MARRIOTT INTERNATIONAL INC MD

NOTE 3. ACQUISITION

In the 2024 fourth quarter, we completed the asset acquisition of the Sheraton Grand Chicago hotel and the fee simple interest in the land underlying the hotel for a purchase price of $514 million, including direct transaction costs. This acquisition is the result of a 2017 transaction in which we granted the owner a one-time right to require us to purchase the leasehold interest in the land and the hotel for $300 million in cash (the “put option”), which we previously accounted for as a guarantee liability. In January 2024, the owner exercised the put option, and at the same time the put transaction closed, we exercised our option to purchase the fee simple interest in the underlying land for an additional $200 million in cash. We determined that the capitalizable value of the acquired assets was $214 million on the acquisition date. We estimated the fair value of the hotel and land using a combination of two income approaches, which included Level 3 inputs such as forecasted future net cash flows, property resale value, and discount rates. We recorded the acquired assets in the Property and equipment, net caption of our Balance Sheets and applied the remaining $300 million of the purchase price to the release of the guarantee liability.