HOST MARRIOTT CORPORATION
Consolidated Balance Sheets (a)
(unaudited, in millions, except
share amounts)
March 28, December 31,
2003
2002
ASSETS
$ 6,973 $
7,031
Property and
equipment, net
53
53
Notes and other
receivables
91
82
Due from managers
127
133
Investments
in affiliates
503
523
Other assets
130
133
Restricted cash
313
361
Cash and cash
equivalents
$ 8,190 $
8,316
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt
$ 3,236 $
3,247
Senior
notes
2,263
2,289
Mortgage
debt
102
102
Other
5,601
5,638
Accounts payable
and accrued expenses
109
118
Other liabilities
210
252
Total liabilities
5,920
6,008
Minority interest
220
223
Company-obligated
mandatorily redeemable
convertible
preferred securities of a
subsidiary
whose sole assets are
convertible
subordinated debentures due
2026 ("Convertible
Preferred Securities")
475
475
Shareholders'
equity
Cumulative redeemable
preferred stock
(liquidation
preference $354 million),
50 million
shares authorized; 14.1
million
shares issued and outstanding
339
339
Common stock,
par value $.01, 750 million
shares
authorized; 264.5 million shares
and 263.7
million shares issued and
outstanding,
respectively
3
3
Additional paid-in
capital
2,100
2,100
Accumulated
other comprehensive
income
(loss)
6
(2)
Accumulated
deficit
(873)
(830)
Total shareholders'
equity
1,575
1,610
$ 8,190 $
8,316
(a) Our consolidated
balance sheet as of March 28, 2003 has been prepared without audit.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with GAAP have been omitted. The
consolidated balance sheets should be read in conjunction with the consolidated
financial statements and notes thereto included in the annual report on
Form 10-K for the year ended December 31, 2002.
HOST MARRIOTT CORPORATION Consolidated Statements of Operations (a) (unaudited,
in millions, except per share amounts)
Quarter ended
March 28, March 22,
Revenues
2003
2002
Rooms
$ 472
$ 464
Food and
beverage
252
242
Other
52
55
Total hotel sales
776
761
Rental
income (b)
27
26
Other
income
2
-
Total revenues
805
787
Expenses
Rooms
116
110
Food and
beverage
187
175
Hotel
departmental expenses
215
195
Management
fees
33
36
Other
property-level expenses (b)
71
62
Depreciation
and amortization
88
83
Corporate
and other expenses
14
17
Operating profit
81
109
Minority
interest income (expense)
1
(5)
Interest
income
3
3
Interest
expense
(111)
(105)
Net gains
on property transactions
1
1
Equity
in losses of affiliates
(6)
(4)
Dividends
on Convertible Preferred
Securities
(7)
(7)
Loss before income
taxes
(38)
(8)
Benefit from
(provision for) income taxes
4
(4)
Loss from continuing
operations
(34)
(12)
Income from
discontinued operations (c)
-
13
Net income (loss)
(34)
1
Less: preferred
dividends
(9)
(9)
Net loss available
to common shareholders $ (43)
$ (8)
Basic and diluted
loss per common share $ (0.16)
$ (0.03)
(a) Our consolidated
statements of operations have been prepared without audit. Certain
information and footnote disclosures normally included in financial statements
presented in accordance with GAAP have been omitted. The unaudited
consolidated statements of operations should be read in conjunction with
the consolidated financial statements and notes thereto included in our
annual report on Form 10-K for the year ended December 31, 2002.
(b) Rental income
and expense are as follows:
Quarter ended
March 28, 2003 March 22, 2002
Rental Income
Full-service
$ 10
$ 10
Limited
service
16
15
Office
buildings
1
1
$ 27
$ 26
Rental and Other
Expenses (included
in "Other
property-level expenses")
Full-service
$ 1
$ 1
Limited
service
16
16
Office
buildings
1
-
$ 18
$ 17
(c) We adopted
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," effective January 1, 2002. Gains and losses from all subsequent
sales of real estate, as well as any income or loss from the property prior
to disposal, are required to be recorded as discontinued operations. As
a result, we have restated prior year periods to reflect operations of
the Ontario Airport Marriott, which we sold during the first quarter of
2003 as discontinued operations. The $13 million of discontinued
operations in the first quarter of 2002 primarily relate to the St. Louis
Marriott Pavilion which we disposed of in January 2002.
HOST MARRIOTT CORPORATION
Earnings per Share (a)
(unaudited, in millions, except per share amounts)
Quarter ended Quarter
ended
March 28, 2003 March 22,
2002
Per
Per
Income Shares Share Income Shares Share
Amount
Amount
Net income (loss)
$(34) 264.3 $(0.13) $1 263.5
$ -
Dividends on
preferred stock (9) -
(0.03) (9) - (0.03)
Basic and diluted
loss $(43) 264.3
$(0.16) $(8) 263.5 $(0.03)
(a) Basic earnings
per common share is computed by dividing net income (loss) available to
common shareholders by the weighted average number of shares of common
stock outstanding. Diluted earnings (loss) per common share is computed
by dividing net income (loss) available to common shareholders as adjusted
for potentially dilutive securities, by the weighted average number of
shares of common stock outstanding plus other potentially dilutive securities.
Dilutive securities may include shares granted under comprehensive stock
plans, those preferred OP Units held by minority partners, other minority
interests that have the option to convert their limited partnership interests
to common OP Units and the Convertible Preferred Securities. All securities
were anti-dilutive for all periods presented.
HOST MARRIOTT CORPORATION
Reconciliation of Net Loss to Comparative Funds From Operations
(unaudited, in millions, except per share basis)
Quarter ended Quarter ended
March 28, 2003 March 22, 2002 (a)
Per
Per
Income Shares Share Income Shares Share
Amount
Amount Net loss available to common shareholders
$(43) 264.3 (0.16) $(8) 263.5 (0.03)
Adjustments
to net loss:
Loss from
discontinued operations -
- - (13)
- (0.05)
Depreciation
and amortization 86
- 0.33 83 -
0.32
Partnership
adjustments
3 - 0.01
6 - 0.02
Tax benefit
of lease repurchase(b) 3 -
0.01 3 -
0.01
Comparative
Funds From Operations of minority partners of Host LP(c) (5)
- (0.02) (6) - (0.02)
Adjustments
to dilutive share
count:(d)
Assuming
distributions of common
shares granted under the
comprehensive stock plan less
shares assumed purchased at
average market price
- 2.5 (0.01) -
3.1 (0.01)
Assuming
conversion of Convertible
Preferred Securities
- - -
7 30.9 -
Diluted Comparative
Funds From
Operations(e)
$44 266.8 0.16 $72 297.5
0.24
(a) In accordance
with the Securities and Exchange Commission guidance under Staff Accounting
Bulletin 101, "Revenue Recognition in Financial Statements," we do not
recognize contingent rent as a component of net income until all contingencies
have been met. Upon adoption of recent guidance related to non-GAAP financial
measures, we have correspondingly excluded this contingent rent from our
calculation of Comparative FFO for the first quarter of 2003 and 2002.
We had previously included contingent rent as a component of Comparative
FFO and we have restated first quarter 2002 Comparative FFO to reflect
the adoption of this guidance.
(b) This adjustment
reflects the realization of the income tax benefit recognized as a result
of the purchase of the 120 leasehold interests at year-end 2000 and during
June 2001, which under the NAREIT definition of FFO would be excluded from
the calculation of FFO. Excluding this adjustment, FFO would have
been $41 million, or $.15 per share, for the first quarter of 2003 and
$69 million, or $.23 per share, for the first quarter of 2002.
(c) This adjustment
reflects the Comparative FFO attributable to the interests in Host LP.
(d) The share
count has not been adjusted for the minority common and preferred OP Units
outstanding as they were antidilutive for all periods presented. For the
quarter ended March 28, 2003 there were 27.6 million weighted average units
outstanding with a minority interest in Comparative FFO of $5 million.
For the quarter ended March 22, 2002 there were 21.5 million weighted average
units outstanding with a minority interest in comparative FFO of $6 million.
There would be no change in the reported Diluted Comparative FFO per share
had these minority units been converted.
(e) Diluted
comparative funds from operations is computed by dividing comparative funds
from operations as adjusted for potentially dilutive securities, by the
weighted average number of shares of common stock outstanding plus other
potentially dilutive securities. Dilutive securities may include shares
granted under comprehensive stock plans, those preferred OP Units held
by minority partners, other minority interests that have the option to
convert their limited partnership interest to common OP Units and the Convertible
Preferred Securities. No effect is shown for securities if they are
anti-dilutive.
HOST MARRIOTT CORPORATION
EBITDA and Comparative Funds From Operations Reconciliation
for First Quarter 2003 and First Quarter 2002
(unaudited, in millions)
Quarter ended
March 28, March 22,
2003
2002
Net income (loss)
$(34)
$1
Income
from discontinued operations
-
(13)
Interest
expense
111
105
Dividends
on Convertible Preferred
Securities
7
7
Depreciation
and amortization
88
83
Minority
interest (income) expense
(1)
5
Income
taxes
(4)
4
Equity
in losses of affiliates
6
4
Other
changes, net (a)
2
8
EBITDA of Host
LP
175
204
Distributions
to minority interest
partners of Host LP (b)
-
-
EBITDA of Host
Marriott
$175
$204
EBITDA of Host
LP
$175
$204
Interest
expense
(111)
(105)
Dividends
on Convertible Preferred
Securities
(7)
(7)
Dividends
on preferred stock
(9)
(9)
Income
taxes
4
(4)
Partnership
adjustments and other
(6)
(11)
Tax benefit
of lease repurchase (c)
3
3
Comparative Funds
From Operations of
Host LP
49
71 Comparative Funds From Operations of minority partners of Host LP (d)
(5)
(6)
Comparative
Funds From Operations of
Host Marriott
$44
$65
(a) We remove
non-cash items from EBITDA, which include compensation expense for stock
compensation plans, gains on acquisitions and dispositions, income (loss)
from equity investments, purchase tax benefits and fair market value adjustments
for foreign currency and derivatives.
(b) Host Marriott
held approximately 90% and 92% of the outstanding OP Units of Host LP at
March 28, 2003 and March 22, 2002, respectively. The distributions
to minority interest partners of Host LP reflect cash distributions made
during the quarter to minority holders of OP Units and holders of certain
preferred OP Units.
(c) This adjustment
reflects the realization of the income tax benefit as a result of the purchase
of the 120 leasehold interests at year-end 2000 and during June 2001.
(d) This adjustment
reflects the Comparative FFO attributable to the minority interest partners
of Host LP.
HOST MARRIOTT CORPORATION EBITDA
Reconciliation for Full Year 2003
Forecasts (a)
(unaudited, in millions)
Full Year 2003
Low-end High-end
of Range of Range
Net income (loss)
$ (138) $
(118)
Interest
expense
469
469
Dividends
on Convertible Preferred
Securities
32
32
Depreciation
and amortization
377
377
Minority
interest (income) expense
(8)
(6)
Income
taxes
(3)
2
Equity
in (earnings) losses of
affiliates
13
13
Other
changes, net
8
6
EBITDA of Host
LP
750
775
Distributions
to minority interest
partners of Host LP
-
-
EBITDA of Host
Marriott
$ 750
$ 775
See notes on
page 15.
HOST MARRIOTT CORPORATION Reconciliation of Diluted Earnings per Share
to Comparative Funds From Operations per Share for Second Quarter 2003
Forecasts (a)
(unaudited, in millions, except per share amounts)
Low-end of Range
Second Quarter 2003 Forecast
Income Shares Per
Share
Impact
Forecast Diluted
Loss available to common shareholders $
(32) $ 264.5 $ (0.12)
Adjustments
to net loss:
Depreciation
and amortization
86 -
0.32
Partnership
adjustments
4 -
0.02
Tax benefit
of lease repurchase (b)
3 -
0.01
Comparative
Funds From Operations of minority partners of Host LP (c)
(7) -
(0.02) Adjustment to dilutive share count: (d)
Assuming distributions
of common
shares granted under the
comprehensive stock plan, less
shares assumed purchased at average
market price
- 2.5
(0.01)
Forecast Diluted
Comparative Funds
From Operations
$ 54 $ 267.0
$ 0.20
High-end of Range
Second Quarter 2003 Forecast
Income Shares Per
Share
Impact
Forecast Diluted
Loss available to common shareholders $
(24) 264.5
$ (0.09)
Adjustments
to net loss:
Depreciation
and amortization
86 -
0.33
Partnership
adjustments
4 -
0.02
Tax benefit
of lease repurchase (b)
3 -
0.01
Comparative
Funds From Operations of minority partners of Host LP (c) (7)
- (0.03)
Adjustment to dilutive share count:
(d)
Assuming distributions
of common
shares
granted under the
comprehensive
stock plan, less
shares
assumed purchased at average
market
price
- 2.5
(0.01)
Forecast Diluted
Comparative Funds
From Operations
$ 62
267.0 $ 0.23
See notes on
page 15.
HOST MARRIOTT CORPORATION
Reconciliation of Diluted Earnings per Share to Comparative Funds
From Operations per Share for Full Year 2003 Forecasts (a)
(unaudited, in millions, except per share amounts)
Low-end of Range
Full Year 2003 Forecast
Income Shares Per
Share
Impact
Forecast Diluted
Loss available to common shareholders $ (174)
267.0 $ (0.65)
Adjustments
to net loss:
Depreciation
and amortization
371 -
1.40
Partnership
adjustments
7 -
0.03
Tax benefit
of lease repurchase (b)
12 -
0.04
Comparative
Funds From Operations of
minority partners of Host LP (c)
(20) -
(0.08)
Adjustment to
dilutive share count: (d) -
- -
Assuming distributions
of common
shares
granted under the
comprehensive
stock plan, less
shares
assumed purchased at average
market
price
- 2.5
(0.01)
Forecast Diluted
Comparative Funds
From Operations
$ 196 269.5
$ 0.73
High-end of Range
Full Year 2003 Forecast
Income Shares Per Share
Impact
Forecast Diluted
Loss available to common shareholders $ (153)
267.0 $ (0.57)
Adjustments
to net loss:
Depreciation
and amortization
371 -
1.40
Partnership
adjustments
9 -
0.03
Tax benefit
of lease repurchase (b)
12 -
0.04
Comparative
Funds From Operations of
minority partners of Host LP (c)
(22) -
(0.08)
Adjustment to
dilutive share count: (d) -
- -
Assuming
distributions of common
shares granted under the
comprehensive stock plan, less
shares assumed purchased at average
market price
- 2.5
(0.01)
Forecast Diluted
Comparative Funds
From Operations
$ 217 269.5
$ 0.81
See notes on
page 15.
HOST MARRIOTT CORPORATION
Notes to Second Quarter and Full-Year 2003 Forecasts
(a) The amounts
shown in these reconciliations are based on management's estimate of operations
for full year 2003 and the second quarter of 2003. These tables are forward-looking
and as such contain assumptions by management based on known and unknown
risks, uncertainties and other factors which may cause the actual transactions,
results, performance or achievements to be materially different from any
future transactions, results, performance or achievements expressed or
implied by this table. General economic conditions, competition and governmental
actions will affect future transactions, results performance and achievements.
Although we believe the expectations reflected in this reconciliation are
based upon reasonable assumptions, we can give no assurance that the expectations
will be attained or that any deviations will not be material.
For purposes of preparing the second quarter and full-year 2003 forecasts,
we have made the following assumptions:
* RevPAR will decrease between 6% and 8% for the second quarter and decrease
between 2% and 3% for the full year 2003 for the low and high ends of the
forecasted ranges, respectively.
* Comparable hotel-level EBITDA margins will decrease between 2.0 percentage
points and 2.5 percentage points for the full year 2003 for the low and
high end of the forecasted ranges, respectively.
* $175 million of hotels will be sold during 2003 and the proceeds are
utilized to retire debt.
* $210 million in renewal and replacement capital expenditures will be
incurred during 2003.
* Fully diluted shares will be 267.0 million and 269.5 million for the
second quarter and full year, respectively.
(b) This adjustment
reflects the realization of the income tax benefit recognized as a result
of the purchase of the 120 leasehold interests at year-end 2000 and during
June 2001.
(c) Represents
the Comparative FFO attributable to the interest in Host LP held by the
minority partners during 2003.
(d) These shares
are dilutive for purposes of the Comparative FFO per share calculation,
yet are anti-dilutive for the purposes of the earnings per share calculation.
This is due to the net loss that is forecasted for 2003 compared to net
earnings for FFO for the year.
HOST MARRIOTT CORPORATION
Other Financial Data
(unaudited, in millions, except per share and ratio data)
March 28, December 31,
2003
2002
Equity
Common shares
outstanding
264.5
263.7
Common shares
and minority-held
common
OP Units outstanding
292.1
291.5
Preferred OP
Units outstanding
0.02
0.02
Class A Preferred
stock outstanding
4.1
4.1
Class B Preferred
stock outstanding
4.0
4.0
Class C Preferred
stock outstanding
6.0
6.0
Security pricing:
Share price-common (a)
$ 6.92
$ 8.85
Share price-Class A Preferred (a)
$ 22.80 $
26.15
Share price-Class B Preferred (a)
$ 22.50 $
25.65
Share price-Class C Preferred (a)
$ 22.25 $
25.70
Share price-Convertible Preferred
Securities (a)
$ 33.13 $
36.94
Dividends per
share
Common
(b)
$ -
$ -
Class
A Preferred (c)
$ 0.625 $
2.50
Class
B Preferred (c)
$ 0.625 $
2.50
Class
C Preferred (c)
$ 0.625 $
2.50
Debt
Percentage
of fixed rate debt
90%
90%
Weighted
average interest rate
7.8%
7.9%
Weighted
average debt maturity
5.3 years 5.5 years
Credit
facility, outstanding balance $
- $
-
Other Financial
Data
Construction
in progress
$ 46
$ 39
(a) Share prices
are the closing price on the balance sheet date, as reported by the New
York Stock Exchange for the common and preferred stock. The shares of Convertible
Preferred Securities are not traded on an exchange. Our Convertible Preferred
Securities per share price is deemed to be the higher of the buy or sell
price as provided by the trading desk for Goldman Sachs in New York, New
York.
(b) We did not
declare a common stock dividend in the first quarter of 2003 or in full
year 2002.
(c) Dividends
reflect a quarterly cash dividend of $.625 per share for the Class A, Class
B and Class C Preferred Stock or $2.50 on an annual basis.
HOST MARRIOTT
CORPORATION
Hotel Operational Data
Comparable Property Statistics
(unaudited)
As of March 28, 2003 Quarter ended March 28, 2003
Average
Occupancy
No. of No. of Average
Percent-
Properties Rooms Daily Rate ages
RevPAR (a)
Atlanta
15 6,563 $ 139.05
68.6% $ 95.43
DC Metro
13 4,998 137.43
65.0 89.33
Florida
13 7,582 175.18
77.0 134.96
International
6 2,552 105.25
67.3 70.87
Mid-Atlantic
9 6,222 167.28
69.6 116.50
Mountain
8 3,313 115.19
65.1 75.00
New England
6 2,277 114.61
55.0 63.09
North Central
15 5,395 112.83
60.1 67.85
Pacific
22 11,526 157.00
66.5 104.42
South Central
12 6,514 133.43
77.8 103.76
All Regions
119 56,942 144.66
68.6 99.26
Other Portfolio Statistics
As of March 28, 2003 Quarter ended March 28, 2003
Average
Occupancy
No. of No. of Average
Percent-
Properties Rooms Daily Rate ages
RevPAR (a)
Ritz-Carlton
(b) 9
3,536 $ 254.66 64.3% $
157.98
HOST MARRIOTT CORPORATION
Hotel Operational Data
Comparable Property Statistics
(unaudited)
Quarter ended March 22, 2002
Average
Occupancy
Percent
Average Percent-
Change in
Daily Rate ages
RevPAR (a) RevPAR
Atlanta
$ 142.84 69.2%
$ 98.78 -3.4%
DC Metro
134.90 62.8
84.74 5.4
Florida
173.41 79.7
138.15 -2.3
International
109.25 65.4
71.45 -0.8
Mid-Atlantic
176.77 76.2
134.69 -13.5
Mountain
128.20 68.5
87.84 -14.6
New England
117.02 57.9
67.81 -7.0
North Central
112.40 62.0
69.64 -2.6
Pacific
158.51 70.3
111.47 -6.3
South Central
140.37 78.7
110.50 -6.1
All Regions
148.28 70.9
105.09 -5.5
Other Portfolio Statistics
Quarter ended March 22, 2002
Average
Percent
Average Occupancy
Change in
Daily Rate Percentages RevPAR (a)
RevPAR
Ritz-Carlton
(b) $ 241.68
66.2% $ 159.91
-1.2%
(a) RevPAR represents
room revenue per available room, which measures daily room revenues generated
on a per room basis, excluding food and beverage revenues or other ancillary
revenues generated by the properties.
(b) Includes
nine Ritz-Carlton properties owned by us for all periods presented, excluding
The Ritz-Carlton, Naples Golf Resort, which was placed in service in January
2002.
HOST MARRIOTT CORPORATION
Hotel Operational Data
Property Statistics by Region (All Properties)
(unaudited)
As of March 28, 2003 Quarter ended March 28, 2003
Average
Occupancy
No. of No. of Average
Percent-
Properties Rooms Daily Rate ages
RevPAR (a)
Atlanta
15 6,563 $ 139.05
68.6% $ 95.43
DC Metro
13 4,998 137.43
65.0 89.33
Florida
14 7,877 179.05
76.8 137.49
International
6 2,552 105.25
67.3 70.87
Mid-Atlantic
10 6,726 169.71
69.7 118.27
Mountain
8 3,313 115.19
65.1 75.00
New England
7 3,416 129.98
60.6 78.82
North Central
15 5,395 112.83
60.1 67.85
Pacific
22 11,526 156.44
66.6 104.18
South Central
12 6,514 133.43
77.8 103.76
All Regions
122 58,880 145.89
68.7 100.20
HOST MARRIOTT CORPORATION
Hotel Operational Data
Property Statistics by Region (All Properties)
(unaudited)
Quarter ended March 22, 2002
Average
Occupancy
Percent
Average Percent-
Change in
Daily Rate ages
RevPAR (a) RevPAR
Atlanta
$ 142.84 69.2%
$ 98.78 -3.4%
DC Metro
134.90 62.8
84.74 5.4
Florida
176.57 79.2
139.92 -1.7
International
109.25 65.4
71.45 -0.8
Mid-Atlantic
175.57 75.4
132.32 -10.6
Mountain
128.14 68.5
87.80 -14.6
New England
117.02 57.9
67.81 16.2
North Central
112.40 62.0
69.64 -2.6
Pacific
157.25 70.5
110.88 -6.0
South Central
139.51 77.5
108.05 -4.0
All Regions
148.55 70.7
105.04 -4.6
HOST MARRIOTT CORPORATION Schedule of Comparable Hotel-Level Results (a)
(unaudited, in millions, except hotel statistics)
Quarter ended
March 28, March 22,
2003
2002
Number of hotels
119
119
Number of rooms
56,942
56,942
Percent change
in Comparable RevPAR
-5.5%
-
Operating profit
margin under GAAP (b)
10.1%
13.9%
Comparable hotel-level
EBITDA margin (b) 23.3%
27.2%
Revenues
Room
$ 445
$ 471
Food and
beverage
238
248
Other
53
58
Hotel sales (c)
736
777
Expenses
Room
108
111
Food and
beverage
174
176
Other
30
31
Management
fees, ground rent and
other costs
253
248
Hotel expenses
565
566
Comparable Hotel-Level
EBITDA
171
211
Non-comparable
hotel results, net (d)
10
(2)
Office
building and limited service
properties, net
-
-
Other
income
2
-
Depreciation
and amortization
(88)
(83)
Corporate
and other expenses
(14)
(17)
Operating Profit
(b)
$ 81
$ 109
(a) We consider
119 of our hotels to be comparable properties for the periods presented.
The three non-comparable properties that we currently own for the periods
presented are the New York Financial Center Marriott (substantially damaged
in the September 11, 2001 terrorist attacks and re-opened in January 2002),
the Boston Marriott Copley Place (acquired in June 2002), and The Ritz-Carlton,
Naples Golf Resort (opened January 2002).
(b) Operating
profit margins under GAAP are calculated from our consolidated statement
of operations on page 7 and are based on operating profit of $81 million
and $109 million, respectively, divided by total revenues of $805 million
and $787 million, respectively, for the first quarters of 2003 and 2002.
Comparable hotel-level EBITDA margins are calculated based on comparable
hotel-level EBITDA of $171 million and $211 million, respectively, divided
by comparable hotel sales of $736 million and $777 million, respectively,
for the first quarters of 2003 and 2002.
(c) The reconciliation
of hotel sales per the consolidated statements of operations to the comparable
hotel sales is as follows:
Quarter Ended
March 28, March 22,
2003
2002
Hotel sales
per the consolidated
statement
of operations
$ 776
$ 761
Non-comparable
hotel sales
(45)
(24)
Hotel sales
included in rental income
in the
consolidated statement of
operations
22
21
Adjustment for
hotel sales for comparable
properties
to reflect twelve weeks of
operations
for Marriott-managed hotels
(17)
19
Hotel sales for comparable properties $
736 $
777
(d) Non-comparable
hotel results, net, includes operations for our non-comparable hotels described
in note (a), as well as $2 million and $(4) million, respectively, of operating
profit for the first quarter of 2003 and 2002 related to calendar year-end
adjustments for our Marriott-managed hotels discussed on page 5. Hotel
sales and expenses for our non-comparable properties were $45 million and
$36 million, respectively, for the first quarter of 2003 and $24 million
and $22 million, respectively, for the first quarter of 2002. |
