assets transferred to other plans, net line item.

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2016:

The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2015:

The Plan received a favorable determination letter from the Internal Revenue Service (“IRS”) dated August 13, 2015. The determination letter was applicable for amendments adopted by the Plan through December 16, 2014. The Plan is required to operate in conformity with the Code to maintain its qualification. Although the Plan has been amended since receiving the determination letter, the Plan Administrator believes that the Plan is designed and operating in compliance with the applicable requirements of the Code and that the Plan was qualified and the related trust was tax-exempt as of December 31, 2016.

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS

December 31, 2016 and 2015

Certain Plan investments are held in funds managed by State Street. In addition, certain Plan investments are in Marriott common stock.

For the year ended December 31, 2016, the fee incurred by the Plan for the investment management services was $226,421. The fee incurred by the Plan for record-keeper services and participant paid account management services was amounted to $3,696,948. As of December 31, 2016, and 2015, there were no record-keeping fees included in accrued expenses.

The following is a reconciliation of the net assets available for benefits from the financial statements to the Form 5500 at December 31:

The following is a reconciliation of benefits paid to Participants as reported in the financial statements for the year ended December 31, 2016 to Form 5500:

The following is a reconciliation of notes receivable from participants from the financial statements to the Form 5500 at December 31, 2016:

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STARWOOD HOTELS & RESORTS WORLDWIDE

SAVINGS AND RETIREMENT PLAN

EIN #52-1193298

Plan #001

Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)

December 31, 2016