XML 54 R29.htm IDEA: XBRL DOCUMENT v2.4.1.9
INCOME TAXES (Tables)
 12 Months Ended
Jan. 02, 2015
Income Tax Disclosure [Abstract]  
Income (Loss) Before Provision for Income Taxes by Geographic Region

The income (loss) before provision for income taxes by geographic region is as follows:

 

($ in millions)   2014     2013     2012  

United States

   $ 179      $         125      $         44  

Non-U.S. jurisdictions

           (28)        6        (13 ) 
 

 

 

    

 

 

    

 

 

  
$ 151    $ 131    $ 31  
 

 

 

    

 

 

    

 

 

  

 
Provision for Income Taxes

Our provision for income taxes consists of:

 

($ in millions)   2014     2013     2012  

Current – U.S. Federal

   $ (43)      $         (37)      $         (61)   

– U.S. State

     (9)        (5)        (9)   

– Non-U.S.

     —        (2)        (4)   
 

 

 

    

 

 

    

 

 

  
  (52)      (44)      (74)   
 

 

 

    

 

 

    

 

 

  

Deferred – U.S. Federal

         (16)      (5)      43  

– U.S. State

   1      (1)      6  

– Non-U.S.

   (3)      (1)      1  
 

 

 

    

 

 

    

 

 

  
  (18)      (7)      50  
 

 

 

    

 

 

    

 

 

  
$ (70)    $ (51)    $ (24)   
 

 

 

    

 

 

    

 

 

  

 
Reconciliation of Unrecognized Tax Benefit

The following table reconciles our unrecognized tax benefit balance for each year from the beginning of 2012 to the end of 2014:

 

($ in millions)   2014     2013     2012  

Unrecognized tax benefit at beginning of year

   $          —     $          —     $         2  

Change attributable to tax positions taken during a prior period

     1       —       —   

Decrease attributable to settlements with taxing authorities

     —       —       (2 ) 
 

 

 

    

 

 

    

 

 

  

Unrecognized tax benefit at end of year

 $ 1   $ —   $  —   
 

 

 

    

 

 

    

 

 

  
Deferred Tax Assets and Liabilities

Total deferred tax assets and liabilities at January 2, 2015 and January 3, 2014 were as follows:

 

($ in millions)   At Year-End
2014		     At Year-End
2013		  

Deferred tax assets

   $ 167      $         153  

Deferred tax liabilities

           (246)        (213 ) 
 

 

 

    

 

 

  

Net deferred tax liability

 $ (79 )  $ (60 ) 
 

 

 

    

 

 

  

 

The tax effect of each type of temporary difference and carry-forward that gives rise to a significant portion of our deferred tax assets and liabilities at January 2, 2015 and January 3, 2014 was as follows:

 

($ in millions)   At Year-End
2014		     At Year-End
2013		  

Inventory

     (24)      $ (28 ) 

Reserves

     35       26  

Property and equipment

     (9)        (20 ) 

Marriott Rewards customer loyalty program

     17       15  

Deferred sales of vacation ownership interests

             (160 )              (109 ) 

Long lived intangible assets

     29        35  

Net operating loss carry-forwards

     44        50  

Other, net

     39        28  
 

 

 

    

 

 

  

Deferred tax liability

   (29 )    (3 ) 

Less: Valuation allowance

   (50 )    (57 ) 
 

 

 

    

 

 

  

Net deferred tax liability

 $ (79 )  $ (60 ) 
 

 

 

    

 

 

  

 
Reconciliation of US Statutory Income Tax Rate to Effective Tax Rate

The following table reconciles the expense related to the U.S. statutory income tax rate to our effective income tax rate:

 

              2014                         2013                         2012            

U.S. statutory income tax rate expense

     35.00 %      35.00 %      35.00 % 

U.S. state income taxes, net of U.S. federal tax benefit

     2.96       3.48       4.63  

Permanent differences(1)

     0.18        0.24       10.73  

Non-U.S. income(2)

     6.27        0.97       7.26  

Other items

     0.17        (2.28 )     5.41  

Change in valuation allowance(3)

     1.79        1.82       17.05  
 

 

 

    

 

 

    

 

 

  

Effective rate expense

   46.37 %    39.23 %    80.08 % 
 

 

 

    

 

 

    

 

 

  

 

(1)  For 2014 and 2013, attributed to interest on mandatorily redeemable preferred stock of a consolidated subsidiary. For 2012, attributed to interest on mandatorily redeemable preferred stock of a consolidated subsidiary and foreign income subject to U.S. tax.

 

(2)  Attributed to the difference between U.S. and foreign income tax rates, partially offset by the benefit of tax holidays in certain jurisdictions.

 

(3)  Attributed to establishment of valuation allowances in foreign jurisdictions for losses that cannot be benefited in the U.S. income tax provision as discussed above.